According to a Missouri financial planner, it is irresponsible not to have an estate plan. It is a difficult sentiment to disagree with. Dying without a will or a full estate plan can result in a terrible mess for the loved ones left behind. An estate plan is the best way to ensure your wishes are carried out after you die.
Of course, if you do not have a will, the state has one for you. For example, say you and your spouse have a major falling out, and you tell him that he will never get another dime out of you. If you die without a will — “intestate” — he will get a portion of the estate according to Missouri law. If you have no children, he will get it all.
For parents, the most important part of a will may be the designation of a guardian for minor children. If the parent gives the court no directions about this, the court will have to make the decision. In the scenario above, the child could end up with a father he hardly knows, or a father he actively dislikes.
A will is not the only option, and it may not be the best option, for making sure that specific expenses are covered or specific people are taken care of after the testator’s death. For example, in “It’s a Wonderful Life,” George Bailey has a life insurance policy. If he wants to make sure Mary gets the money, rather than Uncle Billy, he must designate Mary as the beneficiary. That designation — also called registration — will hold, even if George’s will leaves Mary out entirely. The registration will trump everything else.
The life insurance policy is sometimes called a “will substitute,” and it’s not the only will substitute available. We’ll touch on the rest in future posts.
Source: Sun Herald, “Are you ready for death? Resolve to get your affairs in order,” Tim Engle, Feb. 1, 2014