Recent reports have indicated that the singer Prince may have died without making either a will or an estate plan. While those reports may ultimately prove inaccurate, this is an appropriate time to point out the dangers of dying without a will or estate plan in place.
Dying without a will, also known as intestacy, can have significant negative consequences. If a person dies without a will, then a person’s estate gets allocated amongst a person’s heirs in shares mandated by state law. The law takes no account of whether one potential heir is in greater need or whether or not a particular heir is responsible enough to handle an inheritance. Also, under intestate succession, relatives or potential heirs beyond the individual’s current spouse, parents, children, and grandchildren generally get shut out entirely. Additionally, while shares of the estate are allocated as set out in law, who specifically gets certain items is left up in the air. Bitter feelings amongst relatives can result from disagreements about who gets what items.
Another important weakness of dying without a will is the inability to protect the estate from estate taxes. The burden of estate taxes can largely be minimized, or avoided altogether, through proper planning. Once a person dies without a will or a trust, it is then too late to take the appropriate steps to minimize an individual’s estate tax burden.
All of these problems can be avoided with a well written estate plan. An individual can tailor their estate to their specific wishes while minimizing their tax burden. Please see an elder law attorney to either make an estate plan or to make sure your current documents still meet your needs.