Wills are an essential part of estate planning, no matter how many assets the individual has to give away once they die. When a large estate exists, figuring out what happens with the assets in the event there is no will can be a complex nightmare. Without a will, assets can be tied up for years while heirs work with the court system to try and figure out who inherits what from the estate.
Settling an Estate that Doesn’t Have a Will
There are a number of problems right away when trying to settle an estate that doesn’t include a will. Determining who is in charge of settling the estate will be the first step. In addition, there are a number of assets that may not be distributed through a will especially if there is a trust. Where a trust exists, the trust may be the owner of the assets at death, and not a human being. If the person dies with certain assets, it will be necessary to look through the personal documents, including beneficiary designation forms, bank or other financial account agreements, of the deceased individual to determine beneficiaries, or joint owners on any accounts. Typical assets that may not get distributed through a will include:
- Proceeds from life insurance policies
- Jointly held bank accounts, community property, and real estate owned by two or more people together passing by right of survivorship
- Any property that is already being held in a revocable living trust
- Retirement accounts that have a named beneficiary other than an estate
- Stocks that are held and transferable on death to a beneficiary
- Any property that is already assigned to be transferred upon death of the current owner
- stocks or other securities held in a transfer-on-death (TOD) account, and
- real estate or vehicles held with a transfer-on-death (TOD) deed or title document.
Intestate Succession Laws Vary by State
Intestate succession laws determine who is entitled to an estate when an individual dies without a will in place. Subject to jurisdiction, children or a spouse may be the first person to inherit. If there is no spouse, subject to jurisdiction, a registered domestic partner may be in line before or after children next. If no spouse.
Distant relatives or cousins may inherit if the person dies without a spouse, children, siblings or parents. This can get very complicated fast. Nieces, nephews and cousins may be considered heirs if there aren’t relatives identified who are more closely related. Dying without a will, may expose one’s estate to risks never comprehended. While an individual may want their estate to go to charity, it won’t unless this is clearly documented in a will.
When one has a sizeable estate, it is often wise to create a will. The cost of prudent estate planning is often less than litigation which may follow when heirs and beneficiaries end up in a dispute that could have been avoided. Attorney Ilam Smith of Smith Law Office is here to help clients with a variety of legal matters, including trust and estate litigation. Contact the office at 502-661-3434 or click here to learn more.