What Happens When You Die Without a Will

I've noted the need for us all to have a will (see You Still Need a Will and Benefits of a Will for details), so when I got an email a couple weeks ago about wills, I was interested to see what the sender had to say. Here's his note:

As 65% of us die without a will, the majority of your existing and potential audience is affected by intestacy laws.  In fact, most people don’t realize that their surviving spouse is frequently required to share the estate with the children.

You can show your audience exactly who gets their property and how much is given to each person with the free “Intestacy Calculators” at MyStateWill.com. 

These are the first interactive programs that interpret intestacy laws and present an easily understood summary of what really happens when you die without a will. They also show the amount of Federal Estate Tax that is due.

I stopped by the site and it's actually pretty slick. It took me about two minutes to do my current state, then a couple more minutes each for me to do the two states I've lived in in the past (just for fun.) There were interesting results -- differ for each state -- including these options:

1. Current state: 60% to my spouse and 20% to each of my kids.

2. Last state lived in: estate divided evenly between wife and kids (each getting 33.3%)

3. "Home" state: 100% to my wife.

Just goes to show you -- different states have different rules and if you want to control the destiny of your estate, you need a will.

Check out the site and let me know what you think!

Comments

[JB]

To add to the comment:

I'm an attorney in NC and about half of my practice is estate planning. Many folks do not understand the implication of your estate being split between your spouse and children. At first glance, this sounds like an okay proposition. Most want to know that their children will be provided for.

The problem is in how the funds have to be handled after your death. Most states are going to require that the children's share be managed by a trustee appointed by the court system. It might vary by state, but I think in many cases, your surviving spouse is likely to be appointed as the trustee. The problem is that the trustee must then submit annual reports to the courts until the children come of age. The annual reports are tedious---as in, at least in NC, every sincle bit of income or expense has to be accounted for to the penny. This is tedious and it binds the hands of the surviving spouse as to what they can and cannot do with the money.

If you want to leave money to both your spouse and children, you would be better off executing your own trust document before your death. Trusts that are not administered by the court typically can allow for more flexibility and will not have such rigorous reporting requirements (however your spouse still has a fiduciary duty to the children and the children would have a cause of action if your spouse should ever misappropriate the funds, so there is still some protection available).

[Blaine Moore]

My wife is working part time drawing up wills for people. Since we have no kids and no huge assets other than our house right now, she isn't worried about us having one. Probably in about 2 or 3 years we will be drafting some wills, though.

[Minimum Wage]

If I die without a will, my family gets a small book collection, Goodwill gets a few clothes, and everyone else gets squat.

Hmmm, this gives me an idea...is this (drawing up wiolls for people) something I could make money at? Where I draw up the will and the high-priced lawyer merely reviews it?