There’s really no guarantee of the payback for many of the personal finance decisions you can make. Perhaps….
- Your careful 529-plan savings are for naught when your son or daughter decides college isn’t their thing.
- Your years of careful tax planning are undone by the whims of the government.
- You do an outstanding job organizing your car, disability, homeowner, and umbrella insurance and never make a claim on any of them.
- You religiously avoid debt and save a huge pile, only to be bankrupted late in life by medical bills.
…and the list goes on. We try to make smart financial decisions, but sometimes they just don’t work out to plan. There are virtually no guarantees in the world of personal finance.
100% Success Rate – I Guarantee It
But I can offer you one: you are going to die (I didn’t say it was a good guarantee).
And if you’re going to die, a will, where you lay out instructions on what to do with your stuff when you die, is guaranteed to get use. You may not get much enjoyment from it yourself, but I imagine your loved ones (at least the ones you decide to leave some stuff) will be very glad you did.
So a will can be valuable to just about everyone, since we’re all going to die. And, given that, is it any surprise that so many people have decided they don’t need one? Rocket Lawyer, an awesomely-named legal service website, found 64% of all Americans, and 55% of Americans with children, don’t have a will.
You Already Have a Will
Even if you have prioritized getting the right cell phone plan over organizing your own will, I have great news: you already have one! The bad news is that it’s probably not exactly to your liking, and you probably have no idea what’s in it.
But hang on, you say, I haven’t done anything! “Get a Will” has been gathering dust on my to-do list for years. What are you talking about?
Let’s look at the definition again. You DO have a legal document that states where your stuff should go when you die. It’s not your own personal will, but no matter what state or country you live in, I’m positive the government has legal statutes that say exactly what will happen to your stuff when you die. They’ve got you covered – congratulations!
No way! Your definition of “will” says I need to state what I want done with my stuff. I haven’t told anyone anything!
Yes, you make a good point, but I’ll counter with the wisdom of the great legal minds from the band Rush: “If you choose not to decide, you still have made a choice”.
That’s right. You’ve (hopefully) worked hard all your life, saved money diligently, invested wisely, and created a legacy to provide for your loved ones and for generations to come. And now, as the last act ends, and the curtain prepares to fall, you cap your Sir-Laurence-Olivier-worthy performance by taking a dump right in the middle of the stage. A lifetime of building, of discipline, and of excellent financial decisions ends with you letting some state legislators decide the best way to parcel out your stuff. Bravo!
Your inaction is indeed a choice, so let’s get down to what sort of choice it is. Are you curious to see what your will (loosely termed) actually says?
“Dying Intestate” sounds painful, but it actually just means you’ve died without making out your own will. So intestate succession will help decide where your stuff will go*.
(Brits can use a cool interactive survey.)
If your hope is to just leave all of your stuff to your spouse and be done with it, good luck with that. Achieving that goal may depend on which state you live in, and perhaps whether you have living parents/siblings/children. Seems kinda arbitrary, doesn’t it?
I took a look at my own state and a few others, and my head started spinning. There is no way I’d want my estate governed by intestate succession, as there are numerous scenarios where it’d result in something totally against my wishes.
One Size Fits None
Yet I can’t blame the legislators of my state for anything; they’re trying to develop “one size fits all” rules for one of the most complex financial decisions possible. I’m sure there is an excellent counter-argument for every single position one might take in dividing up an estate.
I can imagine them with a yellow legal pad, wrestling with all of the questions that need clarity (“What exactly is the legal definition of ‘children’?” “If a relative is conceived before the person dies but is born after, what then?” “How many hours must you survive someone to really have ‘survived’ them?”). The fact that each state has developed a set of rules, no matter how good or bad, to cover every scenario is quite an accomplishment in itself. (The fact that they seem to have arrived at different solutions should concern us a little, too.)
No matter how thoughtful or “fair” a government has been in defining intestate succession, I’m sure in many cases they don’t nail it. The chances of them dividing up your stuff exactly like you’d want in every possible scenario is pretty close to 0.0%. After all, if they can’t find a single heir for your stuff, most governments will take it themselves. Seems like a charity would’ve been a better backstop than that…
But this doesn’t mean that you should get upset with the government, or spend a lot of time playing “what if” with the intestate succession rules for where you live, or pack your bags to move to another state.
This means you should go get your own will.
After all, you may need it sooner than you think.
* A will – or intestate succession in its absence – does not address all of the assets you may own. But it is an incredibly important part of estate planning, and understanding what it does and does not cover will help you build a comprehensive strategy for your estate.