5 minute readPart One of a Four Part Series
See all Installments of the Series
Part One: The Perils of Dying Without a Will or Trust
Part Two: The Inner Workings of a Will
Part Three: Using a Revocable Living Trust to Exercise More Control
Part Four: Comparing a Will and a Revocable Living Trust
Nobody likes to think about their mortality but planning your future arrangements to protect the people you love is important. If you die without a will or trust, the distribution of your assets and property is carried out according to state law and may not reflect your wishes. Passing away without either of these legal documents can lead to lengthy court battles, excessive costs, and unnecessary stress for your loved ones.
What is Probate?
Probate is a legal process that can occur after you pass away. It is a court-supervised procedure involving the distribution of your assets to your beneficiaries or heirs.
While the probate process can be complicated, costly, and time-consuming, passing away without a will makes the process necessary to ensure your assets are distributed fairly. While it may not be the most exciting topic, probate is an important part of our legal system that can provide peace of mind for those family members settling your estate when you pass.
What is Dying Intestate?
Dying without a will is also known as dying intestate, meaning your estate comprising of all your assets, property, and debts, will be distributed according to the state laws instead of your wishes.
Your state’s laws may not align with what you would have wanted and can make dying intestate problematic. For example, the courts may rule in favor of certain family members, giving them a portion of the estate even if you had a strained or distant relationship with them and were against them receiving anything after your passing.
Dying without a will can also create complications and delays in the probate process. By setting clear instructions, usually in the form of a will or trust, it can speed up how to distribute your assets and settle any outstanding debts or taxes. This can also lead to disputes and disagreements among family members or other potential beneficiaries.
Creating a will or trust is a simple way to ensure your wishes are fulfilled after you die. A will allows you to name an executor to manage your estate, designate heirs for your assets, and name a guardian for your children.
A trust can provide even more control over the distribution of your assets, allowing you to specify when and how they are distributed to your beneficiaries.
Creating a will or trust is a responsible and sentimental way to protect your loved ones. Planning for the future can ensure your assets are distributed according to your wishes, minimize the cost and stress of probate, and provide for your children’s care and well-being.
Issues Surrounding Dying Intestate
As mentioned above, probate is the legal process of administering an estate after you pass away. It involves paying debts and taxes and distributing the remaining assets to beneficiaries. If you die without a will, your assets go through probate, leaving the court to determine how they are distributed based on state law. It is as if the court is guessing how you would have wanted your assets distributed and your affairs settled, which may not be exactly what you would have wanted.
One of the biggest pitfalls of dying without a will is the cost. Legal and court fees can add up quickly and eat into your estate’s assets. Depending on the complexity of your estate, dying without a will can make the probate take longer, lasting months or even years to complete. This process can tie up your assets and delay distribution to your loved ones.
Another issue is the lack of privacy. Probate proceedings are public records, meaning anyone can access information about your assets, debts, and beneficiaries. This lack of privacy can be especially problematic if you have business interests or other sensitive assets you prefer keeping private.
Effect on Children When Dying Intestate
If you have children who are minors, dying without a will or trust can be especially dangerous. Without a designated guardian, the court will determine who will continue to care for your children if you and your spouse pass away. This lack of direction from you and your spouse can lead to custody battles and unnecessary stress for your children during an already challenging time.
When you die intestate, the distribution of assets can become even more complicated when you have underage children. In such cases, the court may appoint a guardian to manage your children’s inheritance until they reach adulthood. The court does not know your wishes, and the person they appoint may not be a person you trust or feel would manage the assets with your children’s best interest at heart.
You Have No Say in Who Raises Your Children
Naming a guardian is a topic every parent should take seriously as it could have grave consequences for their children’s future.
When you do not name a guardian for your children, you leave their fate up to chance. If something happens to you and your spouse, the court must appoint a guardian for your children. The court-guardian may not necessarily be someone you would have chosen and may not align with the values and beliefs you and your spouse have, or the values you wanted your children to be exposed to.
While it may be challenging to think about, it is essential to take time choosing a guardian for your children. Consider someone who is trustworthy, responsible, and shares your values.
A Final Point
Creating a will or trust is an essential part of estate planning, especially if you have underage children. Without a will or trust, your assets may be distributed according to state laws, and you will have no say in who raises your children or manages their inheritance. In addition, probate proceedings can be lengthy, costly, and public, with potential tax implications.
Working with your financial advisor and an experienced estate planning attorney, you can ensure your wishes are fulfilled and provide for your loved ones after your passing.
Disclosure: This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax, or investment advice or an investment recommendation, or as a substitute for legal counsel. Any investment products or services named herein are for illustrative purposes only and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy, or investment product or service. Always consult a qualified professional or your own independent financial professional for personalized advice or investment recommendations tailored to your specific goals, individual situation, and risk tolerance.
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