Estate Planning: Wills and Intestacy - T. Rowe Price

A will is a legal declaration of your instructions for the distribution of your estate after your death. Primarily, your will indicates what should happen to certain types of assets, who is appointed as executor to carry out the provisions you made in your will, and who is to be guardian of any minor children. A will cannot, however, control the distribution of property that does not end up in your estate for probate purposes, such as property held in joint tenancy with rights of survivorship (WROS); assets controlled by a trust; or assets that already have beneficiary designations in place, like life insurance policies, pensions, retirement accounts, and accounts with payable on death and transfer on death designations.*

*For all of these types of assets, except for those held in a trust, if the joint owner or designated beneficiary does not survive you, the asset typically would be included in your estate for probate purposes. Regardless of whether they go through probate, they will be included in your taxable estate.

Creating a will is not mandatory, but it is crucial to understand that state law would determine the distribution of your assets that become part of your estate and the guardianship of your children if you die intestate (without a valid will in place). Under the laws of most states, your assets would go to your spouse, children, and/or parents following the state laws regarding distribution, which may not be how you would choose to distribute them. If you are unmarried without children or living parents, your assets pass to your next closest relatives. If no relatives can be located to inherit your assets, they would go to the state of your legal residence. The courts of your state would also determine who would care for your minor children and who would manage your children's financial affairs if there is no other parent or designated legal guardian.