Last week, I promised that I would share what happens when someone dies without creating an estate plan and actually leave assets behind. I won’t get into the nitty gritty. You likely know that those assets will be passed down to family members, at least that’s the ideal outcome… But did you know, whether you actually choose to take action and create an estate plan for yourself or not, one has already been created for you? Yep, it’s true! Each of the states have default rules that apply to people who fail to create their own estate plans.
You are considered to have died Intestate if you die without a Will or an estate plan. What does that mean? Well, depending on your state’s rules, your assets will automatically be passed down to your next of kin. Typically, your next of kin would be your spouse, your children, or your parents. But again, it all depends on state rules and your family dynamics.
Now that doesn’t sound like such a bad thing, right? Maybe, unless your loved one’s estate doesn’t have a whole bunch of money to begin with, or your family dynamics are murky, or you have a relative who believes they deserve more than what they are entitled to…. It just depends. And guess who ends up benefiting from having to resolve all this? A me! An attorney typically has to get involved to get everything ironed out and help the courts determine who’s entitled to what. The courts will be responsible for appointing someone to be the executor of the estate, and oversee the distribution of your assets. It may or may not be someone you would have chosen yourself, or someone you trust for that matter. It’s all well and good if your assets actually go to the people you love. In some cases, they do. You’ve probably even heard that your assets could go to the state in some instances. The likely scenario, the one you probably have not considered, is that that your assets could be passed down to people you’ve never even met…a distant relative…maybe one you despise… maybe one who despises you and everything you stand for…I’ll let that marinate for a minute. Personally, I do not want anyone who didn’t celebrate my life to benefit from my estate. But that’s just me. Maybe it’s you too.
So, yeah…It’s best to plan ahead of time! If for no other reason, think about the wealth gap I mentioned last week, the one that places African American wealth more 228 years behind, the one that I believe is exacerbated by our failure or lack of planning. Do you really want your assets to be distributed to people you don’t even know? Well, if you don’t, put [a] TAG on it. Do not let your state create an estate plan for you. Get on it!