Intestate: How Dying without a Will Creates a Family Legal Nightmare

According to a recent survey, fully half of American adults do not have a will or living trust.  

A will explains how you want your property to be distributed after your passing.  A living trust contains similar information, and can also help your loved ones avoid probate.

What happens if someone passes and never had a will or living trust?  Legally, they have died intestate.

What Does Intestate Mean?
Investopedia defines intestate as “The act of dying without a legal will.  Determining the distribution of the deceased's assets then becomes the responsibility of a probate court.”

In other words, dying without a will means you give the courts the responsibility of deciding who has a right to your estate, and how much each person will receive.  They will appoint an executor (an administrator) for your estate; this executor will need to collect your assets, pay your debts and settle your estate.  The courts would also decide who will become the guardians of your minor children, if their other parent is also deceased or unable to care for them.  

What Is in a Will?

Without a legal will or living trust, you can’t have your wishes known.  Protect yourself, your family and your assets by having the proper legal documents drawn up.  There are many issues to address when creating a last will and testament.  The key points to include are:

  • Assets:     Your will should list your assets, including your home, belongings, bank accounts and investments.  It should also indicate how to divide these assets.  Identify the beneficiaries of your estate and how much they will receive.  For example, you may decide that your surviving spouse is to receive 100 percent of your assets.  Or you may prefer that your assets be divided equally between your spouse and your children.  You may also include other family members, friends and charities.  You may distribute your assets how you best see fit, which is likely different than how the courts would distribute them.
  • Guardianship:     If you have minor children, you may also choose who will take care of them should you and your spouse pass on.  You are the best person to decide who would make the most suitable guardian for your children.  Whether a grand-parent, aunt or family friend, you need to appoint a guardian should something happen to you.
  • Trustees:    If your children are under eighteen years of age (twenty-one in some jurisdictions), you will need to appoint a trustee for their estate.  The trustee’s responsibilities include managing the estate on behalf of the children and ensuring assets are used for their benefit.  Living and educational expenses can be paid out of the children’s estate while they are minors; the balance would then be given to them when they reach a predetermined age.  

Dying Intestate Legal MessThe Legal Nightmare of Intestacy

Dying without a will can create quite the legal mess.  The more complex your situation, the more assets you have, the greater the mess.  

If you die without a will or living trust, your estate defaults to the state law.  Intestacy laws vary from one state to another.  If something should happen to you and no will is in place, your spouse may not necessarily receive all of your estate.  Some laws divide assets between spouse and children, which can be problematic when children are minors and their estates are held in trust.  There is no guarantee who will receive your property unless you specify the details in a will.  

Another problem of intestacy is your estate becomes tied up in the probate process.  A court proceeding must name an administrator, who must then start the work of settling your estate.  This creates a long, complicated and sometimes expensive process.  Assets cannot be accessed by your surviving spouse or dependent children until the estate is settled.  This sometimes creates significant financial difficulties for families.  

A long probate period costs money.  Lawyer bills add up quickly, as do other probate fees.  If relatives disagree on the distribution of your property, lengthy court battles may ensue.  Having a will can avoid unnecessary legal fees and disputes during a time that is already a difficult one.

Everyone needs a legal will (or living trust).  Young adults, parents, singles, retirees; everyone benefits from the peace of mind of having their affairs in order, and their loved ones taken care of if the worst happens.

Related Reading:

7 Common Estate Planning Mistakes to Avoid

Glossary of Estate Planning Terms, from Probate to Power of Attorney

Beginner's Guide to Estate Planning