Everyone knows they’re going to die’ he said again, ‘but nobody believes it. If we did, we would do things differently.’’
-Mitch Albom, Tuesdays with Morrie
When I was a kid, I had a leather bag full of different “treasures” hidden in my closet. These, along with a few special books and family pictures, were my most valuable possessions. I had no idea what happens when you die without a will, but I used to imagine that if I tragically died, my treasures would get taken (since they were clearly oh-so-valuable!). So from time to time I would pull out a piece of notebook paper and scribble my own version of a will, sentimentally bequeathing my treasures to people in my family. This was just one dramatic outworking of my vivid imagination; obviously, no 9-year-old needs a will.
But it does attest to the fact that even the smallest and simplest of us have pieces of ourselves we would want to give back to the people we love. And that’s what most people think of when they think about creating a will – bequeathing things they own to others.
(Related: Want to know how to get certain things to certain people at the end of your life? Click here.)
What Happens If You Die Without A Will?
While it’s true that leaving our possessions to loved ones a huge part of what a Last Will and Testament accomplishes, it actually does a lot more. It keeps several messy situations from happening. Believe us, what happens if you die without a will is often not a pretty picture.
If you’re considering whether or not it’s worth the time, energy, and money to create a Last Will and Testament, or if it seems like something you should do but you’ve never really known why it’s so important, let us give you some insight into what happens if you die without a will:
If You Don’t Make A Plan, The Government Has One Ready
If you died today with no will, your estate would become what’s called “intestate”.
“Intestacy” is just a legal term that refers to your state government’s default plan for what happens to your assets if you die without a will. Because many people aren’t prepared to pass away when they do, the government has to have some type of process in place to distribute their possessions and close their estate for them.
But you likely won’t want the government controlling how your finances and personal property are administered, nor will you want the family problems that arise so often with intestacy.
If intestacy enters the picture, one of these four issues almost certainly comes along with it:
Your property can go to the wrong person:
We’ve seen it happen on many occasions: money going to estranged parents instead of a beloved fiance, to an alienated child instead of children who provided care and support during your final days, or to cousins you’ve never met instead of a close friend.
Ms. Burns was a dear old lady who agreed to allow her adult son to come live with her. He hadn’t had a job in years. She wanted to help him, but her stipulation was that if she provided for his living expenses during her life, the money she spent for him would be his inheritance. However, as she mentally declined, Ms. Burns’s son began stealing from her. Social services eventually caught on and began prosecuting him for theft, but the situation worsened when Ms. Burns finally did pass away without a will. Her estate went through the intestacy process, and because it was bound to Virginia’s default rules, her remaining assets were divided evenly between her daughter, her granddaughter, and the very son who had been stealing from her. He ended up getting a double inheritance after having taken advantage of her because she didn’t have an estate plan, and there was nothing anyone could do about it.
The wrong person can be selected as your executor:
An executor is the person appointed to distribute your property and close your estate when you die. But if you don’t plan your estate, a judge will decide who that person should be, and they don’t always choose the best candidate. One family we helped found this out the hard way:
Ms. Fischer had five children, and had indicated to her family that she wanted her assets distributed evenly amongst them at the time of her death. But then she got sick. As she was lying in the hospital on a morphine drip, her youngest son came in and either convinced her to sign or forged her signature on documents indicating the majority of her assets should go to him. When she passed away, her estate went to intestacy and, unfortunately, the judge appointed this son as the executor of her will. So on top of stealing her assets, he then had complete control over everything she owned. It took over $100,000 and several years worth of lawsuits to take away his executive power, and when one of his siblings finally was appointed in his place, they had the unpleasant job of trying to get back from him all the money he’d taken. It was a long, heart-wrenching process that cost everyone time and money, and could have been avoided from the beginning with a proper estate plan.
Practical, end-of-life decisions can become overcomplicated:
Disputes: Family disputes are much more common under the default rules of intestacy because the deceased hasn’t crafted a will to avoid them.
Bond: The personal representative always has to post a bond for an intestate account. This can add hundreds to thousands of dollars to the amount owed.
Difficult to sell real estate: The personal representative of an intestate estate must obtain court permission before selling real estate (land) that the deceased owned. This often results in the property being conveyed to 2, 3, 4 or more people, all of whom may have very different ideas about what to do with the property, which often results in litigation.
Funeral arrangements: Funerals may be delayed if there is not an agreement between all the relatives about how to handle it.
Business problems: Businesses can struggle and sink during the probate process, and that almost happened to one estate we dealt with:
A local man who owned three restaurants in the area passed away very suddenly and without a will. He had three children and a spouse, but his wife was not the mother of his children. The family did not get off to a good start when it came to distributing his estate. Each of his family members thought his businesses were worth more than they actually were, and they immediately began fighting about what should be done with them. His wife was appointed as his estate’s administrator, but had to be replaced by an attorney after it came out that she was stealing money from his restaurants to be used for herself. In the meantime, the restaurants almost went bankrupt with no one to manage them in his place. Unfortunately, this is an all too common story for businesses – they often either flounder or completely die if the owner passes away without a will.
Your minor children may end up in terrible situations:
This possibility may be the worst of what happens if you die without a will. The decision about who will take care of your minor children if you die is ultimately left up to a judge, and until the judge makes a custody decision, their day-to-day care will be handled by the Department of Social Services. If the judge decides no one close to the child is fit to care for them, the child will end up in foster care, instead of with a person or couple of your choosing.
(Want more info on how to use the law to protect your minor children? Click here!)
You lose your opportunity for relational estate planning:
Traditional estate planning is all about controlling your assets at the end of your life. But we believe creating your will and other estate planning documents is way more about your important relationships than it is about your money. You can use them to protect and provide for your loved ones, avoid conflict, leave them your legacy, preserve special memories, ease their burdens, and more. You have a huge opportunity to leave your family in the best position possible if you plan ahead. But if you die unprepared you miss out on doing all you can for the ones you love.
(If you’re interested in learning more about the philosophy behind relational estate planning, click here.)
What Happens If You Die Without A Will Doesn’t Have to Happen to You
These unfortunate situations are all possibilities for what happens when you die without a will. But if you take the time to create a legally binding estate plan, you won’t have to give these worst-case scenarios a second thought.
Click here to request you free estate planning consultation today.