Do I need an estate plan? What if someone dies without a will?

OLYMPUS DIGITAL CAMERA“Dying intestate” means a person dies without a valid and operative will. All 50 states have enacted laws that determine where your property will go should you die intestate. If you fail to plan ahead, a judge will simply appoint someone to handle the probate of your estate (i.e. decision regarding the distribution of your assets and payment of your debts). Your assets will then be distributed to your heirs according to the intestacy laws of your state. In many cases, these laws can differ greatly from the decedent’s wishes. Further, if you would like to eliminate a particular person from your estate who might receive a distribution through intestacy laws, the law will not allow you to do so without a valid will or trust. Some common results of the New Hampshire intestacy scheme are highlighted below:

Married with no children 

1) If there is no surviving child or parent of the decedent, the spouse receives the entire estate.

2) If there are no surviving children but the decedent is survived by parents, the spouse receives the first $250,000 plus 3/4 of the balance of the estate.

Married with child or children

1) If there are surviving children all of whom are issue of the surviving spouse and the spouse has one or more surviving issue who are not the issue of the decedent, the spouse receives the first $100,000 plus one half of the estate.

2) If there are surviving children who are not issue of the spouse, the spouse receives the first $100,000 plus one half of the estate.

3) If there are surviving children who are issue of the surviving spouse also, and there are no other children of the surviving spouse who survive the decedent, the spouse receives the first $250,000 plus one half of the balance.

Order of estate distribution if decedent was single, widow or widower

1) Parents

 2) Siblings and issue of each deceased sibling

 3) Grandparents

4) Issue of the grandparents who are not beyond the fourth degree of kinship

Surveys have consistently indicated that about 50% of Americans, with children, die without executing a will. Moreover, in a recent PNC Wealth Management survey, 30% of adults with investable assets of $500,000 or more admitted they didn’t have this basic document.

Perhaps the most common reason for one to procrastinate in establishing an estate plan is a fear of mortality and a perception that the process is complex and expensive. To the contrary, establishing an estate plan will actually provide comfort, involves a relatively simple process, and can save large amounts of money in the future for your desired heirs. Additionally, while an estate plan is needed by all, there are several categories of persons whose needs are more urgent than others. A few examples are parents of minors or disabled persons, same sex couples, and people whose health has changed for the worse recently.

Whether your estate is large or small, planning is essential. If your estate is small, it is important to designate who will receive your assets after your death and who should manage your estate, pay your last debts, and handle the distribution of your assets. If your estate is large, it is essential to hire an attorney to investigate ways of preserving your assets for your loved ones and reducing or postponing the amount of estate tax which otherwise might be payable after your death.

Author:  John S. Polgrean, Esquire