Don’t Be Like Prince – Don’t Die Without a Will
The following people have something in common: Abraham Lincoln, Martin Luther King, Jr., Jimi Hendrix, Pablo Picasso, Sonny Bono, Prince, Michael Jackson
Each of these famous persons died without a Will. When a person dies without a Will, it doesn’t mean that they did not have an estate plan. It means that the person’s estate plan will have been written for them by the laws of the state of their domicile. This will often lead to results that the decedent would not have desired.
When a Florida resident dies without a Will, assets that he or she owns individually (with no beneficiary designation) pass by intestacy. The ramifications of intestacy include the following:
- The distribution of the assets will be what the Florida legislature has decided by statute. For a Florida resident, all of the assets will pass to the surviving spouse, unless the decedent had children who are not also children of the surviving spouse. If there are children surviving who are not also children of the surviving spouse, the spouse would get one half (1/2) of the assets, and all of the decedent’s children would divide the other one half (1/2) of the assets.
- The person who will administer the estate will also be determined by statute. Under Florida Statutes Section 733.301, the Probate Judge will have discretion as to who would be appointed Personal Representative. The Judge must give preference to first, the surviving spouse, second, the person selected by a majority in interest of the beneficiaries, and third, an heir closest in relationship to the decedent. Because there is discretion in the Judge, there can be litigation over who the Judge should appoint as Personal Representative, thus further slowing down the estate administration process. This can also lead to the appointment of a temporary administrator to handle the administration of the estate until a Personal Representative is appointed.
- Because of the items enumerated above, when a person passes away without a Will, the administration of his or her estate typically takes longer. While the estate of a person who dies with a Will in Florida can often be opened and administration commenced within a few weeks of a decedent’s death, if a person dies without a Will, the above problems could result in the estate taking months to open.
- Guardian for Minors. If a person dies with one or more minor children, his or her Will would normally contain a provision nominating one or more guardians. Without a Will, the court will appoint the guardian(s). Florida Statutes Section 744.312 gives the court broad discretion to appoint a guardian, especially where one has not been nominated. There is no automatic position of priority, as there is for a Personal Representative.
Another negative ramification of dying without a Will pertains to the age at which beneficiaries will receive their inheritance. With a Will (and perhaps an accompanying Revocable Trust), a person can determine at what age or ages their beneficiaries will receive their bequest. In most cases, a parent would not want their child to receive an inheritance before a certain level of maturity is achieved, typically, age twenty-five (25) or older. In some cases, assets are held in Trust until beneficiaries are much older, or even for their entire lifetime. When a person dies intestate, however, anyone over age eighteen (18) receives their inheritance immediately. Assets passing to a person under age eighteen (18) are administered by a guardian of the property, which again involves court supervision and a significant expense for the guardian, who must file annual reports and accountings with the court. These expenses are paid out of the minor’s assets. Even worse, once the minor turns eighteen (18), he or she receives the inheritance outright. Imagine the consequences of an eighteen (18) year old suddenly having complete access to several hundred thousand dollars, or more, of assets.
Another ramification of dying intestate is lack of privacy. If a person were to dispose of his or her assets through a Revocable Trust, or other type of Trust, the provisions of that Trust, as well as the amount of assets passing under it, are private, and not available for public viewing. When a Will is probated, the Will itself is public record and people can see that, as well as information about the assets of the estate. With intestacy, however, there is often a battle among beneficiaries as to who is entitled to the estate, and who should administer it. The litigation that can arise from that can be played out in the local newspapers. For a celebrity, such a battle becomes national news.
There are numerous other reasons to create an estate plan, of which a Will is only one part of. Among the documents typically considered when planning an estate are: Revocable Trust (also known as a living trust), Living Will, Designation of Health Care Surrogate and Durable Power of Attorney.
In addition to assuring privacy, a properly thought out estate plan can save significantly on estate taxes.