There are people out there who apparently assume that your property will magically fall into the hands of your loved ones in precise accordance with your wishes if you don’t have a will or a living trust.
Why would we make this assertion? When you look at surveys that are conducted, the majority of American adults don’t have estate plans in place. Since just about everyone would say that they put their family members first, these folks must be under the impression that the state can somehow read their minds retroactively after they pass away.
In reality, if you don’t have a will, a living trust, or some other type of trust, it is unlikely that your assets would be distributed in a manner that would be consistent with what you really want.
Consequences of Inaction
If there is no will or living trust, and there is no other type of estate planning document, the state would in fact be forced to step in. The probate process would unfold, and the court would take control. A personal representative would be appointed by the state to handle the business of the estate.
This in itself can create difficulties. For example, you may remember the untimely death of the football player Steve McNair that took place in 2009. As a longtime NFL superstar quarterback, he had considerable financial resources.
McNair came from humble beginnings, and it gave him a great deal of pleasure to provide his mother with a dream home. He was tragically murdered by his girlfriend, and his relationship with his wife was apparently rocky. He passed away without a last will or any other estate planning documents, so the court appointed his wife to act as the personal representative.
The home that McNair purchased for his mother was not in her name; it was in his name, so it was part of his estate. His surviving spouse decided to charge his mother rent that she clearly could not afford. She was forced to move from the home that was purchased for her by her son.
This is a compelling example that underscores the negative consequences that can come about if you go through life without a living trust for a last will.
Intestate Succession Laws
If you die without any estate planning documents, the condition of intestacy is the result. There are intestate succession laws that hold sway when someone passes away intestate.
In our state, if you die intestate and you have a spouse and children from that spouse still alive, your spouse would get half of the intestate property, and your children would get the other half. This is a good example with regard to the way that the intestate succession laws may not be consistent with your true wishes.
If you have a perfectly sound relationship, you may want your spouse to inherit everything. He or she could then decide how to distribute his or her estate among the children.
This is just one example, but there are many different circumstances that can exist. In the end, if you don’t have a will or a living trust, people that you love can be shortchanged or disinherited entirely.
There is also the matter of escheat scenarios. In some cases, a person will pass away intestate without any living relatives at all. An individual who is in this position may have long-time friends, and he or she could be passionate about certain causes and institutions. The estate could have been put to good use if there was a will or trust in place. However, when this type of situation arises, the state can ultimately absorb the assets that comprise the estate through escheat laws.
Why Take the Risk?
As estate planning attorneys, we often speak with people who are looking for damage control solutions after loved ones passed away without making the appropriate preparations. This is a source of frustration for us, because it is relatively easy and inexpensive to put an estate plan in place.
We are here to help if you are ready to take action to avoid intestacy. Our firm has been assisting people in the Indianapolis area for many years, and we can gain an understanding of your position and make recommendations to you based on your situation. In the end, you can go forward with an estate plan that protects your family in the ideal manner.
To set up a consultation, give us a call at (317) 684-1100 or send us a message through our contact page.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.