Intestacy
What is intestacy?
You have died “intestate” if you die without a valid will. Each state has adopted intestate succession laws that provide for distribution of your property to the people the state considers your heirs.
Why people die intestate
Believe it or not, close to 40 percent of Americans die intestate. Why? The reasons include:
Procrastination
People put off making out their will. No one plans to die. There is always tomorrow, right? Well, you may be wrong.
Fear
Of course, no one likes to contemplate his or her own death. Some people don’t want to think about it or discuss it with their loved ones, so they don’t.
Ignorance
Most people believe that their property will automatically pass to their spouse. Under most intestacy laws, this is not true. Often, people just aren’t aware of the intestacy laws in their state and how they may affect their family.
Indifference
Then there are those who just don’t care what happens once they’re gone.
Why should you avoid intestacy?
You can’t decide who gets your property
State intestacy laws will determine who receives your property. These laws divide up your property among your heirs, and if you have no heirs, the state itself will claim your property. Unlike beneficiaries under your will who can be anyone to whom you wish to leave property, heirs are defined as your legal spouse and specific relatives – and no one else. These laws do not take your relationship with your family into account when dividing up your estate.
Special needs are not met
State intestacy laws are inflexible. They do not consider special needs of your heirs. For example, minor children will receive their share with no strings attached, whether they are competent to manage it or not. Or, a healthy brother will receive the same as one who has a physical or mental disability.
Heirs may be shortchanged
The predetermined distribution pattern set out by state law can end up giving a larger portion of your estate to an heir than you intended for he or she to have. It may also leave one of your heirs with too little.
You can’t decide who administers your estate
If you die intestate, the probate court will name an administrator to manage your estate. You will have no say in who settles your estate.
You have no say in who becomes a guardian for your minor children
A court will appoint personal and property guardians for your minor children. Because you didn’t specify otherwise, the court may appoint someone you don’t like or you don’t want to take care of your children.
Tax planning options are eliminated
Without a will or some other means of disposing of your property, you can’t plan to minimize or provide payment of income or estate taxes.
Can bring about family fights
Who gets Grandma’s jewelry? Or what about that stamp collection that you began 30 years ago? Distribution by intestacy law provides no answers to specific questions like these. If these questions cannot be resolved peaceably, lawsuits may result or the property in question may end up being sold and the proceeds distributed to the squabbling family.