We are often asked, “What happens if I die without a will?”
The answer is simple: You leave behind a mess for your family – one that will be managed by strangers through the court system. Leaving clear directions upon your death isn’t just a way to exercise control over your assets and important matters; it’s an act of thoughtfulness for your loved ones.
Wills are one of several key estate planning documents that you must have to help avoid a mess and possibly a nightmare for those you care about most. A will sets forth your wishes for the distribution and oversight of your assets after you die. And it can address important personal issues such as who will care for dependents. Your will is integral to the other documents prepared for your estate plan.
Unfortunately, more than 55% of American adults do not have a will or other estate plan in place, according to LexisNexis. Many people erroneously believe that estate plans are not necessary unless you have great wealth. Still others are simply squeamish about preparing for their eventual death. Procrastinating about your will, of course, makes it more likely that you will die without one.
When you die intestate (without leaving a valid will), you lose the power to dictate how your assets will be distributed. In such cases, your state of residence steps in to determine asset distribution and adjudicate other personal matters. Local courts – usually the probate or family court – appoint executors to take stock of your assets and debts and to appoint a guardian for minor children.
Needless to say, the decisions that the executor makes may be contrary to your wishes. For example, if you were to die leaving a spouse but no children behind, you might find half your assets paid to your parents and the remainder to your surviving spouse.
What’s more, the absence of a will can make the administration of your estate take longer, cost more, and be more burdensome for heirs. Dying intestate also gives the probate court jurisdiction over disputes that might arise among your family and others regarding your estate.
The process of resolving these disputes commonly lasts for months or even years, and legal expenses combined with probate court fees can make it incredibly expensive. In addition, probate proceedings are considered to be a matter of public record. And in the Internet age, that can make your affairs a spectacle for all to see.
A will is just one component of an effective estate plan, of course. Based on your situation, other components may include a living will, healthcare powers of attorney, financial powers of attorney, powers of appointment and various trust instruments.
Whenever you die, it will be hard on your family. But failing to leave behind an estate plan including a valid will can make it even worse. An essential part of successfully managing your wealth is preparing and maintaining a well-conceived estate plan. If you would like help developing or reviewing your estate plan, we may be able to help. At Intelligent Capitalworks, that’s just part of what we do.