What happens if I don’t have a will?
If you die without having a will your state has devised a distribution scheme dictating the distribution of your assets. Priority of distribution typically is as follows:
- Surviving spouse
- Grandchildren (great grandchildren, etc.)
- Nieces and nephews
The search continues through your ancestral tree for a living heir and if no living relative is located, your state may inherit 100% of your estate.
If you die without a will, your assets will go through probate, which is often unnecessary, time consuming, public and very expensive.
What if I don’t have a will and have stepchildren?
If you are a stepparent with stepchildren and your spouse (your stepchildren’s biological parent) dies first and then you die without a will, your stepchildren will be DISINHERITED. This is an honest but common mistake in California due to community property laws. You must have an estate plan if you are a blended family.
What happens if I have a will?
If you have a will, your assets will go through probate. By having a will though, you enjoy the privilege of telling your state the beneficiaries you intend to inherit your estate.
Guardians for minor children?
If you have minor children, you need to nominate the guardians you would want to raise your minor children in the event you died unexpectedly. Your guardian should be someone with similar values, ethics, morals, and life experiences. You nominate your guardian choices in your will.
What is wrong with probate?
Probate is the judicially supervised process of changing title of your assets from your name to your beneficiary’s name. Typical complaints regarding probate include:
Minor Beneficiaries. If any beneficiary is under the age of eighteen, their monies are held in an account and distributed to the minor outright on the minor’s 18th birthday. (Would your life be different if you received a large sum of money on your 18th birthday? Would you have gone to college if you received one million dollars on your 18th birthday? Would you have started your own business if you received one million dollars on your 18th birthday? ) Titling your assets in a trust avoids probate and enables you to choose the dates of distribution for minors (e.g., a distribution of 5% upon attainment of a bachelor degree from an accredited four year university or when the beneficiary reaches the age of 25, whichever occurs first, a distribution of ½ at age 30 and final distribution of the trust principal and interest outright at age 40).
Probate can be an Extremely Slow Process. Probate typically takes nine months to two years to complete. If any anyone contests your estate, probate may be infinite. Titling your assets in the name of a trust avoids probate.
Probate is a Public Process. Anyone may pull your file and obtain private information about your loved ones, including their names, addresses, telephone and social security numbers, and your financial situation, including your assets and debts. There are private businesses in the business of manipulating your loved ones into buying bogus items you “allegedly were in the process of buying for their benefit before you died.” They pull new files at the probate court (remember these files contain your loved ones names, addresses, telephone and social security numbers). They contact your loved one, who is vulnerable and grieving, telling them you were in the process of funding a bogus life insurance policy before you died and then manipulate your loved one into funding it in honor of your memory. You can protect your loved ones and avoid this scam by avoiding probate.
Probate is Very Expensive. Probate is expensive due to court costs, court filing fees and attorney fees. Court and attorney fees are determined based on the value of your assets. For example, if your home has an equitable value of $120,000 and a fair market value of $500,000, an attorney may legally charge between 1 to 5% of the fair market value depending upon the size of your estate. This may cost as much as $20,000 in this example. Titling your home in the name of a trust avoids this process and costs between $10-$30.