Friday, May 11, 2007

The Why of Wills


WHY….do people who have no close family, and who think their distant relatives “don’t care about them”, frequently neglect to make a will, die with a lot of money, so these same distant relatives inherit their money?

WHY…..don’t people who have “nobody to leave my money to” make bequests to charity?

WHY… some people have a pathological abhorrence to paying attorneys fees, and accept heavy financial consequences when an ounce of prevention would have led to a better result?

WHY… people hold family grudges for years and never make the first move towards resolving the issues?

I know, I ask these sarcastic “why” questions. The kind of questions we could probably answer, but what would it accomplish?

What happens when a person dies without a Will? Contrary to popular misconception, their assets do NOT “go to the State”. When there is no will, and a person dies, the laws of intestacy apply. All States have such laws, essentially a logical order with the closest relatives inheriting. In New York, it goes like this:

- if a spouse and no children, all to the spouse
- if children and no spouse, all to the children
- if spouse and children, first $50,000 to the spouse, then 50/50 spouse/children
- if no spouse or children, all to the parent(s)
- if no parents, all to siblings (or children of predeceased siblings)
- if no siblings or nieces/nephews, you start getting to aunts/uncles and cousins.

The above is a rough sketch, and there are rules to cover EVERY situation you could think of, and they ALL come up. It is almost impossible for there not to be at least SOME cousins. It is actually fairly common to have an older person who never married or had children, whose parents are long gone, and who either had no siblings, or outlived them all. If a person like this does not make a will, their cousins inherit!!! In law school the professors refer to this as “laughing heirs”. Everyone laughs about this in law school, and probably thinks it some obscure situation that never happens in real life.

Experience teaches otherwise…..

More tomorrow….

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