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What Happens if You Die Without a Will?

Creating a will is the easiest way to divide your assets when you die, but what happens when you don't?
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By Mark Colgan, CFP

Creating a will should be the first step in a comprehensive estate planning process as it allows you to make sure your wishes are properly carried out after your death. Typically, the cost of preparing a basic will is a few hundred dollars. However, most people get a will, healthcare proxy, and power of attorney. The three combined can cost anywhere from $500 to $2,500. For many people, it only takes one or two meetings to complete these documents, so it is not terribly expensive, nor does it take a significant amount of time.

Mark Colgan, CFP®, is a founding partner of Montage Wealth Management. Over the last 29 years he has helped hundreds of clients navigate through significant life events that require big money decisions. He is also the author of Death’s Red Tape, your Guide for Navigating Legal, Financial, and Personal Transitions When a Partner Dies,  a newly released technical guide by Mark Colgan on the logistics people have to contend with after they lose a loved one. For more information visit www.montagewealthmanagement.com.

Mark Colgan

Benefits of Having a Will

Dying with a will ensures that your personal and financial assets are given to the organizations and people you wish to receive them. It allows you to choose the person to settle your affairs on your behalf. Additionally, the probate process assures things are done in an orderly and formal way.

Your family will also appreciate that you completed a will. Because your wishes are clear, it leaves little room for dispute about who gets what. More importantly, if you have children under 18, you can name a guardian and trustee to arrange for their inheritance to be properly managed and disbursed.

Dangers of Not Having a Will

  • Married With Children - If a married person dies without leaving a will, then investments, property, and accounts that are “jointly owned” go to the co-owner (usually a spouse) without going to probate court. However, separately owned property and accounts typically are distributed by the state, which may award one-third to one-half of the assets to a surviving spouse, with the remainder split among the children. If the children are minors, those funds will be held in an account only to be accessed with court approval.
  • Married Without Children or Grandchildren - If a married person with no children dies without a will, some states will give the entire state to the surviving widow or widower. There may be a cap of about $100,000 in certain states. Other states give one-third to one-half of the deceased's estate to the spouse with the rest going to the deceased's parents or siblings. The jointly owned property, financial accounts, investments, and community property go to the surviving co-owner.
  • Single With Children - If someone is unmarried with children when they pass, all state laws give the deceased's assets to surviving children in equal shares. If an adult child of the decedent is dead, their share is split among their children (the decedent’s grandchildren). Again, if these children are minors, the money will be subject to court control and supervision.
  • Single With No Children or Grandchildren - For unmarried people with no children, most states will typically favor the person’s parents, if they are still alive. If not, many states will divide the property among the decedent's siblings (or nephews and nieces if the siblings are no longer alive). The state will commonly have a consanguinity chart identifying closest relatives. Assets may pass to distant cousins who have no relationship with or never met the decedent. If there is no living kin, the state will typically get the estate.

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  • Unmarried Couples - If you are not married to your partner, dying without a will can devastate your partner financially because intestacy laws only recognize spouses and relatives. Unmarried couples don't inherit their partner's property if one of them dies with no will. Instead, the decedent's property is distributed among relatives and the partner isn't legally entitled to anything. 
  • Domestic Partners - Special rules may apply to your domestic partnership. Not all states honor domestic partnerships, so you should check the laws that apply to you and determine how your property would be distributed if you die intestate. Generally, domestic partners may have the same rights as a surviving spouse, but it depends on how the property is owned.

How to Create a Will

Even if the laws in your state match your wishes in terms of the disbursal of your estate, it's important to carefully weigh your options. Preparing a will helps you take care of loved ones should you pass away. It can also safeguard your property and money from becoming assets of the state.

Follow these seven steps to creating a will:

  1. Gather your thoughts about who you would like to leave your assets to – your beneficiaries, who you would like to administer the will – the executor or executrix, and if you have minor children, who you would like to be their guardian. 
  2. Talk with your financial planner about your initiative to obtain or update your will. They may provide additional insight as to what you should consider before meeting with an attorney. 
  3. Meet with a trust and estate attorney since they specialize in doing wills. 
  4. Let the attorney know you would also like a health care proxy and power of attorney. 
  5. After signing documents, properly store them in a safe. Keep copies of your HCP with the person who you assigned to be the HCP, your primary care physician, in your glove compartment, second home, etc. 
  6. Communicate your wishes and plans with those you love. 
  7. Review and update your will anytime there is a significant life event or at least every three years.

Creating your own will online is doable but risky. There is a lot of fine print and malleable parts that may not be recognized by an online software. Planning your estate is not a task that should be taken lightly. It’s best to meet with an attorney that can understand your situation, provide the best advice, and draft a will that works for you. It’s worth noting your will is not “set in stone.” If things change or people enter or leave your life, you can adjust it periodically, so it stays up to date.

Most people enjoy the peace of mind that comes with knowing you have done everything in your power to protect those you love the most. Seeking the advice of a financial advisor specializing in estate planning is a great way to get the process started.

About the author: Mark Colgan

Mark Colgan, CFP®, is a founding partner of Montage Wealth Management. Over the last 29 years he has helped hundreds of clients navigate through significant life events that require big money decisions. He is also the author of Death’s Red Tape, your Guide for Navigating Legal, Financial, and Personal Transitions When a Partner Dies, a newly released technical guide by Mark Colgan on the logistics people have to contend with after they lose a loved one. For more information visit www.montagewealthmanagement.com.


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