A common question that I receive is “What happens to my property after I die?” The answer depends on what kind of planning you have done during your lifetime.
Without creating a will or a trust, your property will be subject to intestate succession laws upon your death.
Intestate laws are the rules of how assets will be divided when there is no legal document detailing an individual’s wishes.
Passed to Surviving Heirs
These laws slightly differ from state to state, but generally property is given to surviving heirs such as spouses, children, parents, siblings, etc.
Intestate succession laws do not account for the deceased’s individualized type of relationships but rather follow a general pattern of asset distribution based on closeness of kin.
This is a major drawback of not having a will/trust if you want to designate assets to non-family members.
Property given to the state
In rare cases where no relatives can be located, even very distant ones, property will be given to the state in which you live.
Although intestate laws aim to keep property within a family chain, which may seem adequate, because it involves significant court intervention it makes the process very lengthy and time-consuming.
Also, heirs are often required to spend tremendous effort and money to settle disputes in court which can cause straining family tension.
Planning with a Will or a Trust
If you do have a will or a trust, then your wishes will be followed as it comes to your personal property.
However, the two estate documents are not entirely the same. Both documents make designations of who will receive your assets, and both can keep certain people out of a possible inheritance.
Whereas a will is required to go through probate, a trust is not subjected to the same legal process.
Probate is when an authorized court administrator reviews a will to make sure it is valid, pays the required taxes that wills generate, and then abides by the document’s instructions.
During probate, family members can object to the will if they believe there is invalidity, which can make the process extremely time-consuming.
On the other hand, a trust, another type of estate planning tool, is when the trust or (person creating the trust) gives the trustee (person who manages the trust’s assets) the right to hold property for beneficiaries (ones who receive the assets).
Although seemingly more complex than a will, trusts are not required to go through probate. They can be administered very quickly because family members are not permitted to object to the content in a trust.
Also, because trusts are not required to be court-reviewed, they are not made public, and, therefore are better protected against creditors.
To put it simply, it’s always better to have a plan. Contact our office to determine which plan is best for you!