A 2024 survey report by Caring.com found that only 32% of Americans die with a Will, a 6% decline from 2023. Many legal journalists and analysts predicted that the COVID-19 pandemic would motivate the population to estate plan, however, the Caring.com survey suggests that procrastination and lack of education on the topic are the main reasons why so many Americans fail to have their affairs in order.
There is a common misconception that your loved ones automatically get your assets upon your death and that having a Will is only for the rich and famous. Ironically, many celebrities have notably passed without a Will, including Michael Jackson, Kurt Cobain, and Heath Ledger. The scale of these individuals’ estates has resulted in complex estate litigation, however, failing to have a plan in place for any person may result in unwanted burdens for their surviving family members.
Dying without a Will, or dying “intestate” means that your assets will pass according to the law of the state you are a resident in. Generally – to a surviving spouse, surviving children, or the surviving parents. However, many state’s laws, including New York, fail to account for blended family dynamics and fail to have protections in place for minor children. Two instances where New York intestacy statutes fall short include providing for step-children, cohabitators or partners that are not legally married, and protections for minor children. For example, if you were to die without a Will, your boyfriend or girlfriend for many years, or your step-children from a prior marriage would receive nothing from your estate upon your passing. This oversight could leave your loved ones that you have supported for years in a difficult situation. Without a Will in place that names a guardian for your minor child, a guardian will be appointed by the court and in many cases may not be the individual you intended to manage and be responsible for your children’s finances.
In New York, the age of majority is 18. Nevertheless, all minor children including children 18 years and older would benefit greatly from a trust in place. Instead of a lump sum of your inheritance, your child’s future is better prepared for by monthly or yearly support for their maintenance and education without granting them access to funds prematurely. With an estate plan in place, you can appoint a trustee and guardian who will be responsible for your child’s future support. Your trust document can direct the method of distribution and even provide for limitations or discretionary trustee decisions. Without an estate plan, many of these delicate decisions that affect your dependents are left to be made by the courts.
Estate plans are not only effective and necessary upon your passing. Advanced directives such as Power of Attorneys (POAs) and Health Care Proxies (HCP) are valuable tool that can help your family members handle your affairs during your life. The Caring.com survey reported that 43% of Americans believe they would be motivated to get a Will if they became sick or have a health concern. But many estate attorneys know that when health issues arise, it could already be too late.
A durable Power of Attorney (durable POA) allows someone you trust, either a family member or a friend, to make financial decisions for you. If you were to ever become incapacitated or disabled, having a durable POA in place means that your loved ones can handle your affairs without court intervention. Without a durable POA, a guardianship proceeding must take place. Unfortunately, this is a tedious, uncomfortable, and expensive process.
A Health Care Proxy (HCP) and Living Will (LW) allows your loved ones to make medical decisions for you if you are unable to speak to the doctor yourself. Similar to the issue regarding POA, if an HCP is not in place, the courts are once again involved. If you become incompetent without these advanced directives in place, a guardianship proceeding must prove your incapacity and provide notice to all “interested parties” that you are allegedly unable to handle your finances. Your mental health is not black and white. Proving incompetency is often a litigated matter, especially if two or more family members believe they should be your guardian. Executing a durable POA and HCP/LW while you are healthy can bypass all of these issues for your agent and streamline the process to handle your affairs, pay your debts, and mitigate your expenses. Your agent can automatically act for you upon your mental decline without a judge’s permission.
In conclusion, many Americans do not like to think about death. This is normal. Nevertheless, understanding an estate administration proceeding and having a plan in place to ensure your loved ones are not stuck in court battles or fighting for your assets upon your death is worth a few moments to ponder it. Unfortunately, we cannot assume that everything will end up exactly like we intended it when we are no longer here. Individuals should feel comfortable discussing their concerns about family structure and particular wishes with an estate planning attorney. An estate planning attorney can help you prepare for every situation, so you are better informed and in control of your loved ones continued support after your passing.
References:
https://www.caring.com/caregivers/estate-planning/wills-survey/