03 Jul Do I really need a will to help my son when I die?
Q. I am single with one heir, my son. Should l make a will naming him executor or name him POD on my accounts?
A. You can do both, but a will is important to have for several reasons.
First, naming your son as the beneficiary on a POD – payable on death – or TOD – transfer on death – account only governs the transfer of that particular account upon your death, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.
“If you have any other property – for example, personal property, a car, a tax or credit card refund that is coming to you and not designated as to be deposited into that account – without a will, such property will pass to your son by intestacy,” Romania said.
For items such as a car or a check, your son may need to be appointed as an administrator by the surrogate in order to transfer the property, she said.
Romania said an individual appointed as administrator of an estate under intestacy generally has to post a bond based on the value of the estate’s assets.
“Obtaining a bond can be problematic depending on the administrator’s credit history, employment and own assets,” she said. “Although a bond is not required for small estates – estates not exceeding $50,000 if passing to a spouse and $20,000 if passing to other than a spouse – to qualify as administrator of a small estate, the assets must be specifically identified.”
This is sometimes frustrating because often financial institutions will not provide information regarding accounts until after the administrator is appointed, she said.
By contrast, a will, if properly prepared, will govern the disposition of all of your property not otherwise disposed of by beneficiary designation or joint ownership with rights of survivorship, she said.
Additionally, Romania said, a will names the executor, who is responsible for administering your estate, authorizing third parties to release information to your executor who is charged with collecting your assets, paying your creditors and making distribution pursuant to your will. Plus, your will will generally waives the bond which would otherwise be required by the surrogate.
So having a will is more comprehensive and eliminate headaches for your son.
Email your questions to moc.p1563264814leHye1563264814noMJN1563264814@ksA1563264814.
This story was originally published on July 3, 2019.
NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.