Dying without a last will causes many complications.
Death is inevitable.
Despite this fact, many people choose to act as if ignoring this fact will somehow alter reality.
This denial can reduce uncomfortable thoughts and emotions for a time, but it is not sustainable and can have negative impacts.
According to a recent The Wall Street Journal article titled “The Confusing Fallout of Dying Without a Will,” one significant issue with avoidance involves dying intestate.
Dying intestate simply means dying without a last will and testament.
Unfortunately, over half of Americans do not have a last will in place.
This means millions of individuals are leaving no legal instructions for the distribution of their assets.
With the Congressional Budget Office estimating the wealth of the average American household to have tripled in the past three decades, the cost to people and their loved ones is high.
In fact, about 20 percent of Americans with assets in excess of $1 million do not have a last will.
Dying without a last will essentially gives the government control of your assets and how they are distributed.
States have different laws governing who can inherit.
In some instances, your loved ones will inherit nothing and may even be evicted or left with a large tax bill.
For example, couples who are unmarried are at greater risk of disinheriting loved ones.
Consider this example of someone dying without a last will.
An unmarried couple set an appointment to meet with an estate planning attorney after living together for 18 years.
Prior to the appointment, the woman died in an accident.
The children of the female partner had to sign off so the male partner could serve as executor of her estate.
Although the couple had discussed sharing ownership of the car and the home, her children inherited half of these assets according to intestacy laws.
As a result, the man had to buy her half from her children to retain possession.
Although this is one example, dying intestate could result differently for someone else, depending on the state of residence.
Some states grant surviving spouses 100 percent of the estate and disinherit the children.
Others allow for the spouse to receive 50 percent and the children to divide the remaining half.
Pennsylvania allows for the surviving parent to inherit half of the estate after an initial $30,000 granted to the spouse if there are no children.
Tennessee allows a surviving spouse who has two or more children to inherit one-third of an estate and split the remainder among the children.
To be able to control who inherits, serves as the executor, and rears minor children as the guardian, a valid last will and testament is required.
In addition to creating a last will, you should also review the names on your beneficiary designations.
Those named on life insurance policies or retirement accounts will inherit directly.
If no one is named, these are paid to the estate and distributed through probate.
Dying without a last will means these assets are also subject to intestate laws for distribution.
To avoid leaving your loved ones to navigate a legal mess when you die, work with an experienced estate planning attorney to create a last will or arrange for your estate to pass via various non-probate transfer strategies.
Reference: The Wall Street Journal (May 2, 2023) “The Confusing Fallout of Dying Without a Will”