Do I really need a will?
Jul 23 2023
By: John Drapp
Posted in: Estate Planning
This is a question I get asked all the time. It’s usually followed by some minimization of assets such as “I don’t have much.”
The simple answer to this question is no. You don’t need a will. But should you have one anyway?
The answer to that question is yes! You should absolutely have a will, even if you “don’t have much.”
Many times, having a will in place results in no difference from what would happen to your assets if you didn’t have a will. Like insurance though, a will protects you from unforeseen outcomes that may arise from the application of Connecticut’s intestacy statute (the law that determines who gets your property after death if you don’t have a will).
Let’s look at some of the ways that the lack of a will causes problems for survivors.
One of the biggest assumptions people make about Connecticut law is that a surviving spouse gets everything. Although that’s the law in some states, it’s not the law in Connecticut. If you die while married and you have children, your surviving spouse will share your estate with your children. If you don’t have children but one or both of your parents are still alive, your surviving spouse will share your estate with your parents.
This scheme may not seem problematic, and in fact, many times, it isn’t. But let’s consider the case of Bill and Jane. Bill owned his home for a few years before getting married to Jane. It was always Bill’s intent to transfer the title to his home to himself and Jane as joint tenants (meaning that if one of them died, the other would own the entire home), but life always managed to get in the way of calling the lawyer to get this done. Meanwhile, Bill and Jane had two children. While the kids were still little, Bill died in a tragic motor vehicle accident. What happens to the house in this scenario?
Under Connecticut law, Jane gets the first $100,000, and one-half of the remainder. The kids split the other one-half equally. So, if Bill’s house is worth $400,000 and he had no other assets subject to distribution, Jane would end up getting 62.5% of the house or the net proceeds from the sale of the house if it were sold. The kids would each get 18.75%.
This example is oversimplified but it demonstrates the net effect. Jane now owns part of the house with the other parts being held for the benefit of her two minor children. This may not seem like a problem, but what if Jane wants to refinance the house? Or sell it a few years later? It can be done, but it’s going to be much more complicated than it would’ve been if Bill and Jane both held title to the home as joint tenants and both had wills leaving everything to the other, and then to the kids upon the survivor’s death.
Now let’s change that scenario a little bit. Bill and Jane have one minor child, but Bill also has an adult child from a prior marriage who is not a big fan of Jane. In that situation, Jane would inherit one-half of the house. Bill’s children would each inherit one-quarter of the house. Jane does not get the first $100,000 in this situation under Connecticut law. Is Bill’s adult child going to demand the one-quarter payout? What if Jane can’t make that payout? The house may very well have to be sold. Is that what Bill would’ve wanted? Or would Bill have wanted Jane to be able to keep the house to live in with their minor child? If Bill had made a will, all of this could have been avoided.
What if Bill and Jane spent years or even decades living together as if they were married – but legally weren’t. This can create an issue because with very limited exception, Connecticut doesn’t recognize common law marriage. So, even if Bill and Jane lived together as if they were married for thirty, forty or even fifty years, when one of them dies, the other is entitled to nothing on account of that relationship. Sure, beneficiary designations on things like retirement accounts or life insurance policies may obviate the need for any planning – but, what if there are solely owned assets, like Bill’s house? What if the beneficiary designations on retirement accounts or life insurance policies are not properly made or maintained? These potential headaches can be avoided with a will.
Another situation where not having a will can be problematic is the case where the assets are acquired after death. This can happen if the deceased person inherits from someone else, and that person’s estate plan does not have a survivorship provision. Many times, there will be language in a will that says, for example, that Tom will inherit something if Tom survives the person who has died. This means that if Tom dies before that person, he (or more appropriately, his estate) will get nothing. Without that type of survivorship language in a will though, it’s possible that one deceased person may be a beneficiary of the estate of another deceased person.
This problem can be compounded when multiple people have died. We recently dealt with this type of situation. In that case, Anne and Barbara (not their real names), who were sisters, co-owned a home. They did not own it in survivorship, so each of their interests in the home were inheritable. Anne had a will which made it easy to deal with her one-half interest in the home. Barbara, however, did not have a will and had died more than twenty years earlier. Nothing was ever done with her estate until Anne died. Barbara was a widower with three children at the time she died. Since Barbara was a widower, there was no surviving spouse to inherit, which meant that Connecticut law directed that her estate be shared by her three children. By the time Barbara’s estate was being administered twenty years later, one of her children, Christina, had died. Christina had a surviving spouse, David, and two of her own children, Ernie and Frank. David was not the father of Ernie and Frank though. Christina’s estate had already been handled as a small estate five years earlier as she had only about $5,000 in solely-owned assets.
For reasons that aren’t important here, Barbara always assumed that her interest in the home would not be inheritable. Further, with only $5,000 or so in solely-owned assets at the time of her death, it’s likely that Christina assumed she didn’t have enough to justify making a will. Would the outcome in this case have been what Barbara or Chistina would’ve wanted? We’ll never know because they didn’t make wills. It’s possible that they didn’t make wills because they didn’t think they had much to leave to anyone in a will. That turned out to be incorrect because of the assets they acquired after death.
Assets can also be acquired after death in the form of proceeds from legal claims. We recently saw this type of scenario with the resolution of a claim to the September 11th Victim Compensation Fund several years after the claimant’s death. These types of legal claims can also include motor vehicle accidents, mass tort settlements or wrongful death claims due to medical malpractice.
Then we have the hypothetical case of the luckiest unlucky man in the world who dies with the winning lottery ticket in his pocket. If he doesn’t have a will, the intestacy statute will control what happens to the lottery winnings. Is that what the man would’ve wanted?
These are just some of the ways that the intestacy statute can work to potentially produce undesirable results. Certainly, the distribution of an estate following the intestacy statute will sometimes produce the exact result that the decedent desired. If that’s the case for you, then maybe you don’t need a will. All too often though, the assumptions people make about how their property will be distributed upon death are incorrect. That’s why it’s at least worth a conversation with an estate planning attorney to find out how Connecticut’s intestacy statute would apply to you and your family.
If you’d like to have that conversation, give us a call.
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