What happens when you don't have an estate plan
What Happens When You Don’t Have an Estate Plan
Planning for the future can be tough, but it’s necessary to ensure your loved ones and assets are properly cared for when you're no longer around. In this post, I’ll explain the risks of not having an estate plan in place. If you’d rather watch a video on this topic, I’ve created a video that covers everything mentioned here. You can check it out below.
Dying Without an Estate Plan: What Does It Mean?
If you pass away without an estate plan, meaning you don’t have a will or trust, you are considered to have died "intestate." In this situation, the state decides how your assets are distributed. Here are the three key issues that arise when someone dies intestate:
The state decides who gets your assets. Without a will or trust, you lose the ability to control who inherits your estate. Instead, state intestacy laws take over, which may result in asset distribution that doesn’t align with your wishes.
The state appoints guardians for your minor children. If you have young children and haven’t appointed a guardian through your will, the state will decide who will raise them, and their choice may not align with your preferences.
The state chooses your personal representative. A personal representative is responsible for handling your estate, paying bills, and distributing assets. Without a will, the court appoints this person, and it may be someone you wouldn’t have chosen yourself.
Intestacy Laws and Unintended Consequences
Each state has intestacy laws that determine who inherits when there’s no will. In Massachusetts, for example, your estate may be divided between your spouse and children, even if you intended your spouse to receive everything. Worse, your spouse might have to share assets with your parents, or, if you’re estranged from them, they could still inherit from you instead of close friends or other loved ones.
Intestacy laws are rigid, and you don’t have control over who gets what. This could lead to unnecessary conflict among family members and cause delays in asset distribution, leaving your loved ones in financial hardship during an already difficult time.
The Importance of Naming Guardians and a Personal Representative
Another critical reason to have an estate plan is to ensure your children are taken care of. Without a will, the state appoints a guardian for your minor children, which may not be who you would have chosen. Additionally, naming a personal representative in your will is essential, as it allows you to choose someone you trust to manage your estate. Without this, a court-appointed representative may charge more than someone you could have selected, reducing the inheritance left to your beneficiaries.
Incomplete Estate Plans: The Risks of Missing Documents
Even if you have a will, there are other crucial documents you need to avoid potential legal and financial problems if you become incapacitated. Two essential documents to include in your estate plan are:
Healthcare Proxy – A healthcare proxy designates someone you trust to make medical decisions for you if you’re unable to do so. Without this document, family members may disagree on your care, leading to delays in treatment and additional stress during an already challenging time.
Durable Power of Attorney – This document grants someone the authority to make legal and financial decisions on your behalf. Without it, your bills may go unpaid, and your loved ones could be forced to go through the lengthy and expensive court process of appointing a conservator.
Why You Need an Estate Plan Now
Having an estate plan ensures that your assets are distributed according to your wishes, minimizes family conflicts, and allows you to appoint guardians for your children and a trusted personal representative to manage your estate. It also ensures that your medical and financial affairs are handled smoothly if you become incapacitated.
If you don’t yet have a complete estate plan or are missing key documents like a healthcare proxy or durable power of attorney, now is the time to act.
At Bayog Law, we can help you draft all the necessary documents to ensure your estate is managed exactly how you want. I offer free 30-minute consultations, which you can easily book at www.bayoglaw.com/calendar. Let’s start planning today to protect your loved ones tomorrow!
