Guest Column: Do I need a will? Can I do it myself?

Whether you need a will is not as simple to answer as you may think. And if you do need one, should you save money by doing it yourself through an online program? Saving money now could prove costly later.

A will’s purpose is to direct your executor — the person you name to carry out your wishes — on how and to whom your assets are to be distributed. Many times, that will be to a revocable trust, which instructs how your assets ultimately should be distributed.

If you don’t have a will, probate assets — assets titled in your name alone with no named beneficiary — will pass under New York State’s intestacy laws. Only probate assets are covered by your will or by the laws of intestacy.

Non-probate assets include joint assets that pass automatically to the joint title holder at your death, as opposed to assets held jointly as tenants-in-common; assets that have a named beneficiary; and assets held in a revocable trust. Most retirement accounts and life insurance policies designate beneficiaries, making them non-probate assets. The directions in your will do not affect the distribution of these non-probate assets unless the named beneficiary is your estate.

How this works

As an example, Rick and Ginger own their bank accounts at Dime, brokerage accounts at UBS and their Southold house jointly with right of survivorship. When one of them dies, those assets will pass directly to the other.

If Rick dies first and had wanted his Dime and UBS accounts to be held in trust for Ginger and his children at his death, those accounts should have been in his own name, not held jointly with Ginger, so that his will could control what happened to the accounts.

If Rick had a will, this type of mistake may be fixable. Ginger could disclaim up to one half of the account that was to pass to her outright by signing what’s called a renunciation in New York and filing it with the court within nine months of Rick’s death. The portion of the account Ginger disclaims would then be included in Rick’s probate assets. Then, the terms of his will directing that his assets be held in trust for Ginger and his children would prevail.

In the absence of a will

If you die without a will, New York’s intestacy laws apply, and who receives your probate assets depends on which relatives have survived you.

Under intestacy, if you are unmarried with no children, your assets go to your parents or, if they did not survive you, to your siblings. If you are unmarried and have children, your assets pass to your children. If you are married with no children, your assets pass to your spouse. If you are married and have children, $50,000 and one-half of your probate assets pass to your spouse, and the other half is distributed among your children.

Since most married couples with children intend for the surviving spouse to have the use of all of their assets during their lifetime, you need either a will or another estate planning technique, such as a pour-over will and a revocable trust, to make sure this happens.

In your will or revocable trust, you can give your spouse the use of all your assets during his or her lifetime, while still taking advantage of estate tax exemptions. You can also provide that any assets passing to children or grandchildren be held in trust until they reach a certain age, or for their lives or longer. If you have minor children, you most certainly need a will to name a guardian and to provide trusts for them.

Short-term savings can cause long-term problems

If you’ve determined that you need a will and/or other estate planning documents, it can be risky to try to save money by doing it yourself with an online tool. Doing it yourself might subject your estate to costly litigation by disgruntled heirs — and you might also run the risk that the documents do not do what you intended.

Online do-it-yourself, or DIY, services use boilerplate forms, which do not consider the nuances of family dynamics and consequences. The language in a legal document matters. Estate planning documents can have differing results depending on the words chosen. Similarly, you may not be fully aware of the consequences of using certain terms when directing the distribution of your assets.
Experienced trusts and estates lawyers use their knowledge and prior experience with many families to help you fashion the estate plan that is right for you.

You worked hard for your assets. A will and other estate planning documents can help ensure that your assets pass according to your wishes. To avoid costly consequences, make sure a lawyer well-versed in estate planning prepares the documents.

Ms. Marcin is a partner at Rivkin Radler LLP, where she concentrates in trusts, estates and tax law.