Courtesy of Julian Block

I recently received an email from someone I’ll call Mabel. As Mabel explained, she’s single, age 26, and lives at home with her parents in Buffalo. She has designated her father as beneficiary of all her savings and investment accounts. Having done so, Mabel now wonders whether that relieves her of the need to write a will.

Mabel’s comment, unfortunately, reflects an all-too-common misunderstanding of the purpose that a will serves. It’s true, as far as it goes, that Mabel needn’t have a will, for the savings and investment accounts go automatically to her father; after all, she named him beneficiary. Nevertheless, it’s vital that Mabel prepare a will.

Among other things, Mabel certainly has to consider what will happen if she outlives her father. Suppose he does die first, she hasn’t named an alternate beneficiary on the accounts, and she dies without a will? Then upon her death those assets pass in accordance with the intestacy rules of New York. (In legal lingo, when someone dies without a will, which well more than half of us do, that person is said to die intestate.)

Inflexible laws: Each of the 50 states has laws concerning wills, and all of those laws read differently. But, inasmuch as New York and the other 49 states must deal continually with the problem of how to dispose of property left by persons who fail to prepare, take it on faith that all 50 of them have enacted legislation that covers intestate individuals. Without exception, those laws are impersonal and inflexible.

What’s vital for Mabel to understand is that the intestacy rules are going to decide where her property goes when she dies without a will, regardless of what she prefers and whether it makes sense from, say, the standpoint of taxes.

For instance, the intestacy laws could disinherit someone (other than her father) whom Mabel particularly wanted to benefit and send her property to, say, another relative, someone she loathes and would never want to benefit. Or, the laws could cause her property to be divided in a way that gives most of it to cousins who are already wealthy.

What should Mabel do to avoid these occurrences? All she has to do is have a will or some other advance arrangement, such as the kind of beneficiary designation she already has, or hold property in joint ownership with the “right of survivorship.” This means that when one joint owner dies, the other automatically becomes the owner.

Don’t forget about the spouse: It’s not just Mabel and other singles who overlook the need to prepare wills. Married couples are no less remiss.

Many couples mistakenly think that they’re relieved of the need to bother with wills because they own most of their property jointly. Or, they think that it’s just the husband who needs a will, because the property automatically goes to the wife on his death—or because she has little property in her own name.

Those couples fail to consider what could happen if they’re both involved in an accident, in which he dies, and she lives for just a short while. All of their joint holdings (bank accounts, real estate, mutual fund shares, and stocks, to cite some of the more common examples) will become owned in her name alone.

Because she left no will, the assets would then pass under the intestacy laws to her family. Forget about the couple’s understanding, say, about setting money aside for the education of his children from a former marriage. So a husband and wife both need wills, even though they own their property jointly.