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What happens if I don’t have a will in Missouri?

What happens if I don’t have a will in Missouri?

When you execute a will, you are deciding who gets your stuff when you pass away.  You get to name a person called an executor (in Missouri we call them a “personal representative”) who is going to make sure the stuff you want to go to certain people actually gets there.

Now, if you don’t have a will, the state of Missouri has what are know as intestacy statutes (to die “intestate” means to die without a will) and those statutes determine who gets your stuff, since you never made a will and wrote that down yourself.  Problem is, in not having a will you are allowing the state to dictate who gets your things and that may not be the same people that you want to have those things.

That is exactly why you want to have a will.  They sound fancy but in reality they really aren’t.

Another key aspect of a will for parents with minor children is that they can name guardians for their children in case they passed away.

What is the difference between a living will and a will in Missouri?

People often get confused with the differences between a living will and a will in Missouri.  As explained above, wills primarily deal with who gets your stuff when you pass away.   Living wills deal with end of life situations and what treatments you want withheld if a doctor determines that those treatments cannot heal you.  The purpose of a living will is to give instruction to your family as to what treatments you do or do not want done if you are near death, persistently unconscious or have a terminal illness.  And they have nothing to do with who gets your stuff!  However, they are two of the documents you need to have a complete estate plan.

last will and testament

Avoiding Probate in Missouri

Avoiding probate in Missouri saves time, money and sanity..

A primary goal of almost all of my estate planning clients is to avoid probate.  Probate is the process by which the assets of a decedent are administered through the courts.  Most of my clients know for sure they want to avoid probate but they are not exactly sure why.

The purpose of this article is to explain why probate should be avoided.

There are three primary reasons:  money, time and sanity.

I mention money first because probate is expensive.  Probate fees can include executor fees, attorney fees, court costs, bond costs and miscellaneous.  Executor and attorney fees are set by statute and are based on a percentage of the estate.  The larger the estate the higher the fees.  Court costs are relatively static but add up and can include filing fees, publication fees and service costs.  Here are rough cost ranges for different size estates:  $150,000 = $5,300 – $10,000; $300,000 = $9,400 – $18,200; $750,000 = $21,100 – $41,400; $1,000,000 = $28,600 – $55,100.

Again, to be clear, probate is expensive.

Time is another component of the probate process and if you ask most people that have endured the probate process they will tell you it takes a long time.   First, a probate cannot be filed until at least ten days after someone has passed away.  Once a probate is filed, the estate must be left open for at least six (6) months to allow creditors of the decedent to makes claims against the estate.

Practically speaking, however, most estates take much longer than six months and 10 days to close and that’s because the process can be extremely complex.  For one thing, the executor has to figure out what the decedent owned.  In some cases, the executor (and the attorney for the estate) will spend several months trying to track down all the assets and liabilities of the deceased.

The probate process is very detailed and often involves a lot of phone calls and lots of small steps that are time consuming.  That is why I mentioned the “sanity” aspect of probate, as in losing your sanity.  The complexity and detailed nature of probate drives people crazy.  Add anxious family members waiting on an inheritance and you can see why avoiding the process all together is the best investment of time and money and peace of mind a person can make.

So how can people avoid probate?

The best and most effective way is to establish a living trust.  Probate is necessary because when a person dies, the assets are in their name.  The probate process ensures that the assets of the decedent go to the persons named in their will or as decided by state law if they didn’t have a will.  It also ensures that the debts of the decedent are paid, to the extent they can be.

But the easiest concept to understand a living trust and how it avoids probate is to imagine a box.  The living trust is the box which you place all of your assets during life so that when you pass away there is nothing owned by you as an individual.  It’s owned by the trust and those trust assets are distributed according to the trust terms.  The debts of the decedent are paid out of trust assets, but not through probate.  Again, since the trust owns everything, there is no need for probate.

Trusts are a bit more expensive to create than wills on the front end.  But as we saw above, the back end costs of a will (in probate) are enormous.  Depending on the needs of the client, a trust is a terrific way to save your estate money, time and sanity.

Philip Seymour Hoffman left nothing for his children in his will

Philip Seymour Hoffman left nothing for his children in his will

Actor Philip Seymour Hoffman died earlier this year from a drug overdose.  He left three children and a girlfriend behind.  It was recently discovered that he did not leave anything for his children in his 2004 will.  Media reports such as the one linked above seem to have made this out to be a big deal, but I can tell you as an estate planning attorney, it’s not that unusual.  Here is why:

Hoffman and his girlfriend, Mimi O’Donnell had been living separately at his death, but had also never married, reportedly because Hoffman did not believe in marriage.  They lived, however, essentially the same as a married couple.  They lived together (at least at one time), had three children together and did things together as a family.  Thus, it was as if they were married.  Most of my married clients, at least those with children born of their marriage, leave their inheritance to their spouse, because they trust the spouse to use the inheritance for themselves and the children.  It’s only after the second spouse passes away that most of my clients provide for their children.  The only difference here was that Hoffman and O’Donnell were not legally married.  But, in having children together and having the same trust as most married couples, Hoffman decided he trusted O’Donnell that if he were to die, she would use his estate to support their children and raise them as he would have wanted.

This last point was apparently very important to Hoffman who did not want his children to become “trust fund kids”.  It is interesting to note that Hoffman presumably would not have had to provide directly for O’Donnell in his will because they were not married.  In most states, including Missouri, you cannot cut your spouse entirely out of your estate, unless you have a prenuptial or antenuptial agreement in place.

Estate Planning 101: Difference between an Executor and a Personal Representative

Estate Planning 101: Difference between an Executor and a Personal Representative

An executor  is a person named in a will and appointed by the Probate Court to manage and distribute the estate of a person who has passed away, in accordance with the terms of their will.  If the person named in the will is a male, he is technically called an executor and if they are a female they are referred to as an executrix.  Practically speaking the person named is universally referred to as an executor and the male / female distinction is largely irrelevant.

A few years back, Missouri started using the term personal representative instead of executor.  The name is different, the duties are exactly the same.  Other states often use the term personal representative also.

If a person dies without a will, or the will does not name an executor, or in some cases, the executor cannot serve or has been removed by the Probate Court, a person must be appointed to manage and distribute the estate and they are called an administrator in Missouri.  Again, the duties are the same as that of a personal representative, the difference being that the estate is distributed by a personal representative according to the will and if there is no will with an administrator appointed, then the estate is distributed by the laws of intestacy.