When someone passes away without a valid will or trust, their estate is distributed according to the laws of intestate succession in your state. Intestacy is the legal default for distributing assets, but it often fails to reflect the deceased’s wishes.
The process can create complications for families, leaving loved ones vulnerable and unprotected.
In this post, we’ll explore what intestacy means, how it impacts your loved ones, and why having an estate plan is essential to avoid these pitfalls.
What Is Intestacy?
Intestacy occurs when an individual dies without a legally binding will or trust. In this situation, the probate court steps in to distribute the person’s assets according to state intestacy laws. Think of it this way: you failed to create a plan, so the state did it for you and assumed it knew how you wanted your assets distributed.
These laws outline a hierarchy of heirs based on familial relationships, such as spouses, children, parents, and siblings.
While the goal of intestacy laws is to provide a default plan, they are rigid and don’t account for individual circumstances. This rigidity can lead to unintended consequences, particularly for families with unique dynamics or non-traditional relationships.
The Impact of Intestacy on Families
Dying intestate can create significant challenges for your loved ones. These issues often include delays, increased costs, and potential disputes among heirs.
Delayed Asset Distributions
Probate is required for intestate estates, and the process can take months or even years. During this time, assets may remain inaccessible to family members who need financial support.
For example, a surviving spouse or children may struggle to cover expenses while waiting for the estate to be settled.
Increased Costs
The probate process involves court fees, legal expenses, and executor fees, which can quickly add up. Without an estate plan to streamline asset distributions, these costs reduce the overall value of the estate.
Exclusion of Certain Loved Ones
Intestacy laws prioritize biological and legally recognized family members, which can leave others unprotected. For example, unmarried partners, stepchildren, or close friends are not entitled to inherit under intestacy laws, no matter how close their relationship with the deceased.
Family Disputes
The lack of clear instructions can lead to disagreements among heirs. Disputes over who should inherit certain assets or how property should be divided can cause lasting rifts in families.
Who Is at Risk of Being Left Out?
Certain individuals are particularly vulnerable when someone dies intestate. These include:
- Unmarried Partners: In most states, unmarried partners have no legal claim to an intestate estate, even if the relationship lasted for decades.
- Stepchildren: Stepchildren are not considered legal heirs unless formally adopted.
- Friends and Caregivers: Intestacy laws do not recognize non-relatives, regardless of the role they played in the deceased’s life.
- Charities and Organizations: If you wish to leave a legacy gift to a charity or organization, intestacy laws will not honor these wishes.
Without a will or trust in place, these individuals and entities receive nothing from your estate, no matter your intentions.
How to Avoid Intestacy
The best way to avoid the complications of intestacy is to create a comprehensive estate plan. An estate plan ensures your assets are distributed according to your wishes and provides a clear roadmap for your loved ones.
Drafting a Will
A will is a foundational estate planning document that outlines how you want your assets distributed. It also allows you to name guardians for minor children and specify your final wishes.
While a will must go through probate, it provides clarity and direction, reducing the risk of disputes.
Creating a Living Trust
A living trust offers additional benefits, including the ability to bypass probate entirely. By transferring ownership of your assets into the trust, you can streamline the distribution process, reduce costs, and maintain privacy for your family.
Updating Beneficiary Designations
Certain assets, such as retirement accounts and life insurance policies, pass directly to designated beneficiaries outside of probate. Keeping these designations up to date ensures your assets go to the intended recipients.
Regular Estate Plan Reviews
Life changes such as marriage, divorce, the birth of a child, or acquiring new assets may require updates to your estate plan. Regular reviews ensure your plan remains aligned with your current circumstances and wishes.
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Since you are here, you must be thinking about the possibility of working with an Oklahoma City estate planning lawyer to develop a plan. You are definitely in the right place, but if you want some affirmation, and over to our testimonials page to get some insight.
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