Compass

What Happens if you Die Without A Will?

Although most individuals want to provide for their families after they pass, some estimates show that over half the U.S. population still lacks even basic Wills. This trend is heading in the wrong direction, so the question remains- can advisors help?

 

 

When an individual dies “intestate,” or without a Will, assets
that do not pass by a beneficiary designation or based on survivorship or
similar rights, are distributed according to state intestacy laws. These
statutes vary by state, and individuals are often surprised to learn that they
do not dispose of an individual’s assets as expected. Moreover, intestacy
laws do not consider the impact of federal and state estate taxes or
incorporate any asset management or creditor protection planning.

When an individual dies “intestate,” or without a Will, assets that do not pass by a beneficiary designation or based on survivorship or similar rights, are distributed according to state intestacy laws. These statutes vary by state, and individuals are often surprised to learn that they do not dispose of an individual’s assets as expected. Moreover, intestacy laws do not consider the impact of federal and state estate taxes or incorporate any asset management or creditor protection planning.

Having a properly executed legacy plan (a Will, or Will and revocable living trust) is the best way to ensure that estate assets pass to the intended beneficiaries in the desired manner. Planning is particularly critical for blended families, as state laws may leave more or less than desired to a surviving spouse or children from a prior marriage.

Only with a legacy plan can individuals manage their estate tax liability, ensure distribution of specific assets to certain beneficiaries, and provide for creditor protection, long-­term planning, and professional asset management for their beneficiaries.

 Intestacy in Action: A Cautionary Tale