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Necessity of a Will

by Mark Avery

The vast majority of people have the creation (and the update) of a will on their life’s "to do" list. However, most continue to postpone work on this important document until a "better time". Unfortunately, two complications make procrastinating the execution of a will a very bad idea. First, unfortunately life (and its duration) is uncertain. Second, Texas’ intestacy laws are often enigmatic and counterintuitive to most of its residents. Many Texans would no longer procrastinate estate planning if they were more acquainted with the repercussions of dying without their matters placed in order. In other words, everyone would quickly have wills drawn up and memorialized if they only knew what a mess they might be leaving behind if they passed away without them. For example, most people are surprised to find out how guardians are appointed and property is distributed if they fail to put their estate planning matters in order prior to death.

This article is intended to inform the reader of the typical consequences of dying with, and without, a will in Texas. In essence, the main theme of this article is simply that if an individual does not decide (and execute a document outlining) who is to distribute and receive his or her property, take care of his or her children, and resolve his or her financial concerns then (upon your death) the state of Texas will decide for him or her, and usually after much greater time and expense.

Do You Need A Will, And What Happens If You Pass Away Without a Will?

Question: Regardless of their health condition, what do people with the following characteristics have in common?

Business owners;
Persons who are the last surviving parent of a minor child;
Parents with children from different marriages;
Persons desiring to disinherit blood relatives;
Persons owning property prior to marriage;
Persons who have received gifts during marriage;
Persons who want to distribute some (or all) of their property to a friend, distant relative, or charity;
Persons with substantial property; and
Persons who want to lower the time and expense that it will cost loved ones to distribute property and settle business affairs and debts upon death.

Answer: For one reason or another, all of them will most certainly leave their survivors in a far better situation (and would be assured that their post mortem desires are implemented) if an up-to-date will were executed according to Texas law.

However, for those who pass away without a will (referred to as "dying intestate") and those who leave assets out of their will, the state of Texas has created laws which dictate the distribution of property and the appointment of guardians for minor children and incapacitated persons. Of greatest import, unless a written declaration is made by the last surviving parent, the appropriate probate court will probably give custody of minor children to the closest relative by ascension (e.g., a grandparent) who is deemed qualified. If such a relative does not exist, then the court will generally give custody to the nearest of kin who is deemed qualified.

The administration and distribution of the deceased’s estate depends upon his or her familial circumstances at death. However, a few events generally happen. First, through a formal proceeding, the court will determine which assets of the deceased are "separate property" and which assets are "community property". Next, if the deceased had a minor child (or incapacitated person) the court will automatically appoint an attorney to represent his or her interests (it being assumed that the child would take a standing which is adverse to his or her surviving parent). In addition, the court will determine whether the deceased has any known "heirs" (generally the descendants and possibly including the ancestors). Depending on the court’s findings on these issues, the court will then order both the payment of outstanding debts, and the distribution of the estate’s remaining assets to the heirs under the laws of Texas (all of which is called an "administration"). Finally, a court will generally order that a bond be posted by the person that it appoints to administer the estate. If bond is required, a yearly fee is charged so long as the administration continues to be necessary. As one can readily determine, all of the above events take a great deal of time, and can quickly run up a large amount of costs and fees to the deceased’s estate.

It is also important to note that Texas’ intestacy laws limit the court’s discretion in determining what assets of the estate each heir will receive and how such property will be distributed. In addition, many of Texas’ intestacy laws are surprising to the average person. For example, the distribution of community property to children of the deceased depends on whether or not they share the same parents. Meanwhile, separate property of the deceased is distributed under an entirely different group of complicated laws.

What Is The Purpose Of A Will?

Generally, a will allows you to choose who will raise your minor children if both of their parents pass away, who will care for surviving incapacitated persons, and who will receive your property upon your death while dramatically reducing the amount of time and cost of distributing the estate, and appointing necessary guardians. In addition, it can be tailored to lower the taxation of your estate, and lessen the likelihood of familial disputes regarding who should have your children and property. More specifically, a will can lower probate costs by:

streamlining the distribution process by letting people decide who shall receive their property;
lowering the amount of court approvals and determinations to one court appearance and a final written report;
waiving the costly bond usually required of an executor; and
deleting the need for an ad litem attorney for incapacitated persons and minor children (with the accompanying legal fees).

How Much Does It Cost To Create A Valid Will?

The cost depends on the circumstances and complexity of the property assets involved. For example, the cost of creating and executing separate wills for a middle-class married couple who desire to give everything that they own to the other (and having the wills admitted to probate) is often only a small fraction of the costs and fees generally accrued if the same persons were to die without a will. Moreover, the cost in time and emotions to the survivors is substantially smaller if the deceased has left a valid will because the administration of the estate is quick, clear, and simple. Of course, in order to have a complete estate plan, circumstances may dictate a need to create and execute documents granting powers of attorney and trusts. These documents are a modestly priced additional expense. In essence, a power of attorney gives the designated person the authority to direct another person’s affairs, or make health care decisions under certain circumstances (e.g., physical or mental incapacity). Meanwhile, among other things, a trust can be used to:

avoid probate;
reduce taxes;
provide for the management of property by an individual or institution capable of doing so;
postpone distributions to persons not believed to possess the necessary maturity to manage property and funds;
encourage loved ones to pursue certain objectives such as a college education and;
manage gifts to charitable organizations and universities.

Conclusion

In the final analysis, one question summarizes the issue before all Texans: Do you want to spend a relatively modest amount of time and money prior to your death to have your estate and children taken care of, or have your loved ones pay a much greater price in time, money, and emotions by having to sort out your estate (with little ability to effectuate your unmemorialized wishes) and possibly fight over custody of your children after your death? With no way of knowing whether any of us will live another 100 years or only another 100 days, we cannot afford to procrastinate putting these matters in order.

The foregoing article provides general information about estate planning and the probate process, and is provided with the understanding the publisher and author are not rendering legal advice or other professional services by its publication. Information contained herein should not be acted upon without professional advice.