Dying without a will or trust is called dying “intestate;” and, the intestacy laws of your state of residence, at your death, will determine who inherits from you and in what percentages. If you die with a well constructed and comprehensive will or trust plan, you get to decide who benefits from your estate. Typically, state intestacy laws don’t match decedents’ wishes.
Furthermore, if you die with assets in more than one state, especially real estate, your assets would be subject to two (or more) sets of intestacy laws; so, you could actually have two different sets of beneficiaries. This also means that you would have probate in two or more states, mandating two or more probate attorneys, two or more courts, two or more sets of probate fees, and the like.
In addition, if you die without a will or trust, you haven’t appointed a personal representative (i.e. executor) or successor trustee to settle your estate. As a result, the probate court must step in and appoint a personal representative (called an “administrator”) to wind down your financial life. This person has access to your personal and financial information. If you want to choose who has this confidential access, you need to name a personal representative in your will or successor trustee in your trust.
Wills are also used by the parents of minor children to nominate guardians. Both guardians of the child and of the assets left for the benefit of the child must be named. In a trust-based plan, you can name a trustee to manage assets for a young person’s inheritance. If you don’t, the court will. If you’re like most parents and you’d like to be the one to choose who raises your child, if you can’t; you need a will or trust.
If intestacy laws determine that your minor child is a beneficiary, and they will, your child cannot legally inherit. The court will appoint a guardian to be in charge of the assets until your child attains the age of 18. This requires court reporting and associated court and legal fees which eat away at your child’s inheritance. Plus, you may not want your 18 year old to inherit outright, without any protections.
Dying, without a will or trust, costs a lot of money and is a total loss of control. If you have not executed a will or trust, consult with a qualified and experienced estate planning attorney to determine whether a will or trust is the best solution for you.