Before It's Too Late ~ Eric Gullotta

Eric Gullotta Eric S. Gullotta, JD, CPA, MS (Tax) specialies in estate planning and taxation law. His office is located at 232 West Napa Street, Suite A, in Sonoma. Contact him at 938.7234 or visit Gullottalaw.com.

Archives


Sign Up for Email Notifications

The government’s will

Posted on April 28, 2018 by Eric Gullotta

Many potential clients I meet with tell me that they are not ready to create a will yet. For one reason or another, they are not able to commit to a decision. It is this mentality that keeps them from creating any sort of estate plan. This is when I tell them that they already have a will – The Government’s Will.

For those of you out there who have not created your own estate plan – you have the Government’s Will. It results from the laws of intestate succession. When a person dies without a will, the probate court looks to state law in order to determine how your assets are distributed. In Sonoma County, we look to the intestate laws of California.

Sometimes the Government’s Will and your intentions align, and your loved ones will receive your assets as if you had prepared your own will. Many times they do not. Here are a few examples:

Let’s say you inherited your house from your parents and you and your spouse live there. You also have two children who are in their early twenties. Most, if not all of us would want our spouse to inherit the home or at least be able stay there until they died or were ready to move on their own schedule.

If you die with the Government’s Will, only one-third of your home will go to your spouse and the other two-thirds will go directly to your children. They have the power to force the sale of the home, kick your spouse out and probably blow the money quickly. Your spouse could be left without a home and only a third of the money and even worse, your young children could potentially squander most of their inheritance.

Let’s say you’re a single person who has a very strained relationship with your family. You haven’t spoken to them in months or years and they are generally unkind to you. If you die with the Government’s Will, it is almost guaranteed that one or more of your family members will receive all of your property. By creating your own will and opting out of the Government’s Will, you can leave your assets to your friends or a charity.

I think most people can understand that without a will, you forfeit your right to determine how your estate is distributed. But it gets worse.

For the select few where the Government’s Will actually aligns with their own testamentary intent – consider the additional and completely avoidable monetary costs of the “Government’s Will”.

If you are widowed with children and you don’t have a will then your children will get your assets. But at what cost? If you had opted out of the Government’s Will and created a trust, you could avoid costly probate fees. A $500,000 estate will cost you $13,000 in probate fees. If you opted out and created just a simple will, you could have avoided the cost of posting an unnecessary bond for the court. A typical surety bond can be around $2,000 a year for a $500,000 estate. The list goes on and on.

The bottom line is that we are all born with, and unless we have chosen otherwise still have, a will – a costly and inefficient will that may leave your assets to people whom you’d rather not provide for. You can opt out by consulting with a competent estate planning attorney and taking steps to ditch the Government’s Will for something better, more efficient and more in line with your own wishes. Doing something is better than nothing.

\



Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>