Occasionally, clients believe that they do not need a Last Will and Testament. Reasons for this vary, including the assumption that the person’s family knows how assets are to be distributed or the belief that verbal instructions or written lists are sufficient. Without a formal Will, however, assets must pass according to a statute.
If you die without a Will, the probate court will appoint an Administrator for your estate. The court’s choice may not be the individual you would have selected. The court-appointed Administrator will distribute your property according to the state intestacy laws. These laws may differ from your desires.
In Iowa, if you die without a Will (intestate), and if you have no children or children only from your current marriage, your entire estate will pass to your surviving spouse. However, if you have children from another marriage, your surviving spouse will receive either one-half of your estate or the first $50,000.00, whichever is greater. All of your children will share equally in the remaining portion of your estate. Iowa law also gives your surviving spouse the right to select which property will comprise this share, and the share will almost always include the principal residence (homestead).
If you have no surviving spouse, your estate will be divided equally among all of your surviving children. While this includes children adopted by you, it does not include step-children. If you have no surviving spouse and no children, the rules of inheritance follow a strict pattern to your parents, then to your siblings (the children of your parents), then to your grandparents and the children of your grandparents. In the absence of surviving family members, your entire estate could revert to the State of Iowa.
As you can see, these rules assume that you want all of your immediate relatives to share equally in your estate. You may not want your siblings or cousins to share in your estate. These rules also do not account for gifts you may want to make to friends or charities. In a legally-executed and properly drafted written document – your Last Will and Testament – you can nominate the representative of your estate and set out a plan for the division of your assets. The major benefit of a Will is that it allows you to direct the distribution of your estate according to your wishes, rather than according to the rules of inheritance.