Often when we consider the need for a having a will or a trust, we think about the rich and famous. You may have heard how Prince, Pablo Picasso, and Aretha Franklin (just to name a few) died without wills leaving an influx of people fight over their estates for years. We often shake our heads thinking that it’s a shame but somehow, we don’t make the connection that dying without a will or trust can have messy consequences no matter how much money we may leave behind. As an estate planning attorney, I have seen firsthand the difference that a well-thought out and executed estate plan makes for the people who are grieving the loss of a loved one. In this blog I will share a few of the ways that dying without a will or a trust can make things “messy”.
1. Intestate Succession.
When someone passes away without a will or trust, the distribution of their assets is decided by state laws of intestacy. In legal-speak, we call this “dying intestate”. The priority in which a person inherits under state law, known as intestate succession, varies from one state to another. Without clear instructions and legal documentation, the state will determine how your estate is divided, often leaving your loved ones with little control or influence over the distribution. This can result in unintended consequences, such as estranged family members receiving a portion of your assets or loved ones being disinherited. It can also significantly delay the distribution of your estate if blood relatives who inherit under intestacy laws are difficult to locate. Indiana’s intestate succession laws can be found in Indiana Code § 29-1-2-1.
2. Delays and Legal Complications.
Dying without a will or trust typically leads to a more complicated and lengthier probate process. Probate is the legal process through which a court oversees the distribution of a person’s estate. Without legally valid instructions left behind, the court must appoint an administrator, known as a personal representative in Indiana, to manage the estate, gather information on heirs, pay any debts, and distribute assets according to intestate laws. If there is a dispute over who should serve as the administrator of the estate, this process can add unnecessary stress and can lead to delays, additional costs, and potential division among family members.
3. Impact on Minor Children.
For parents, dying without an a will can be particularly concerning. This is because the court will decide who should become the guardian of your minor children in your absence. While the court tries to act in the best interest of the child, the decision may not align with your desired wishes. By having a will or trust, you can appoint a guardian who you trust to raise your children and ensure their well-being, providing you with peace of mind that your wishes will be respected.
4. Tax Implications:
Proper estate planning can help mitigate tax burdens on your loved ones in the event of your passing. Without a carefully crafted estate plan, your assets may be subject to unnecessary taxes, leaving fewer resources for your beneficiaries. By working with an estate planning attorney, you can explore strategies to minimize tax liabilities, such as establishing trusts or implementing gifting strategies, ensuring that more of your wealth is preserved for your loved ones rather than being absorbed by taxes.
Unfortunately, the impact of dying without a will or trust can be far-reaching and can cause unnecessary distress for your loved ones during an already difficult time. By engaging in proactive estate planning, you can ensure that your assets are distributed according to your wishes, avoid unnecessary delays and complications, protect the well-being of your minor children, and minimize tax burdens.
