If you are one of the millions of Americans who has failed to create an estate plan, you are officially signed up for the government estate plan. When you fail to execute as much as a Last Will and Testament or Living Trust prior to your death, your estate will be handled according to the government’s rules and laws since you are considered to have died intestate. So how does the government estate plan work?
For starters, except for the most modest estates, it is likely that everything you own may have to go through the expensive, time consuming and public probate process before any of it is available for your heirs to use. For example, if your home is titled in your name, it will be officially part of the probate process as will bank accounts, vehicles and other personal items titled in your name.
Once part of the probate process, the state laws of intestacy will determine who receives your estate assets. If you wanted your spouse to get everything, that may not happen under your state’s intestacy laws. If you were not legally married at the time of your death, a life partner may actually end up with nothing. If your estate was modest to begin with, the legal costs associated with probate could diminish it significantly.
The probate court may also determine who becomes the guardian of your minor children if you failed to leave behind a Last Will and Testament and you were not legally married at the time of your death.
To avoid being part of the government’s estate plan, take the time to create your own.
The bottom line is that the government’s estate plan could be far removed from what you actually wanted to happen to your estate so now is the time to create an estate plan of your own design.
The best place to start is with a meeting with an experienced and qualified estate planning attorney. Resist the urge to try to save a few bucks by employing some self help tools such as a will or trust created via a CD or Internet web site. There is no way that these cut-rate, one size fits all, plans can create a truly effective plan for you and your loved ones.