Originally published by Knoxville News Sentinel
Actually, you do have a will. Assuming you are a Tennessee resident, the state of Tennessee has written it for you. And it might not say what you want it to say.
Apparently, iconic music artist Prince died without a will. As a result, the passing of his considerable assets will go through a series of hands and no telling how much legal expense to determine who will receive what.
And all of this will be a public process through the court system. It certainly makes for tantalizing headlines, but I don’t think that is what any of us really wants for our family and heirs. In Prince’s estate, I am sure there will be lots of legal bills and angst among family members. His will could have directed who would control his business interests and that person or entity certainly doesn’t have to be the same as the individuals and/or charities who would inherit his wealth.
You have the opportunity in your will to leave a clear road map of your intentions. Every state has its own laws regarding intestacy, or dying without a will. So, if you don’t have a will prepared, the state will have a plan for you — it will take control of your assets and distribute them for you. This is where having a will helps assure that your wishes are followed after your death.
Many people believe that, if they are married and do not have a will, their assets automatically go to their surviving spouse. Sadly, this is a misconception. Regardless of the length of the marriage, the spouse will have to divide the assets with any surviving children. Should the children be minors, a guardian will be appointed for them by the court.
Typically, the guardian will be the natural surviving parent, but there is still the cost and time involved in going to court. And my, oh my, how difficult it is when there are blended families and ex-spouses who want to take control of a minor child’s assets.
Not all assets are controlled by your will. Certain assets pass by operation of law. For example, if a checking account or brokerage account is in joint name with right of survivorship, then the will does not control, but rather the way the account was set up controls.
Same thing for real estate, the way the property is titled controls, not a will. And then there are life insurance policies, retirement plan accounts, IRA accounts, 401(k) plans, annuity contracts and the like. These types of investments normally have beneficiary designation forms, and the beneficiary form controls who receives those assets.
Often, closely held business interests have restrictions and/or buy-sell agreements with the other shareholders that control instead of the will. In a buy-sell agreement, the disposition of the wealth created from the sale of the stock would be controlled by the will, but the buy-sell might not allow the business interest itself to be inherited by someone else.
And let me stress here again, even if a will says that a particular piece of property goes to a certain person, if the property isn’t titled in just your name, then the title controls, not your will.
Likewise, that old retirement plan beneficiary designation that you filled out 20 years ago will control your retirement distribution even if your will makes mention of the retirement account. Please periodically check your beneficiary designation forms to make sure they say what you want them to say.
Preparing a will is a crucial step in assuring that your wishes are carried out after your death. You really can get the last word in.