Most people know that they should draft a last will and testament. Unfortunately, this is one of those things that is easy to keep on the back burner for years at a time. Nobody likes to consider your mortality but having a will drafted is one item on the to-do list that should be done sooner than later.
Anyone who passes away without a will is likely to leave a large number of questions for their loved ones. Additionally, you leave no official documentation of what you wish to be done with your property.
How intestate laws affect property
Should you die without a will it means that you died “intestate”. Dying intestate means that the state will decide what is done with your property. Intestate laws determine who receives what based on whether or not you were married or single, and if you had any children.
It is important to know that not all assets are affected by intestate laws. In most cases only things that you own in your name will be divvied out through this process. A few things that would not go through your will and are therefore not affected by intestate include:
- Jointly owned property
- Payable-on-death bank accounts
- Retirement accounts
- Property in living trusts
- Life insurance policies
These would all go to the named beneficiary or the other individual named as owner.
Property that would be decided by the will – property that state laws will not determine the owner of – includes:
- Real property
- Sums of cash
- Checking and savings accounts
- Business ownership
- Intellectual property
This is by no means a comprehensive list, though it should give a broad idea of what you will not have direct control over.
Who gets what when a person dies intestate?
As mentioned above, marital status and children are the cornerstones of how property will be distributed should you die intestate. Each situation is slightly different, but this is a broad overview of how things are likely to be divided:
- You have children and no spouse – your children divide everything among themselves
- You have a spouse but no children – your spouse receives everything
- You have a spouse and children – your spouse receives your share of the community property for the remainder of their life; your children receive your separate property as well as your community property when your spouse passes away
It is natural to want to control where your property goes after you pass away. Whether it is a matter of wanting a firm hand in your own business or wanting to pass an heirloom to a specific family member, there is a certain peace of mind that comes with handling your own affairs.
Creating a will is usually a straight forward process that can be done in less than a day in many cases. Don’t let this to-do list item shuffle around on the back turner, make your plan and quell any questions your family may be left with.