Estate planning must haves

Estate Plan

Have you ever wondered what happens without an estate plan when someone dies? An estate plan will allow you to determine who inherits your estate and puts you in control of determining what happens to your assets when you die. If you are settling a deceased family member’s estate, you likely have a few questions about how things will and should be settled and distributed.

Some Assets are Determined Differently

Even without an estate plan, there are a number of assets that are distributed using their own set of rules:

  • Life insurance
  • IRAs
  • Retirement funds or 401ks
  • Securities, real estate, vehicles, and stocks held in transfer-on-death accounts or titles/deeds
  • stocks
  • Bank accounts
  • Real estate
  • Property in a living trust

These assets are distributed according to beneficiary designations or co-ownership. If such assets do not have a beneficiary named, you will need to consult intestate succession rules.

The Executor

Without an estate plan that includes a will or other provisions, state law determines who may be eligible to fill the role of the executor who will oversee estate administration. If a probate court proceeding is held, the court may choose an executor based on a prioritized list. The first choice in many states is the surviving spouse or registered domestic partner. Adult children are usually next on the list, followed by other family members.

Intestate Succession Terms

Intestate succession can be a little confusing because of the terminology involved. You may think you know what words like “children” and “issue” mean, but legally, these terms are a little different than you might assume. Knowing some of the definitions is helpful when faced with a lack of a will for a deceased person’s estate.

Spouse: To be considered a surviving spouse, the couple must have been legally married at the time of the death of the deceased. If a couple had been legally separated or amid divorce proceedings, a judge may need to rule on whether the spouse will be legally considered to be the surviving spouse. Common-law marriages are men and women who are married in the eyes of the law, even though they have not yet pursued married status. States that will consider common-law marriages have specific circumstances under which it will recognize a common-law marriage. Additionally, same-sex marriages may be complicated if one spouse dies in a state that doesn’t recognize such marriages legally. A court may need to be involved in such a scenario.

Children and Issue: Several state statutes use the term “issue” to describe various direct descendants of a deceased individual instead of using the word children, though the terms “child” and “children” are also frequently used. Legally adopted children will generally be eligible to inherit when there is no will. Stepchildren and foster children, on the other hand, will not be generally eligible to inherit without a will. If the deceased person had a biological child who was adopted by an unrelated adult or family, such a child would not be eligible to inherit. Children adopted by a stepparent may inherit, depending on the state. Children born outside of a marriage may inherit if the child was not adopted by someone else, but additional proof may be required.

Siblings: If the state law provides for siblings to inherit, this group would generally include half-siblings and adopted half-siblings, though this also varies in some states.

If you want to avoid an automatic inheritance and would like to ensure that your assets are distributed according to your specifications, contact the Meurer & Potter Law Office in Denver. Without an estate plan, just remember that you could leave behind a very tangled and even contentious situation for your loved ones.

Rules of Intestate Succession

Every state has laws that direct what occurs when a person dies without a valid will and the property was not left using an alternate means such as a living will. Usually, spouses, registered domestic partners, and blood relatives are eligible to inherit under state laws. Friends, unregistered partners, and charities get nothing. If the deceased person was married, the spouse receives more than others.

Basically, if there is no will or some type of trust set up, the spouse will receive everything if there are no surviving children. Distant relatives can inherit only if there are no surviving spouses and no surviving children. In the rare event that no relatives can be located, the state becomes the owner of the assets. Additionally, some people are unable to inherit, even if they are surviving relatives. For example, in many states, a parent who abandoned a child cannot inherit from the child and a person who is criminally responsible for the death of a person cannot inherit from them.

Death of an Heir

Without an estate plan, an heir who has died clearly doesn’t inherit, but their offspring may be eligible to inherit what their parent would have inherited. Some states have laws about the amount of time the heir must have lived passed the deceased (sometimes it is listed as 120 hours, which is 5 days). These are called survivorship requirements. Some states only need the heir person to have lived longer (even if only a second) than the deceased.

The descendants of heirs may inherit their parent’s share, as though they were the parent, in some states. These are called intestacy laws. The children, or sometimes even grandchildren, take the place of the parent in such inheritance situations.

Minor Children

If the deceased was the parent of a minor and there is no will that names a legal guardian, the court will appoint a guardian. Various circumstances are taken into consideration such as the family’s situation, the deceased parent’s possible wishes, and the child or children’s wishes. The main consideration is that the decision is in the best interests of the child or children.

Now that you know what happens without an estate plan, contact us here at the Meurer & Potter Law Office in Denver to get an estate plan in place for your assets.