I run into many people that do not have a will, much less an estate plan. Most people have preconceived notions about their estate if they pass away without a will. One notion runs along the lines of “everyone knows what to do with my stuff if I die so there is no need of a will.” The second notion is that most feel they do not have an estate large enough to worry about an estate plan. I will deal with the second notion on estate size in the future to concentrate on the problems with the first one.
While relying on conversations that a person has had with others regarding their estate, AKA, “their stuff,” seems like it could work out in the abstract; more times than not it only drives discord. Most people will have had multiple conflicting conversations with multiple people on what to do with their estate prior to their death. This would inherently cause a great deal of confusion as to who gets the remainder of your estate after paying off your debts. Even if two people partake in the same conversation, one person will remember the conversation differently than the other. I guess it is easy to say that everyone has their own internal biases.
Multiple viewpoints on the disbursement of a person’s estate would bring about mass confusion and numerous frivolous law suits. The government does not like this outcome because it would be an inefficient use of the legal system. It would also slow down the paying of claims raising the risk tolerance of creditors and delay the disbursing of assets to heirs. The probate courts would be become massive “he heard/she heard” battles to determine the decedent’s intent. Lastly, no one would want to become the personal representative for a person dying without a will because of the headaches it would cause.
To eliminate the confusion caused by people that do not estate plan, the government has created a legal system called intestate that dictates the process of dividing up a intestate decedent’s estate (i.e. someone that died with our a will). For informational purposes only, a person that dies with a will can be called dying testate. Intestate statutes are an orderly plan for your estate but have several nuances that needed to be understood.
This issues involved include what assets are covered by intestate statutes, the payment of claims through intestate, the issue of alleged heirs, the issue of disbursing the property under intestate statutes along with other issues create a system that many people feel they are comfortable with. But, when the system and its restrictions are explained most people reexamine the need for a will.
The next several posts will explain intestate and its restrictions.
I always like to start off my initial conversation with new clients telling them they already have an estate plan devised by the government. Meeting with me is the opportunity to opt-out of the intestate statutes to provide the flexibility and individual needs every testator should have.