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|Legal Consequences of Dying Without a Simple Will||Views: 731|
|Nov 04, 2010 2:31 am||Legal Consequences of Dying Without a Simple Will||#|
Luther Thompson, Jr.
|Legal Consequences of Dying Without a Simple Will|
On July 4, 2009, NFL quarterback Steve McNair was found murdered in a hotel room in Nashville, Tennessee. McNair didn't have a will at the time of his death. In legal jargon, this is known as dying intestate. When someone dies without a will, state law governs how his estate is administered. In McNair's case, Tennessee law governs since it was his place of residence, also known as his domicile, when he died.
McNair was married at the time of his death, and his widow was appointed administrator of his estate. McNair had four sons, two from his current marriage and two from previous relationships. Under Tennessee law, when one spouse dies without a will, the surviving spouse is automatically entitled to at least one third of the estate, and the surviving children split the rest. It is possible that this division may have very well been what McNair intended, but without a will to express his final wishes, nobody will ever know.
Certainly, McNair could not have intended the tax consequences of dying without a will. It is estimated that McNair earned about $90 million during his NFL career. Generally, the larger the value of the estate, the larger the tax burden. If McNair had not established any tax avoidance protections, such as the creation of a trust, his estate may have an enormous estate and inheritance tax liability.
The McNair case highlights the importance of having a will. The cost of creating a simple Will is minimal but avoids considerable trouble.
If you die without leaving a will, the legal consequences can be disastrous, particularly if you have a lot of assets. Instead of being able to decide in advance how your property will be divided among your heirs, your assets are distributed according to the state laws where you were domiciled and/or owned real property at the time of your death.
Additionally, the outcome may be entirely against what you wanted to happen and can also lead to fighting among your heirs over the distribution of certain items, such as items having sentimental value. A judge shouldn't decide who receives a family heirloom.
Mechelle McNair, Steve's wife, has been named administrator of his estate. She's named her two sons, Tyler and Trenton, as heirs. But here's where it gets weird. McNair has two older sons from a prior relationship - Steven McNair, Jr. and Steven O'Brian Koran McNair. Mechelle did not list either as an heir. Under Tennessee law, Mechelle McNair, as his wife, gets 1/3 of the estate and the remaining 2/3 is split evenly among the deceased's heirs. No one knows why Mechelle failed to mention the other two kids.
In addition, there are negative tax consequences that may arise for your estate as well as your heirs if you don't have a Will and don't provide for any tax avoidance methods. Both federal and state governments may impose taxes on the transfer of your property, and a tax may also be imposed on the property distributed to your heirs.
The easiest way to avoid this scenario is to create a Will. Your Will guides the court, the person you choose to administer your estate, and your heirs on how to distribute your property and pay your debts.
There are ways to limit the amount of taxes your estate will have to pay when you die. For example, you may transfer some of your property while you're still alive. This is known as an inter vivos gift. It reduces your taxable estate because if you don't own it anymore, it can't be taxed. Other ways to avoid estate and inheritance taxes include creating a trust or purchasing a life insurance policy.
The best way to make sure your loved ones will be properly cared for and your estate distributed according to your wishes is to consult an estate planning attorney who will advise you on how to best protect your assets and ease the tax burden on your estate and your heirs.
Luther Thompson, Jr.
Luther Thompson, Jr. & Associates
PO Box 1026
Atlanta, Georgia 30156-1026
Voice Mail: 866-485-7373
P.S. We live in a wonderful country of Law & Order. It has been found that 80%, of Americans, do not have a simple Will. The McNair case highlights the importance of having a will. The cost of creating a simple Will is minimal but avoids considerable trouble.
P.P.S. It is being learned the hard way, that when you pass away, if you donít have a simple Will, the State can take claim to all your possessions. State law can and will govern how your estate is administered. Thatís not what you want! With a Pre-Paid Legal Services membership for $17/month, a Will is part of the deal! For more information, visit us online.
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