Many people have a mistaken belief that a Will serves any number of purposes. Their beliefs have sprung up from various sources and have been perpetuated over many years.
Some of these misconceptions are as follows:
- If I have a Will I avoid the probate court system.
- My Will controls the disposition of all my assets.
- My husband needs a Will since he owns a business but I don’t need a Will since all our other assets are jointly owned.
- I have added all my children’s names to my bank accounts and house deed, therefore I have no need for a Will.
- Since I can write my own Will, I have no need for lawyer.
- I have a Durable Power of Attorney and my agent can dispose of all my assets at my death.
Before we look at the misconceptions, let us examine what a Will does. The principal reason for having a Will is to: Change the formula set by the state as to who gets what; naming a guardian for minor children, choosing a Personal Representative (Executor); setting aside specific assets for certain individuals or charities; and creating a trust to delay the distribution of assets to persons who may not yet be ready to manage large sums of assets.
Now, let us look at the misconceptions. Having a Will does not eliminate the need to file the Will with the probate court. The Will must be filed with the court to enable the Personal Representative to receive written authority to gather up the assets.
Without such written authority, the Personal Representative has no power to act.
Does My Will Control All My Assets?
No, not in the sense that the average person may believe that it does. It controls those assets which are in your own name and not co-owned with another. Joint bank accounts, shares of stock with co-owners, real estate owned jointly with others, jointly owned brokerage accounts, life insurance and Individual Retirement Accounts with named beneficiaries are some of the assets not controlled by your Will. A set of laws different than the law of Wills control each one of the assets described above. One must look to those laws to see who owns the asset at the time of death.
Does a Wife Need a Will?
Who is to say which spouse will die first. Since the wife might survive the husband, she ends up with all of the jointly owned assets and needs her own Will to make her personal desires known.
Do Joint Assets Give Certainty to Your Plan of Disposition?
Well, maybe and maybe not. Joint assets which pass to surviving owners depends on one important fact. Will all of the co-owners survive the original creator of the asset? If son, Johnny, fails to survive his mother, his share of the bank account (either as the only joint owner or one of several) will not pass to his children (assuming he has children) and therefore, a disinheritance takes place. The other co-owners (if others are named), by law, take the entire account without an legal obligation to share it with the children of the one who predeceased everyone.
The entire process depends upon the order of death, and that is the one great uncertainty which no one can control.
Do I Need a Lawyer to Write a Will?
Michigan law permits you to write your own Will, with or without witnesses. The details explaining how to execute the document properly are expressed in the written law on Wills.
The principal reason to use a lawyer in making a Will is to have a person who is knowledgeable of the law examine the facts surrounding a person’s ownership of assets and the facts surrounding who the person favors most in the disposition of his or her assets. It is only through a questioning process that a proper Will can be prepared.
Every person has different ideas concerning who gets what when they die, and their lives are frequently involved with children from a previous marriage. Also many persons never give thought to the problem of a child predeceasing them. Who will get the assets if such a situation occurs?
It is only a lawyer who can examine the whole picture and explain what happens in each situation. At that point, a Will is prepared taking into account all of the facts surrounding that person’s family history, assets and desires as to who should get what.
The Durable Power of Attorney is fast becoming a valuable tool in eliminating the need for court control over a person’s assets when he or she becomes mentally incapacitated. It is a substitute for a court appointed conservator.
However, the authority to act as an agent for an incapacitated person using a Durable Power of Attorney ceases at the person’s death. At that point, it is only the Will which authorizes a person to act upon assets owned by the deceased. Or, if there is no Will, the court appoints a person to act and divide up the estate according to Michigan law.
Many people have turned away from the use of a Will and prefer the use of jointly owned assets to avoid the probate court process. They have heard tales of great delay and heavy court expenses. In Michigan, the laws regarding the probating of a Will have been modernized. Rigid controls exercised by the court in previous years have been modified.
Today, with the use of independent administration (no court supervision), court hearings are not needed. The Will need only be deposited with the court with a request that the names Personal Representative be authorized to act. The time to complete administration of a normal estate under $600,000 is approximately eight months.
An important aspect when comparing a Will with a Revocable Living Trust is the nature of work to be performed after death. The tasks for both are: identify creditors / amount owed; sell assets, if necessary; pay creditor or contest claims; prepare final income tax returns; and distribute the remaining assets. The Revocable Living Trust usually allows for these tasks to be completed without going through the Probate Court process. A Will, which must be filed in the Probate Court, requires some level of oversight in completing the aforesaid tasks.
For additional information, you may contact The Law Offices of Graham & Hubbert today.
Published in Conjunction with the State Bar of Michigan