Most people do not have a Will. I was recently at a seminar and a group of lawyers were asked if they had Wills. Only about 10% raised their hands. Here are what I think are the reasons for this.
First, most people don’t think they are going to die until they reach 70 or 80 years of age. No one plans on dying before then. Second, contemplating one’s own demise is unpleasant, so it is avoided. Third, despite occasional acts of altruism, most people are motivated by things that benefit them, not things that benefit others. Wills mostly benefit others.
So, what is the downside of not having a Will? If you die without a Will, you are said to be “intestate.” Each state has its own laws of intestacy. In Oregon, if you die intestate everything will go to your spouse. If you are unmarried, widowed or divorced, everything will go to your children to be split among them equally (or to your grandchildren if a child has died). If you do not have a spouse or children, everything will go to your parents.
If both your parents are dead, everything will go to your bothers and sisters or to your nieces and nephews if a sibling is dead. If you have no brothers, sisters, nieces or nephews, everything will go to your grandparents and any aunts, uncles or cousins. (The division of the assets among persons of different generations is “by right of representation,” the definition of which I will leave to another day. If you want to research the definition yourself, read ORS 112.065.)
If you have no living spouse, parents, siblings, grandparents, aunts, uncles or cousins (who must be descendants of the same grandparents), only then does your estate “escheat” to the State of Oregon.
However, there are some other advantages to having a Will. In a Will, you appoint a Personal Representative to act as executor. Without a Will, the probate court will appoint a qualified person under the law, but that person may not be the one you would have chosen. Also, if you have a Will you can nominate a guardian for your minor children or other dependants. Without a Will the court will appoint someone, but again it may not be the person you would have chosen.
In a Will, you can create a trust for minor children, giving a trusted person (the trustee) control over the children’s monies until they reach a suitable age. Without a Will, your children will receive their full inheritance when they turn eighteen, whether they are mature enough to handle it or not.
In addition, a Will allows you to be much more imaginative with your giving. You can give specific amounts or specific things to specific persons or institutions. You can even disown a person should you care to. (You cannot prevent a spouse, however, from receiving at least one-quarter of your net estate, reduced by the value of property given outright, by value of a life estate or an annuity.)
Finally, if your estate is large enough to benefit from them, a Will allows you to make tax saving decisions that would not be available to you if you were you to die intestate.