Everyone should have a thorough estate plan that includes a will and trust. It will avoid built-in conflict that can cause hard feelings and expensive legal battles.
It is also important to list your assets and keep beneficiary designations up-to-date. If an individual passes away without a will, the distribution of their assets will be determined by the laws of their state.
Meet with an Attorney
Intestate succession refers to distributing deceased people’s property when they die without a valid will. In other words, it determines who inherits the assets of someone who passed away without specifying their wishes in a legal document. Many people need to be aware that there are options for estate planning when someone dies without a will. The process varies by state but typically starts with determining how much their estate is worth. It includes working out debts (including funeral costs) and identifying all assets.
Next, determining who their heirs are is important. It can be a complex task as family relationships can become estranged over the years. This is especially true with distant relatives. The estate usually transfers to the surviving spouse, followed by their children and grandchildren in case of their absence.
Make a List of Your Assets
While it may be uncomfortable to discuss, determining your estate plan requires a clear understanding of the assets that you will pass along. This will help you identify how to avoid probate, a process that can be time-consuming and costly.
It will also allow you to decide which executor to select. It is important to choose someone you trust, as they will be responsible for carrying out the stipulations of your will. A poor choice can lead to family conflict and squandering of funds. In addition, you will need to make a list of any outstanding debts.
Create a Will or Trust
Many assets do not need to go through probate, such as property held jointly with someone else, life insurance policies, and IRA or 401(k) retirement accounts. But those that do need to be subjected to the state’s intestate succession laws.
Making a will allows you to name an executor, choose heirs for your estate, establish guardianships, and express your intentions on various matters. It also helps your survivors avoid pricey probate fees. A trust may also be a better option for protecting your assets from lawsuits or creditors.
Create a Power of Attorney
The POA allows you to choose someone, known as an agent, to make financial, medical, and other important decisions on your behalf if you become incapacitated. Discussing the different types of POAs with an estate planning attorney is important.
If a person dies without a will, the court will use local “intestate succession” laws to determine who receives their assets. These laws typically give priority to the surviving spouse, followed by children. After that, parents and siblings get their share.
Create a Health Care Power of Attorney
A healthcare power of attorney is a legal document that grants someone the authority to make medical decisions on behalf of an individual who cannot do so. The individual giving this authority is called the principal, and the person receiving it is called the agent. The agent may be a friend, spouse, or family member.
If someone passes away without a will, their estate must be settled through probate court, often resulting in disputes among the heirs.
However, this is easier than it sounds, especially when many assets don’t need to go through probate, such as accounts with a beneficiary designation or jointly owned property. It makes the process much smoother for everyone involved.
Create a Living Will
Creating a living will is the best way to fulfill your wishes after death. Several companies online offer packages and guides to help you make a living, but it is important to understand your state’s specific guidelines.
For example, some states require that two witnesses sign living wills. Also, be sure to store your living will in a safe place where family members are aware of its location and existence. They may need to access it in a time of crisis.
Create a Health Care Directive
A health care directive (a living will or advance directive) is an important part of your estate plan. If you cannot make medical decisions, you can assign someone.
The document also outlines your wishes for end-of-life care and other medical treatment preferences. It should be reviewed periodically to ensure that it still reflects your wishes. Some states offer registries for quick access by health care providers and your proxy.
Create a Durable Power of Attorney
The state’s inheritance laws dictate who gets their property if someone dies without a will. In gene al, a surviving spouse inherits first, then children. Parents and siblings are next in line if no children can be found.
Many people choose backup beneficiaries for their assets, especially those requiring a legal transfer process, such as life insurance policies and retirement accounts. Discussing your estate planning options with a knowledgeable professional is important.
Create a Health Care Power of Attorney Designation
Many assets, such as property in a trust, those owned jointly with a spouse, or designated beneficiaries in life insurance or financial accounts like an IRA or 401(k), bypass probate altogether and go directly to the heir. The int Stacy process is different for those assets.
Local intestate succession laws will determine who receives their estate if a person dies without a will. The rules prioritize surviving spouses or domestic partners and children, followed by parents, siblings, and extended family members. Heirs may also dispute a decision and need to go to court.
Create a Living Will Designation
When a person dies without a will, the state laws decide who inherits their assets. The priority for inheritance usually goes to the spouse or domestic partner, followed by children, parents, and siblings.
But this gets fuzzier when there are children from previous relationships and estranged family members. Luckily, some assets, like bank accounts and retirement accounts named beneficiaries, will pass to those individuals immediately, bypassing probate. This will avoid family fighting and unnecessary stress.
