If you are like the majority of people in America, you do not have a signed will. Just because you do not have a signed will, does not mean you do not have a “will”.
In the absence of a signed will, Michigan statute determines who will get what after you are gone. So even if you think you do not have a will, you actually do. Unfortunately this one has been written for you by your State legislators.
If you are not married and you die without a will, your property or stuff would be divided equally among your children. If any of your children predecease you, their share would go to their children, then grand-children etc., if they have any. If your predeceased child has no living descendants, their share would be divided among your other living children.
But if you have no living descendants, your stuff would go to your living parent(s). When both of your parents have predeceased you, your estate would then be distributed to your parents’ children, then to grand-children etc., down the line until a living descendant of your parents is found. Only if you had no living relatives, would your stuff end up going to the state unclaimed property fund.
Married persons present other issues. You may have been married for a number of years. Most long-term married couples generally want some variation of the “Honey I love you, I leave it all to you” plan. With this type of plan, the kids usually only get something when you are both gone.
Unfortunately if you have no written will or trust, this may not be what happens. If you and your spouse have joint biological children and you died without a will or trust, your surviving spouse would only get the first $201,000 of your probate estate in 2010. The rest of your estate would be divided into two equal shares, one share for your surviving spouse and the other share to be divided between your joint biological children. This is not a “Honey I love you, I leave it all to you” plan. If your primary asset was your home, your spouse may have to sell the home to pay off the kids.
There is often an unwelcome surprise for your children in short-term second marriage situations. Many people in short-term second marriages want their separate property to go to their respective biological children. This often times is not what happens.
For example, let’s say you died without a will or trust after a second marriage to Thor, your Swedish personal trainer, or Bambi, your aerobics instructor, who is much younger than you and outlived you. If your children are not also children of Thor or Bambi, then Thor or Bambi would keep the first $134,000 of your probate estate in 2010. One-half of the rest of your estate would go to Thor or Bambi and the other half of the remainder would be divided among your biological children.
I know of one case in which a fellow died two weeks after remarrying. He did not have a will. His new wife received more than one-half million dollars for this two week marriage and was in control of the entire estate. The kids only received a fraction of what they would have received two weeks earlier before the marriage.
The best way to assure that your property would be going to your children or other beneficiaries instead of Thor or Bambi is to firstly have a properly drafted will or trust based estate plan. And secondly, have Thor or Bambi sign a pre- or post-nuptial agreement. With this agreement, Thor or Bambi would waive any claim he or she would have against any of your property upon your death. In this way, your entire estate would go to your children or other beneficiaries instead of some going to Thor or Bambi or their kids.
Conversely, in long-term second marriages, you may want a variation of the “Honey I love you, I leave it all to you” plan. When one of you dies, you may want the other to have it all. Only after you are both gone, then the kids can have it.
You may consider Thor or Bambi’s children as your own . . . or even better than your own. You may want all your children and Thor or Bambi’s children each to receive shares of your and Thor or Bambi’s estate.
If you and Thor or Bambi did not have a will or trust, this may not happen. If you died first in 2010, your children would only receive one-half of the assets titled in your sole name at the time of your death which are in excess of $134,000.
The rest of the marital estate including property owned jointly with Thor or Bambi would go to Thor or Bambi. Upon Thor or Bambi’s death, all of the property now in Thor or Bambi’s name, would only go to Thor or Bambi’s biological children. Your children would receive none of these assets.
You can enter into a contractual agreement with Thor or Bambi in your will or trust, which assures that all the children receive their fair share. This contractual agreement in your will or trust is not the same as a pre- or post-nuptial agreement. In a pre- or post-nuptial agreement, you and Thor or Bambi typically waive all claims to each others’ estates.
With this contractual agreement on the other hand, you and Thor or Bambi usually would both agree in your wills or trusts to first leave everything to each other. When both you and Thor or Bambi are gone, you both would then leave everything to both your and Thor or Bambi’s children. You and Thor or Bambi then would agree in a separate provision in your will or trust to not change your wills or trusts. This agreement to not change your wills or trusts locks in the distributions to each other first and then when you are both gone, to all the kids of both of you.
With second marriages, it is extremely important to have your estate planning documents in place to make sure that your wishes are going to be followed. It should be made clear whether or not Thor or Bambi or their children are to receive any share of your estate. With a properly drafted estate plan, you can make sure that after you are gone, you give what you have to whom you want when you want the way you want.
By: Matthew M. Wallace, CPS, JD
Published edited April 11, 2010 in The Times Herald newspaper, Port Huron, Michigan as: If there is no will, there still can be a way