There are studies done periodically that are designed to shed light on the estate planning preparedness of people around the United States. Unfortunately, the results of these surveys are not encouraging. Most of the adults in the United States do not have a comprehensive plan in place.
They say that the only certainties in life are death and taxes. Yet, most people are not prepared for something that is definitely going to happen.
What would the outcome be if you passed away without a will or a trust? Under these circumstances, the condition of intestacy would result. When you die intestate, your probate property is distributed using intestate succession laws.
Property That Passes Outside of Probate
If you have a life insurance policy, the beneficiary would inherit the proceeds and probate will likely not be a factor assuming you carefully named the beneficiaries. If you have property held in joint tenancy, the joint tenant would assume ownership of the entirety of the property after you pass away. However, there are significant potential problems that can arise when a joint tenancy designation is use.
Some people have payable on death accounts. These accounts can be opened at banks and at some brokerages. When you have a payable on death account, you name a beneficiary. Even if you do not have a will or trust, the beneficiary would assume ownership of the assets in the account after your death. The probate process would likely not be a factor. However, POD accounts don’t address the problems relating to an account holder’s incapacity and may be inappropriate if the beneficiary is young, disabled or has financial or other problems.
Distribution of Probate Property
Probate property would be property that you have in your sole and direct possession at the time of your death. If you die without a last will or trust in the state of California, your children would inherit everything under intestate succession laws if you had no surviving spouse, parents or siblings still living.
If you had a surviving spouse but no children, parents, or siblings, your spouse would inherit everything that is community property, but only half of your separate property. Your parents would inherit the entirety of your probate estate if you had no children or other descendants and no surviving spouse.
If you had a surviving spouse and children, your spouse would inherit all of the community property, and either one half or two thirds of your separate property. Your children would inherit the remainder.
These are just a handful of the multiple possible intestate succession scenarios.
There are those who pass away intestate without any surviving relatives that all. Under these circumstances, the assets that comprise the estate are typically absorbed by the state under escheat laws.
Call for an Estate Planning Consultation
Estate planning is a must for all responsible adults. If you take relatively simple steps, you can be certain that your assets are transferred in accordance with your wishes after you pass away. You can also account for possible incapacity late in your life.
If you would like to discuss estate planning with an experienced and qualified estate planning attorney, our firm can help. Simply call our office.