When estate planning, many hesitate to draft a will, relying on common beliefs about asset distribution after death. Understanding what actually happens to your assets if you pass away without a will can help you make informed decisions when estate planning.
1. The state seizes all assets.
Many people mistakenly believe that if you die without a will, the government takes all your assets. In reality, each state follows intestacy laws that dictate the distribution of property of individuals who pass away without a will.
For instance, in California, the personal representative of a deceased individual who did not have a will shall distribute assets to the latter’s next of kin, starting with the surviving spouse and children and then to other family members if there is no spouse or children.
2. The surviving spouse receives everything.
While the surviving spouse of a deceased individual does inherit a significant portion of the assets under intestacy laws, it does not necessarily mean they inherit everything. The exact distribution depends on a variety of factors, including the presence of children, grandchildren or other close relatives, as well as the specific laws of the state where the deceased resided.
3. All assets will go through probate.
Not all a deceased individual’s assets go through probate just because they did not have a will. Some assets, such as life insurance policies, retirement accounts with designated beneficiaries and jointly held property, often transfer to the named person without being subject to intestacy laws.
Feeling secure with or without a will
Even without a will, you can still expect your assets to be distributed systematically through your state’s intestacy laws. However, a downside to this is that the distribution may not align with your wishes and preferences. A will allows you to specify your exact wishes regarding asset distribution, guardianship of minor children and other personal matters.
If you are deciding whether to include a will in your estate plan, seeking the guidance of a knowledgeable estate planning attorney can help you make a clear and confident decision.