There is a misconception that wills and estate plans are solely for wealthy individuals with big, contentious families. On the contrary, they are important for everyone.
Knowing some of the basics of estate planning, including the importance of a will, property transfers that take precedence over a will and what happens to your property after your death will help your loved ones avoid time-consuming and costly burdens.
Why is it important to plan for your estate?
Planning for your estate is important for several reasons. First, it helps ensure that your property goes to the people you choose. Second, proper estate planning can expedite the legal process of distributing your estate. Third, the process of estate planning informs you of important factors that affect your property, ways to distribute your property and how to plan for your family’s future.
What happens to my property after death?
After your death, your property will be assessed and distributed through a process called probate. An estate in Missouri must be probated regardless of whether the decedent created a will. In the probate division of a Missouri circuit court, the court will account for and value all of your assets and determine who is entitled to receive them. This process usually takes a minimum of six months. During this time, creditors may file claims against your property or other parties may object to the validity of your will. After the court has assessed your assets and located proper heirs, your property will be dispersed to the proper parties.
What does a will do?
A will is a document that directs what you want to happen to your property after your death. Making a will helps you in the probate process because it prioritizes your wishes and the best interests of your family. The court will look to your will for how to distribute your property.
A will is a useful document to accomplish the following:
— Distributing your assets to your desired beneficiaries. A will enables you to decide which individuals will receive which parts of your property.
— Creating a testamentary trust. This type of trust comes into effect upon your death and places your assets into a trust until a specified time, such as when your children reach a certain age. A testamentary trust can be changed up until your death.
— Designating a guardian for your children. As the parents of your children, you know best who would give your children the care they need in the event of your untimely death.
— Naming executors of your estate. Executors are people who carry out the terms of your will. They are sometimes called personal representatives. An executor will protect your property until taxes and debts are paid before transferring the remaining property to the recipient.
— Planning for paying outstanding debts and taxes. The state where you create a will can affect the ultimate value of your estate. There are both federal and state estate taxes that may apply to your estate, although the state of Missouri does not have an estate tax.
— Providing for what will happen to your pets upon your death. Pets can be as dear as family members and creating a will helps ensure they continue to receive proper care.
What doesn’t a will do?
Some types of property transfers trump the designations of a will. These kinds of transfers are known as nonprobate transfers. These transfers give you the rights to your property until you die, and then the asset passes automatically to the designated party or beneficiary. Nonprobate transfers will need to be written transfers and must comply with other relevant contract or financial regulation laws.
Nonprobate transfers can include the following:
— Joint tenancy with a right of survivorship. A joint tenancy occurs when two or more parties have shares in an estate. When one of the parties dies, their share passes to the remaining party. Bank accounts and real estate are examples of joint tenancies.
— Beneficiary designations under the nonprobate transfer laws of Missouri. These include payable-on-death accounts (such as bank accounts and certificates of deposit) and transfer-on-death accounts (property with a title, such as vehicles or boats), beneficiary deed of gifts (property without a title, such as jewelry or furniture), beneficiary deed for real estate and beneficiary assignment of contract rights.
What happens to my property upon my death if I do not have a will?
If you die without a will, Missouri laws will dictate who inherits your property. These laws are called intestate succession laws. For example, the surviving spouse typically receives the entire estate if there are no children and one-half of the estate if there are children. Any surviving children typically receive one half of the estate, divided equally among them. Other potential heirs are then listed in order of state-chosen succession. If no persons listed by the state exist to inherit your estate, your estate will become state property. The process of determining and locating proper legal heirs can lengthen the probate process.
Cohabitating partners should note that Missouri does not grant succession rights to a cohabitating partner, nor does it recognize common-law marriages. A common-law marriage occurs when a couple lives together for a period of time and acts as if they are married. If you do not have a will, your partner will not likely be given spousal status and therefore may not be entitled to property of your estate he or she otherwise would receive if you had married.
Heirs to your property generally have one year to begin the probate process. If a probate case is not filed within the year, your property may be treated as if you do not have a will, and your property will not go to the heirs you chose but will be dispersed according to the intestate succession rules.
The Fort Leonard Wood Legal Assistance Office can help you plan your estate. To set up a telephonic appointment, call 573.596.0629.
(Editor’s note: This article was submitted to the GUIDON by Olivia Maynes, a law student and intern at the Fort Leonard Wood Office of the Staff Judge Advocate.)
