A will is a legal document that allows a person, called the testator, to indicate how his or her estate should be disposed of after his or her death. Each state has laws that set forth the requirements for a valid will. It is estimated that 55% of all adult Americans do not have a will. Only one in three African American adults (32%) and one in four Hispanic American adults (26%) have wills.
An estate is simply all the wealth that you have accumulated during your lifetime – including real estate, stocks, bonds, business interests, retirement plans, personal effects, and anything else that you own. Taking the necessary steps to conserve your estate can help your heirs avoid conflicts, delays, and expenses. Probate refers to the court proceedings that conclude all the legal and financial matters of the deceased. The probate court acts as a neutral forum in which to settle any disputes that may arise over an estate. There are three things to remember about Probate Court: one, it can be expensive; two, it can take several months to a year or more; and three, Probate Court offers no privacy.
Now if you die without a will, you die “intestate.” There are three main problems with intestacy: the distribution of your estate is determined by the court, there will be fees and taxes, and the guardianship of your children will be determined by the court. A will is a list of instructions that tells a judge exactly how you would like your estate to be distributed. It enables you to name a guardian for your minor children, and in some cases, my help reduce the fees and taxes due upon your death. In Michigan, intestacy can be very costly to the surviving spouse and children. The property is usually not divided equally. Issues may arise regarding whether there is a spouse but with no children, a spouse with children, no spouse or children but with parents, and no spouse, no children, and no parents. In some cases the surviving widow may have to elect to take either her intestate share or her dower right.
There are really very few requirements for a Michigan Statutory will. An individual must be age 18 or older. Wills can vary slightly with the most common being the Michigan Statutory will. A holographic will in Michigan is one written by hand on a piece of paper. A simple will is one that may specify a type of distribution tailored to your individual needs. In the case of a married individual the will, will specify the spouse, the named children if any, any cash gifts, a statement regarding personal and household items as well as all other specific assets. In many cases, a personal representative is named as well as a guardian and conservator. Two adults are required to witness the will and these two individuals must not be named in the will to receive assets. For married couples, two wills are usually suggested with either party leaving their assets to the other and then to the named children if any.
A very valuable document that accompanies many wills today is a durable power of attorney. This enables a trusted individual to act on your behalf regarding investment and other financial decisions affecting your estate in the event that you become disabled or incapacitated. This durable power of attorney can extend to medical matters. This gives the named individual the authority to make medical decisions for you if you are unable to make them yourself. Many of us remember the Terri Schiavo case in Florida that lasted from 1998 to 2005. This highly publicized case represented a series of state and federal delays over a seven year period before life support was finally terminated for Terri even though her doctor had declared her in a permanent vegetative state. Ms. Schaivo did not have a durable power of attorney.
Most adults do not like to address a will and would rather procrastinate for years. It is not something that is easy to do but something that is very necessary in today’s environment. Many feel that most of their important property is held in either: joint tenancy, tenancy in common, tenancy by entirety, or they are in a community property state. Sometimes a change in property titling can trigger gift tax consequences or assets may be lost if joint tenants run into financial difficulty. For the few dollars that it costs to draft a will today, it is really a bad decision not to have one. It is not a document that should be addressed only by the aged. Young persons have an even greater need for a will especially if they have minor children.
DONALD WITTMER is a retired business executive who held key roles in the automotive and banking sectors. For a time, he also served as a Fiscal Agency Manager for the Detroit branch of the Federal Reserve Bank of Chicago. He received his undergraduate degree from Cincinnati’s Xavier University, an M.A. in business management from Central Michigan University, and earned certification in bank operations from the School of Banking at the University of Wisconsin-Madison. A husband, father, and grandfather, he teaches part-time at the Kent Place School for Girls in Summit, New Jersey.