If you pass away without a will or other written plan in place, no one has the legal authority to sign the paperwork required to sell a home or other real estate, close accounts, and otherwise manage your assets. In order to get that authority they need to go to court to get it, it is known as the probate process.
When someone dies without a will, it’s known as dying 'intestate.' In such cases, state laws, called intestacy laws, determine who gets put in charge of your affairs and how your estate is distributed. Here’s 5 things you need to know:
1. The Court Will Decide Who Gets Appointed to Manage Your Affairs
The probate court judge will decide who gets appointed to manage your affairs – this person is known as the personal representative or executor - and it may or may not be who you would have wanted. In most instances, this will be a family member as they have preference under state statute. However, if there are disagreements or there are unique assets or other issues, the probate court may decide to bring in an unrelated party. And even if it is a family member, again, it may not be who you would have wanted.
2. The Court Will Decide Who Inherits Everything
The probate court judge will determine who inherits everything based on state law. And again, this may not be who or even how you would have wanted to receive everything. If you’re married, your spouse might receive a significant portion of your estate. If you have children, they may also receive a share. If you’re unmarried with no children, your estate could go to other family members like parents or siblings. Again, the court will decide based on state law.
3. The Judge Will Decide Who the Guardians Are for Your Kids
If you have minor children, the court will determine who the guardians are and your kids will most likely inherit everything outright at the age of 18. This may not align with what you would have wanted. I also have a file full of stories of children inheriting outright and it isn’t pretty.
4. You Will Have No Say In Your Legacy
You have no say in charitable donations, gifts to friends, or specific bequests. Your wishes for your legacy won’t be considered because everything will be distributed based on state law.
5. There is a Higher Chance of Family Disputes
Without your wishes clearly outlined, there’s a higher chance of disputes among family members. This can be emotionally and financially draining.
The bottom line is that not having a will means you lose control over how your estate is handled and distributed.
However, by taking the time to create a will, you get to decide who is in charge, to whom everything goes and any protections or restrictions you would like to put on the transfer of those assets.
A Will Does Not Avoid Probate
This is important, if you have a will, your family will still need to go through probate. In fact, the biggest misconception I see in the general public about estate planning is they assume that if they have a will, they do not need to go through probate. Not true; a will does not avoid probate.
Rather, You should think of your will as a set of written instructions to the probate court judge. So your family will still need to go through probate. However, you get to decide ahead of time, who is in charge, where it goes and how it gets there. Those are huge advantages over doing nothing and letting the court make all of those decisions for you and your family based on state law.
If you would like to avoid probate, and most of my clients do in order to make things faster, often cheaper, and to keep their affairs private, then you may want to consider using a trust. If you would like to get a will or trust in place, call us today to schedule a consultation at either our Florida office at (941) 909-4644 or our Minnetonka, Minnesota office at (763) 420-5087, or fill out the contact form on this page and a member of our team will reach out to you to schedule.
If you are not yet ready to schedule, and would like more information, join me on my upcoming masterclass.
I am hosting an online masterclass where I reveal strategies for your will, trust, financial powers of attorney and health care documents as well as strategies for minimizing or even avoiding estate taxes and how to protect the money you leave for your kids in the event they get divorced, get sued, have poor money management skills or something unforeseen happens in their lives. The class is free and you can register by clicking the link below.
