Death is a topic most people approach with reluctance, especially in deaths and losses in the family. When we lose a loved one, the impact can hit far and wide, causing pain and grief for years to come. Yet, there are other consequences to death, especially in a legal context. The consequences of dying intestate can strain the family even more.
When we die, our possessions do not follow us, and we have limited control over them. In the past, privileged individuals would be buried with some of their possessions to aid them in the afterlife. But in the present day, an individual’s possessions and property must be redistributed after their passing.
This distribution process happens either according to the state’s intestacy laws within which the deceased person resided or according to their estate plan, ideally drafted and notarized before their death. The latter is recommended to every American because intestate law rarely distributes your assets in a way that best reflects your will and judgment.
However, although estate planning is often quite simple and requires little time or financial input for most estates, only about a third of Americans have an estate plan. There are several reasons why:
- For one, many may not even know the repercussions of not having a plan for their belongings and assume it is a low-priority. Without understanding how dying intestate may affect your family, it is easy to put off creating your estate plan for a long time.
- Second, most people do not wish to dwell on their mortality – the idea that you must prepare your family for your own death can be gruesome and difficult to confront.
- Third, many Americans erroneously believe that estate planning is incredibly complicated or pricey. Estate planning is rough as complex as your estate itself – larger estates with property between different owners and different states require a much more involved planning process. In comparison, smaller estates only require a simple estate plan.
To better understand why a simple will can save your family a lot of trouble down the line, it is crucial to understand what dying intestate entails.
Intestate Succession in California
In California, intestate law determines in what order a person’s belongings are bequeathed onto their family. All property in an estate goes through probate unless the property is:
- In a living trust.
- Designated a beneficiary through a payable-on-death/transfer-on-death clause.
- Owned in joint tenancy with someone else.
- Retirement funds with named beneficiaries.
- Life insurance with named beneficiaries.
After probate, the property is distributed to their next of kin. If married, all community property will pass to the spouse, while separate property is distributed among the next of kin and the surviving spouse. If unmarried, or regarding the separate property, the state distributes it in order of:
If no next of kin remain – which is very unlikely, the state escheats the estate until a rightful owner is found.
Why Dying Intestate Can Cost You
The first thing dying without a will can cost you is the inability to choose how your property is distributed. For example, even if your spouse and spouse are separated, they are entitled to an interest in your community property and separate property unless a divorce has been officially carried out and notarized.
Similarly, you may want your property divided in a certain way, rather than equally distributed among only your next of kin. The probate process for a complicated or large estate without an estate plan is very messy, very long, and often very costly. Probate is best to be avoided for a good reason – it is a great big hassle, often lasting up to a year or longer in the case of more complex estates.
Furthermore, without a will or any form of estate planning, you cannot account for certain medical procedures or emergencies, you leave your family unprepared to deal with creditors or specific assets, and you leave the fate of your minor children to the probate courts rather than specifying who you would want to be appointed as guardian over your children.
The Time Is Now
Another mistake many make regarding estate planning is putting it off until it is far too late. Estate planning is not something strictly of interest to retirees or the rich and famous. Anyone who owns property or owns any assets they may want to pass on to their loved ones eventually should consider a simple and plain estate plan as an insurance policy against the unthinkable and the unlikely.
In fact, some professionals specialize in providing estate planning services to those significantly younger than the average retiree. Even young families can use estate planning techniques to ensure that the people they care most about can continue to take care of their healthcare and financial needs. Estate planning goes beyond ensuring that what you own passes into the right hands, with as little financial and emotional damage as possible.
Estate planning tools allow you to delegate certain financial and healthcare decisions through different documents. One such document, a durable power of attorney, is meant to give your significant other or your parents the ability to make critical decisions regarding your health if you cannot consent or make decisions.
Student loans are also a growing subject in estate planning – understanding where your debt might go if you pass away is critical to helping your family prepare for it if something terrible happens. Federal loans are often pardoned upon death, but private lenders may go after any assets you plan to pass onto the family. Properly preparing can help you protect your assets against creditors.
Estate planning tools are invaluable for protecting your assets and ensuring your loved ones get the time and space they need to grieve properly. Still, they can also be used to provide tax advantages while alive, decide who would best take care of your young children if you pass away, and can give you the peace of mind if anything happens to you that renders you incapacitated but not dead. Hopefully, you now know the importance of wills and understand the consequences of dying intestate.