What happens if you don’t have an estate plan?

What happens if you don’t have an estate plan?

Planning your estate is a way to getting financial and personal affairs in order in case someone dies or becomes ill. Legal documents are needed when planning a last will and testament that will contain instructions to someone’s family as how he or she wishes to have their estate distributed after their death.

One of the most asked questions is, “what will happen to my property if I do not have an estate plan or will before I die? Every state has an legal process in place when it comes to determining who can inherit someone’s estate when they fail to have an estate plan. The legal plan is called “intestacy laws.”

What does it mean when a a person died “intestate?” It means they died without having created a will. In the event this happens intestacy laws of his or her state in which they owned property will decided who will inherit the deceased estate.

Each state has a different law, but the all follow the same pattern. First the deceased spouse or children will receive the estate; if they do not have children or spouse, then their parents will receive the estate; it their parents are also deceased then the estate will got to siblings, if not, then then the estate will go to their nephews or nieces.

Why people have estate plans

There are several reasons why people meet with estate planning attorneys to plan their estates. However, many attorneys will tell you there are 4 top reasons people plan their estates.

  1. To avoid probate: This is the most common reason someone will meet with an attorney. Most people want to avoid probate because of all the horror stories at are known about probates.
  2. Reduce their estate taxes: A significant loss of a person’s estate is payments to federal and state estate taxes as well as inheritance taxes is what motivates people to create an estate plan. With a basic estate plan married people will reduce or increase their estate taxes by creating ABC or AB Trusts, which are parts of revocable living trusts or wills. Moreover, there are several different advanced techniques for planning your estate and can be used by both individuals and married couples to ensure the inheritance or estate tax bills either are completely eliminated or less burdensome.
  3. Avoid Messes: Clients will often seek the advice of a attorney about estate planning after they have seen or or personally experienced, a loved one or an associate experience, a waste of time and money because the they did not have estate plans. Selecting a loved to be in charge after your death or in the event you become incapacitated and choosing who will receive what, how and when will increase costly probate court proceedings as well as avoiding family conflicts.
  4. Beneficiaries protection: There are 2 main reasons why individuals will create estate plans and that is to protect his or her beneficiaries. A). Protecting beneficiaries who are minors and B). Protecting beneficiaries who are adults from making bad decisions, creditor issues, outside influences, and divorcing spouses. All 50 states require minor beneficiaries to have a conservator or guardian to oversee the minor’s needs and finances until the minor is a legal adult.