People of modest means often believe that wills are just for the wealthy. However, this is a misconception, and a more accurate gauge of whether or not you need a last will and testament is how much you care about what happens to your property and your family when you die.
If You Own Property
If you don’t leave a will, all property you own is distributed to your next of kin according to a formula set by the state where you live. Your spouse and children are usually first in line to receive your assets, followed by your parents, your siblings, then more distant relatives. If you have no wife or children, the court will give your property to your parents or siblings, even if you have been estranged from them or if they neither want nor need it. You can avoid all this by naming who you want to receive your property in a will.
If You Want Your Spouse to Control Your Children's Assets
If you have both a spouse and minor children, your property is divided among them if you die without a will. But your spouse will not necessarily control your children’s share. If you die without a will, the court will usually appoint a guardian to oversee their financial interests until they turn 18. Even if your spouse is appointed to do this, she must report to the court on the status of their inheritance every year or so.
If You Care Who is Going to Settle Your Estate
Wills commonly name an executor, the person you want to oversee the probate of your estate when you die. If you do not leave a will, the court will appoint someone. The appointed executor could be a complete stranger to you, someone who does not necessarily have your family’s best interests at heart or is not aware of any special needs.
If You Have Minor Children
If you have minor children, their other parent will take custody of them if you die. If you perish together and do not leave a will, the court will decide who raises them. Depending on their age, your children's wishes might not be taken into consideration. Their appointed guardian might not be who you would have chosen. If you leave a will, you decide who raises your children when you are gone.
If You Have a Living Trust
A revocable living trust does not eliminate the need for a will entirely. With a living trust, you transfer ownership of your property to the trust entity while you are alive. This avoids probate because the trust does not die along with you and it now owns your property. However, if you neglect to transfer ownership of any asset to the trust, it is subject to the probate laws of your state when you pass away. You can avoid this by making a “pour over” will, stating that anything owned outside the trust at the time of your passing should be transferred to the trust.