Whether presenting to groups of individuals or during initial client consultations, I often state, “you need an estate plan; otherwise, the State has a plan for you, and you may not like what it says.” What I mean by the comment is if an individual dies without leaving a Last Will and Testament (dying intestate, then State law dictates (intestate succession) who will receive your probate assets (property not governed by payable on death beneficiary designations or survivorship rights) and in what fractional shares.

For example, assume an Alabama resident passes away intestate, leaving a spouse and two children surviving. Next, assume the deceased person always believed and intended, as many do, that his or her spouse would receive all of his or her property at death. Unfortunately, that is not the result with respect to the person’s probate assets. 

In this situation, Alabama intestate succession law divides the person’s probate assets in approximately half. The surviving spouse would receive half of the assets. The other half of the assets would be divided equally between the two surviving children – a vast difference from the deceased person’s belief and intention. Therefore, having a will to govern the distribution of property at death (dying testate) instead of intestate succession law governing the distribution is just one of many reasons why every individual capable of creating a will needs to do so.

For those individuals with a minor child or child who has been incapacitated since birth, Alabama law permits such individuals to nominate a guardian for the child in the event of death at a time when the child still requires a guardian. Failure to have a will make the nomination, when applicable, leaves open the possibility of the necessity of a time-consuming and perhaps costly guardianship court proceeding at the death of the parental guardian, in addition to possible litigation among relatives or others desiring guardianship of the child.

In addition, unless a will relieves them, probate law places numerous formalities on the person appointed as the personal representative to administer a probate estate. The more well known of these formalities include obtaining a surety bond insuring the non-realty assets of the probate estate, filing an inventory of probate assets with the court and making a final settlement with the court. In almost all circumstances, when preparing the will, a person will want to relieve these requirements of the personal representative to minimize estate administrative expenses and the time required to satisfy the formalities.

Any estate plan should include the preparation of an Advance Directive for Health Care with a Living Will and Durable Financial Power of Attorney. These documents allow a person to appoint someone who will make his or her healthcare and financial decisions if the person is later unable to do so on his or her own. Failure to have such documents could cause a costly and time-consuming court proceeding in order for another person, who might not be the person the then-incapacitated person would have named in his or her documents, to be permitted to make said decisions.

If loved ones are to avoid the issues mentioned above, then create an estate plan for their benefit and peace of mind.

~David B. Welborn is originally from Alexander City and is a partner in the law firm of Browder & Welborn, LLC.