The Case of No Will
What happens if you don’t create a Will?
Major headaches are inevitable when a person dies without a Will (also known as dying “intestate”). The major issue being that, without a Will, your final wishes are not voiced for the fiduciaries and/or beneficiaries. This lack of instruction then leads to confusion and disagreements among family members and threatens future disharmony. Normally, with a properly drafted Will, there would be a named person to serve as a Personal Representative of your estate, but without a Will, the court will need to rely on statutory law through a formal petition process. This petitioning process then opens the door to an unintended person becoming the Personal Representative of your estate and thereby creating the potential for further chaos. The court will do its best to get the estate settled as fairly as possible, but the timing of when and how things get done can be largely at the discretion of the Personal Representative. The result being that the estate administration could extend years before being completely resolved while racking up legal fees and administrative expenses along the way.
So who will get what?
If you are single with no children, your parents will most likely inherit your estate. If one or both of your parents are deceased and you have no children, then your estate and assets will be divided amongst siblings. If you do have children, if they are underaged, courts will decide on a guardian, but if they are adults, it will also be divided among them. If you’re married when you pass away, in the majority of states, your entire estate will go to the living spouse, however, complications can occur when Wills are not put into place, especially if you have been divorced and remarried, or have children from different partners. A properly drafted Will can clarify who your actual intended beneficiaries are (and of what items/assets things should go to) and dissolve potential ambiguity to avoid unnecessary friction and confusion among your beneficiaries.
What about debt?
When you pass away and have debt, your estate will cover the cost to pay back the debt. For example, if you have no Will and pass away, but have student loans, your debt would be paid first using your estate. Depending on the solvency of your estate and the discretion of the appointed Personal Representative, this could mean various assets (cars, real estate, stocks, and bonds) have to be sold in order to pay back the debt. This can be particularly troubling when you intend for a certain asset (like a house) to pass outright to a specific child, but the Personal Representative decides that rather than selling other assets to pay off the debt, they decide to sell the home. Once again, if you are concerned about the priority of which assets are used to pay off debt, then you can specify those instructions accordingly in your Will. Otherwise, it’s really up to the Personal Representative to decide what stays and what goes prior to distribution of the remaining estate among the beneficiaries.
Want to learn more about setting up your own Will?
Call (781) 202-6368 or email JLento@PerennialTrust.com to schedule your free estate planning meeting.
I am always happy to answer any questions you may have.
Sincerely,
Joseph M. Lento, J.D.
Attorney & Owner of Perennial Estate Planning
Other helpful reading:
Carlson, Darren R. (2014). Your 1960S Tv Guide To Estate Planning. MOTIVATIONAL Press, INC.
If someone dies owing a debt, does the debt go away when they die? Consumer Financial Protection Bureau. (n.d.). https://www.consumerfinance.gov/ask-cfpb/if-someone-dies-owing-a-debt-does-the-debt-go-away-when-they-die-en-1463/.
