A will ensures that your personal and financial assets are given to the people and organizations you want. It also lets you choose the person you want to settle your affairs with, your executor. The time to prepare a will is typically the same time people have a power of attorney and healthcare proxy forms prepared, according to the article “What Happens if You Die Without a Will?” from The Street.
Your estate plan is the term used to describe having all of these and other tools prepared to work together. It has nothing to do with the size of your estate, which could be modest or significant. Regardless of your life’s financial size or complexity, you need a will.
What happens without a will?
A married person with children who dies without a will does the family a great disservice. All property, including real estate, investments, and accounts jointly owned with the spouse, go to the co-owner without going through probate. However, separately owned property and accounts are distributed by the state in the absence of a will. Depending on the state, one-third may be awarded to the surviving spouse, and the remainder may be divided among the children. If the children are minors, the funds will be held in an account only accessible with court approval. The family may find itself without sufficient funds to maintain its lifestyle.
A person who is married but has no children or grandchildren and dies without a will may have their entire estate given to the surviving spouse. However, some states have a cap of $100,000. Other states give a third to one-half of assets to the surviving spouse and the rest to the deceased’s parents if they are living or to the siblings. Jointly owned property, accounts, and community property go to the surviving spouse.
What about a single person with children? With no will, the state law gives the decedent’s assets to surviving children in equal shares. If an adult child dies, their share is split among their children (the decedent’s grandchildren). However, the money is subject to court control and supervision if the children are minors.
If someone single with no children dies, the state usually gives their assets to surviving parents. If the parents are not living, the assets will be distributed to the decedent’s siblings, nephews, and nieces if the siblings have also passed. The state will reference a consanguinity chart—a chart used to help identify people’s relationships showing degrees of family relationships by blood or marriage. Assets may pass to distant cousins who have never met or even known of the existence of the decedent.
The estate typically goes to the state if there are no living family members.
When a member of an unmarried couple dies without a will, the surviving partner has no legal rights at all. Only spouses and relatives are recognized by state law. The partner will not inherit anything; assets will pass as if the person was single.
Domestic partners are treated differently in different states. In some states, they have inheritance rights, but this is state-dependent.
An experienced estate planning attorney can create a will and related documents to ensure your wishes are fulfilled upon your death. Otherwise, your estate will be distributed according to the laws of your state. You can protect yourself and your loved ones with a will.
Reference: The Street (Jan. 2, 2023) “What Happens if You Die Without a Will?”