August is National Make-A-Will Month, so if you do not have a will yet, now is a good time to learn if a will is for you!
What is a Will?
A will is a legal document instructing your executor of what should be done after your passing. After you die, your will becomes irrevocable, and cannot be changed. In your will, you can name the following:
- an executor. This can be a person or an institution whose job will be to collect and manage your assets; pay off any outstanding debts, expenses or taxes; and after the court approves, distribute your assets according to your will.
- beneficiaries, who will receive assets according to your will. Your beneficiaries can be your spouse, family members, friends, or charitable organizations.
- a guardian for your minor children. You may choose an individual to care for your child until they turn 18. You may also choose a guardian, who may or may not be the same individual, to manage your child’s assets until he or she turns 18.
What Won’t My Will Cover?
Here are some examples of assets your will does not cover, even if they are included in your will:
- Your spouse or domestic partner’s half of community property. Anything in your will that is community property will only affect your half of the share of the community property.
- Community property with the right of survivorship. If you hold title to any assets, such as real estate or bank accounts, in you and your partner’s names as “community property with the right of survivorship,” those assets will pass to the surviving partner without being affected by the will.
- Assets owned as a joint tenant with right of survivorship. This is similar to the previous point in that any assets held in joint tenancy with right to survivorship will pass directly to the surviving joint tenant without being affected by the will.
- Retirement plans and life insurance. These will pass directly to the beneficiary you have listed on the plan documents, regardless of what is written in your will.
- Assets held in a revocable living trust. Any assets held in a revocable living trust will be distributed according to the instructions in the trust regardless of your will. This distribution of assets does not require court supervision.
What Happens if I Don’t Have A Will?
Dying without a will is known as intestate and California law will decide the beneficiaries of your estate.
- If you are married or in a registered domestic partnership, your spouse or domestic partner will receive all community property assets. They will also receive a part of your separate property assets. The remaining assets will be distributed to other close relatives such as parents, children, siblings, etc.
- If you are single or not in a registered domestic partnership, your assets will be distributed to your children or grandchildren, if any, and if not, parents, siblings, or other relatives will receive your assets. If your domestic partner dies before you, his or her relatives may be entitled to some, if not all, of your estate. Friends and non-registered domestic partners will not receive anything if you die without a will.
- If you die intestate and you and your deceased spouse or registered domestic partner do not have any living relatives, the State of California will be the beneficiary of your estate.
What Other Planning Should I Do?
- It would be a good idea to include a list of assets and debts with your will so your executor knows where to find this. You should include a list of bank accounts, safe deposit boxes, stocks and bonds, real estate, and other assets on the list. The list of debts you owe should list the names and contact information for those you owe debts to.
- Another important document would be to have a Durable Power of Attorney for Financial Matters. This gives another individual the power to make financial decisions for you when you become incapable of making such decisions for yourself.