All of my assets are held in joint accounts with my spouse. Do I still need a will? Also, my spouse refuses to go to an estate-planning attorney or to even discuss doing his will. I am really concerned about naming a guardian for my kids and don’t want to leave them unprotected. Do I have to wait for him or can I do my documents on my own?
There are two types of assets when it comes to administering an estate, in other words, transferring title to assets. There are “probate” and “non-probate” assets.
Probate assets are transferred by a person appointed by the court as the representative of the estate, who then marshals the assets and distributes them either pursuant to a Last Will and Testament, or, if there is no will, by the law of descent.
Non-probate assets are those that are transferred by operation of law, by presentation of a death certificate. Joint bank accounts, most retirement accounts, and life insurance are non-probate assets if a beneficiary is properly named.
A will is still recommended even if you think that all of your assets are non-probate. First, for parents of children under the age of 18, a will is necessary to nominate a guardian for your children and a trustee to oversee funds left to a child. Absent a will, any assets left to a minor child must be held jointly by any guardian (appointed by the court) and the Clerk of the Court, requiring permission to take any money out. The child also has legal title to the property when he becomes 18, which is not always advisable or desired.
Second, there is almost always an asset that materializes that requires some form of proceeding, either a Social Security check or paycheck issued just prior to death, a car, or just personal property. Third, your joint or non-probate assets might not be distributed as you intended. Say you have three joint or “In Trust For” accounts, one for each of your children. You fund them with equal amounts, but as time goes on, you draw on those accounts for your living expenses, not always proportionately. At your death, one child might have a balance that is higher than the other. The inequality can spur disputes that can cost more than the proceeds in the accounts.
Clients often avoid executing a will, because it forces them to make difficult decisions they would rather not, while considering their own mortality. However, the failure to make a decision is in itself a decision to defer to the state laws dictating who gets your assets when you die. You might not want your spouse to inherit 50 percent of your assets outright, with your minor children getting the other half.
A will allows you to put certain protections in place, like a testamentary trust, that would protect your assets if your spouse remarries and ensure that the assets pass to your children. This is especially critical in a second marriage. A will allows you to specify who will inherit and in what proportion.
As for the second question, you are not obligated to wait for your spouse to make a will. There are certain laws about a minimum amount you must leave to a spouse — called a “right of election” — but you can make a will without your spouse’s consent or knowledge. If you have a pre-nuptial agreement that gives certain parameters about what you are promising to leave in a will, you should be mindful of that, but it still does not impact your ability to execute a will on your own.
Alison Arden Besunder is the founding attorney of the law firm of Arden Besunder P.C., where she assists new and not-so-new parents with their estate-planning needs. Her firm assists clients in Manhattan, Brooklyn, Queens, Nassau, and Suffolk Counties. You can find Besunder on Twitter @estatetrustplan and on her website at www.besunderlaw.com.