A Last Will and Testament is one of the most critical, but often neglected, parts of a sound financial plan.

While it seems that common sense would dictate who will receive your assets or take care of your children in the event of your death, common sense does not always prevail in the absence of a Will.  Even if you and your family agree on how your property will be divided and who will care for you children when you pass away, such an agreement is not enforceable without a Will. 

Your Will serves some very important purposes. It lets you decided who gets your property (everything from jewelry, cars, real estate – even your pets) and enables you to name a guardian of your choosing for your children.  A Will also allows you to appoint an executor (now generally referred to as a Personal Representative) who will administer your estate and carry out your wishes once you are gone. 

Taking the time to create a Will is a kind and generous service to your family and friends. It also ensures that the the wealth and property you spent you lifetime building is passed on in the manner you choose. 

Having a Will in place when you die can:

Make things easier on your family and friends.
Having a Will will allow the details of your estate to be worked out quickly and easily. Without a Will, the State appoints an administrator to divide your assets. In addition to a longer and more complicated process in Probate Court, this can also result in more of your estate going towards administrative fees.

You can leave your family with more money.
A properly prepared Will and Estate Plan can significantly cut down on the estate taxes and administrative fees payable out of your estate. You can also help ensure that your family members get the types of assets they need to live comfortably, which may not happen without a Will. The relatively small amount of time and money required in having a Will prepared for you pays off several times over in more money for your family, friends, or favorite charities.

Your heirlooms, keepsakes, and collectibles stay in the family.
Without a Will, the person charged with settling your finances may be required to sell all off your assets and turn them into cash. A Will helps you protect items of family or sentimental value from being sold. 

Protect your children in your absence.
Making a Will may be one of the most important things you'll ever do for your children. Your Will is a way you can have a say in who will take care of and raise your children in the event that both you and your spouse both. A Will also allows you take care of their future financial needs and set aside funds to provide for their education.

Special Note about your Will and the effect of separation and divorce:
A divorce between two parties occurring after a Will has been executed does not invalidate the Will itself, but it does invalidate all provisions in the Will that apply for the former spouse. Essentially this means that the law assumes that when a person divorces they do not intend to leave anything to their former spouse.  Therefore, the Will is administered as though the former spouse has died prior to the death of the Will’s creator.

Caution: Before the final decree of divorce has been entered, each spouse retains his or her rights to the other spouse's property, unless the parties have entered into a Separation Agreement settling those rights, or the court has otherwise terminated those rights (such as in a Divorce From Bed and Board action). If you are involved in a divorce proceeding, ask your attorney about what you can do to protect your property in the event you die before the final decree of divorce has been entered.  The law in North Carolina requires that a couple be separated for at least one year and a day before filing for a divorce.  During that time you remain legally married and, unless you have a written agreement stating otherwise, your soon to be ex-spouse will still inherit all of your property.

Problems associated with Writing your own Will:
Every person has the legal right to draft and execute his or her own Will. However, do-it-yourself Wills often create problems:

• Laws vary from State to State, making it difficult for any single book, form or software program to be as comprehensive as may be needed.

• Many words have special meaning in the law that may not be obvious to a non-lawyer.  If you are not certain how specific state laws effect wording in a Will, your Will may have consequences you never intended.

• If your will is not drafted correctly, it could significantly increase the administrative expenses or fail to be effective in carrying out your wishes.

An attorney can help make sure that your Will and estate plan accurately reflect your intentions. Note: Although you may write your own Will, it is illegal for a non-attorney to write someone else's Will.

Dying Without out a Will:
Some people are surprised by the rules in North Carolina for calculating the required division of property and distribution to beneficiaries if there is no Will. Here is an example of how shares are calculated:

The Smith family has five children - Jennifer, John, Shannon, Bob, and Alison. When Mother Smith dies, John, Shannon Bob survive her. Jennifer previously died and left one child, Timmy. Alison also previously died and left four children - Judy, Frank, Cindy, and Jim. Mother Smith's estate is valued at $500,000, after creditors and taxes. John, Shannon and Bob would each inherit $100,000 (1/5 of $500,000). The five grandchildren, Timmy, Judy, Frank, Cindy, and Jim, would each inherit $40,000 (1/5 of $200,000). (Note: the children of the three surviving children are not considered.)

Many people would assume that Timmy would have inherited his deceased mother’s share of $100,000, leaving his four cousins to share their deceased mother's share of $100,000, giving them only $25,000 each. If you would prefer this result for your family, you will need a Will to clearly state the manner in which you wish your property to be distributed.

On the other hand, if you have a Will and prefer the result in the example which treats the grandchildren equally, discuss this preference with your attorney so he or she can reflect this desire in your Will.

Read North Carolina law regarding Property Distribution without a Will.

More ways to protect your family with Estate Planning.