Why a Will is So Important for Spouses in a 2nd Marriage (Part 1)
I have often heard people say that they don’t need a will. “My wishes are known by my family”, they’ll say. But a recent call to our office shows how wrong that can be.
Mary’s husband John had passed away from a long illness. Although he had time to prepare a will he never got around to it. John’s marriage to Mary was the second for both of them. They each had children from their first marriage. In John’s case he had 3. They had no children from their marriage to each other.
Because John had no will, the determination of some of his assets would have to be made by the State of New Jersey according to what are called intestacy laws. The State has predetermined to whom assets are transferred at death when there is no will to give us any instruction.
Except that not all assets pass in this manner. Only probate assets are distributed according to the guidance of a will and so only these types of assets are distributed by way of intestacy laws. What exactly are probate assets?
It is easier to explain what non probate assets are. Any asset that has a designated beneficiary upon death such as an IRA or life insurance or a non retirement account with a POD (payable on death) or TOD (transfer on death) designation is what is called contract property, which does not pass by way of probate.
A second class of non probate property is anything that is held by more than one owner jointly with right of survivorship. When one co-owner dies that share automatically passes to the remaining co-owners.
What is left then is anything that does not fall within in the first two categories of property. That would be any asset owned alone with no co-owners and no POD or TOD designation. With no will, that is what passes according to the intestacy laws.
Next week I’ll explain exactly why it was a problem for Mary that John died without a will.