Updated: Jun 22
Mike and his wife Michelle had been married for three years. She was the primary breadwinner in their family. He was working to get a new business off the ground and she was a general manager of a national restaurant chain. Their bank accounts were joint. They each had a small life insurance policy naming each other as beneficiary. Since Mike was opening his own business, they had decided that the house should only be in her name. They had one child and she was happily pregnant. They never seriously thought about the need for Wills. They were a normal young couple in their 30s, never seriously thinking about death. They thought they had their full lives in front of them. Regardless, they thought that the law treated everything they owned as 50/50, after all, they knew if they got divorced, Mike would have an interest in the house regardless of whether his name was on it. It only made sense to assume that if anything happened to either of them, the other would get everything.
Michelle went into labor and their second child was born. A happy, healthy, baby boy. They moved from the delivery room to a recovery room. Everything seemed normal, until it wasn't. In the middle of the night Michelle started bleeding. She ignored it thinking it was normal, but it wasn't. The bleeding continued getting worse and worse. By the time they realized something was wrong, it was too late. Mike left the hospital with a new baby, but without a wife.
Things only got worse for Mike. Not only had he lost his wife, but he also lost her income. Her life insurance policy was enough to pay for her burial, but that was it. He abandoned the new business and went to get a job. He didn't have the skill set to make as much as Michelle had. He landed a job making 75% of what Michelle had been making.
He realized he needed to sell the house and buy something smaller in order to make the mortgage. He didn't own the house, Michelle did. Mike went through the probate process and was appointed Administrator of his wife's Estate and sold the house. The only problem was, under Georgia law, he was only entitled to 1/3 of the value of her property. The Probate Court appointed an independent attorney for Michelle's two minor children (Mike's children) and that attorney demanded that the children's portion of the equity from the same of Michelle's house be put into trust accounts for the children to be held until they turned 18 years old. Mike was left with a measly $15,000 of the $45,000 in equity from the house; not enough for a down payment. Mike and his children were forced to move into an apartment, in large part, because Michelle didn't have a Will. Is that what you think Michelle would have wanted?
When someone passes away without a Will they are considered to have passed away "intestate". Intestate law says that the property is split equally between the deceased person's spouse and children, with the spouse receiving a minimum of 1/3. Our legislature did this to ensure that in second marriages the deceased person's children don't get unintentionally disinherited. However, it creates real problems in a first marriage, especially when there are minor children.
If Michelle's children had all been adults, they could have said "Dad, we want you to have it all" and disclaimed their interest in Michelle's Estate. Since they were minors, they Court could not allow their interest to be disclaimed. The real question is, if Michelle had thought about this; if Michelle had known this is how Georgia would allocate her property if she passed away without a Will, would she have gotten a Will? The answer is probably yes. She may have had some of the normal 30 year old invincibility, but she would have wanted her husband to have everything so he could care for their children.
Do YOU want your property to be split between your spouse and your children when you pass away or do you want it all to go to your spouse? For that matter, do you want it to go somewhere else? If you want it all to go anywhere other than equally between your spouse and children (with your spouse receiving a minimum of 1/3), you need to take affirmative action. You need to execute a Will informing the Court as to how you want your property divided, telling the Legislature that they don't know better than you do and that you will decide who to give your property to. Some people would say you can simply download a template Will from the internet, but next week we will talk about why that's a bad idea.