There is a common myth that if you die without a Last Will & Testament, or another estate planning device, that the government will take all your assets. With the exception of rare circumstances, the government does not simply gain a decedent’s assets. Rather, each state has devised its own set of rules that govern where your property will go.
Dying “Intestate”: The Goods News
When someone passes away without a Last Will & Testament, it is said that they die “intestate”. In comparison, a person who dies with a Will is said to have passed away “testate”. In sum, each state has enacted it’s own “intestacy” laws that provide what happens to a person’s property when they die without a Will or other estate plan.
An example of an intestacy law is New York’s EPTL 4-1.1, which provides that if the decedent dies intestate with a spouse and no children, the spouse inherits everything. In the alternative, if there were a surviving spouse and children, the spouse inherits the first $50,000 plus half the balance of the estate assets and the children inherit everything else. In sum, the statue provides different rules for different situations.
Dying “Intestate”: The Bad News
Some may say that the intestacy laws seem to work well for their situation. What if I just have a wife and I want everything to go to her anyway? For a few this might be fine but ordinarily individuals are mistaken and unaware of some of the repercussions of dying intestate.
First, there are potential state and federal tax issues when a person with significant wealth does not properly plan their estate. Similarly, there is limited protection from any possible creditors who may try to make a claim against your assets once they are disclosed in the probate court process.
Second, there is a lack of privacy for anything admitted to probate including a will. However, in many instances a properly constructed “pour over will” and trust can keep your assets out of probate and the public eye. Pour over wills and trusts will be the topic of an another article.
Third, the cost and amount of time spent during the probate process can be exhausting. In most states, there are various fees associated with the admission of intestate or testate estates to the probate court. Further, the role of the court appointed administrator of an intestate estate or an executor of a testate estate oftentimes becomes time consuming, complex and frustrating depending on the amount and nature of the estate property as well as the decedent’s family.
Fourth, in most instances the decedent would like to control where their money and other personal or real property goes and when. Even if you express during your lifetime how you would like your property distributed, it will have no effect because the statements were not made in writing and in conformity with the law. For instance, if a father tells his daughter “I want you to have this antique cabinet” and there was a room full of witnesses, the law still controls where that antique will go.
Lastly, and the most common concern, is that a distant family member comes out of the woodworks in an attempt to stake their claim. Sometimes the law is on their side and the intestacy scheme directs money to an estranged brother, sister etc. Other times, the law is not on their side yet the estate may have to be defended in court, which can cause further costs and complications.
What Can Be Done?
Fortunately, there are several simple ways to make life easier for surviving family members when you pass on. The lawyers at Wiley Etter, LLC are here to assist in the utilization of varying legal devices to ensure that each client can rest easy knowing that their estate and ultimately their loved ones are taken care of now and down the road.
Call us today! (203) 301-8722
Jerome L DiMenna III, Esq.
Wiley Etter, LLC
August 24, 2018