Most adults in the U.S. do not have a will or a trust. According to a survey by Caring.com, only 33% of Americans have one of these estate planning documents. If so many people don’t have a will, you might be wondering whether you need one. Your family can just figure out who gets what when you’re gone, right?
Actually, that’s not how it works if you die without a will. “If you don’t have a plan, the state has one for you,” says Jane Allison Austin, an elder law and estate planning attorney in California. In other words, state laws dictate how property is distributed when someone dies without a will. And a judge can decide who will take care of minor children if both parents die without putting their wishes in writing.
Most people don’t realize this, though. “Misinformation is a big problem,” says Josh Berkley, an estate planning attorney in Kentucky. People have all sorts of ideas about what happens if they die without a will, he says. Knowing how the process actually works will help you understand why you need a will.
Why people don’t have wills
Procrastination is the key reason people don’t have a will, according to the Caring.com survey. Because writing a will requires making a lot of decisions—how to divide assets, whom to name as executor, whom to name as a guardian for children—it can be overwhelming. “It’s easier to put it off,” Austin says, than to make those decisions.
Berkley agrees. “They think they have to have all the answers in place before they call me,” he says. However, the benefit of working with an attorney to write a will is that you can get guidance when making those decisions.
However, the other key reason people give for not having a will is that they don’t have enough assets to leave anyone, according to the Caring.com survey. They assume their family members can sort out who gets what. Berkley says he often hears, “‘My family gets along, there won’t be a problem. If I die, my spouse gets it all.’” However, that’s not how it works, he says.
What happens if you die without a will?
If you die without a will or trust, it is known in legal terms as dying intestate.That means there is no legal document that spells out your wishes. Instead, your state’s intestacy laws will determine how your assets will be distributed. When this happens …
You might have no say in who inherits your assets: Intestate laws vary from state to state. For the most part, though, they tend to favor spouses and blood relatives when it comes to establishing who inherits assets. So a partner you didn’t marry or stepchildren likely won’t get anything if you die without a will.
It’s important to note that not all assets are subject to intestate succession laws. So you might have a say in where some of your assets go even if you die without a will. More on that below.
You have no say in who administers your estate: With a will, you can name an executor—someone who will be in charge of settling debts and distributing assets when you die. If you have a trust, you can name a trustee to manage the assets in the trust. Without either of these documents, you have no say in who administers your estate when you die.
Your heirs can petition the probate court to be the administrator for your estate. If there is a surviving spouse, that person typically is appointed administrator. If no one applies for the position, a judge can appoint a public administrator.
You have no say in who cares for your minor children: A will allows you to name a guardian for minor children if both parents die. Depending on the state where you live, you might be able to name a guardian in a separate form.
Without a valid legal document, though, a judge will decide who takes care of your kids if you and your children’s other parent dies. Typically, it’s a family member who steps forward to fill the role. But if no one does, your children can become wards of the state, Berkley says.
What happens if you die without a will and you are single?
If you die without a will and are single, state intestacy laws follow a certain hierarchy for distributing assets.
Typically, if you have children and no spouse, your children will inherit everything and will have to divide assets equally. This can create a problem if there is real property such as a house and you have several children who don’t see eye-to-eye about what to do with that property. If one wants to sell the house and the other doesn’t, it could lead to fighting. You can eliminate this problem with a will, Berkley says, by ordering that the house be sold and the proceeds divided equally.
Grandchildren usually are next in line to inherit assets. For example, if you die unmarried and without a will in California and have two children but one has died, half of your assets would go to the living child and half would go to the deceased child’s children, Austin says.
If there is no spouse, children or grandchildren, parents typically inherit everything. If there are siblings but no spouse, descendants or parents, siblings usually inherit everything. If you die without any relatives, your assets may go to the state.
What happens if you die without a will and you are married?
Don’t assume that your spouse will get everything when you die. In fact, if you die without a will and are married, it can create all sorts of headaches for your surviving spouse.
What your spouse gets depends, in part, on how you own property. It also can depend on whether you have children, living parents and siblings.
In the 41 common law states, ownership is based on the names on a title, deed or account.
- Any property or account owned jointly by both spouses with right of survivorship at the time of the death of the first spouse passes directly to the surviving spouse. (One caveat: In most states, joint tenancies of real property can be severed by either joint tenant prior to death without the permission of the other spouse. If either spouse records a new deed severing the joint tenancy and creating a tenancy in common, that spouse can leave his or her share of the property to any person through their will, or it will pass according to intestacy succession if there is no will. A surviving spouse could be left owning the property with one or more third parties.)
- If you own property in your name only and die without a will, that property will be distributed based on your state’s intestacy laws. So your spouse might have to split your assets with your children, your parents or your siblings.
Dying without a will in a common law state can create problems if you leave behind minor children who get half of your assets. The surviving parent might have to apply for guardianship to manage the assets the children receive, and there could be court oversight of how the money is spent until the children are 18, Berkley says.
In the nine community property states—Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington,Wisconsin—all income, property and debts acquired during marriage belong equally to spouses. Separate property is property you acquired before marriage or as an inheritance or gift.
- In community property states, spouses typically inherit the deceased spouse’s share of community property and all of the separate property if there are no children, grandchildren, parents or siblings.
- If you and your spouse have children together, your spouse will typically inherit all of your community property. Separate property typically is divided among the surviving spouse and children, or parents and siblings if there are no children.
- In some community property states, a spouse will have to divide community property with the deceased spouse’s children from another relationship.
Assets not subject to intestacy laws
Certain assets and property are not subject to intestacy laws.
- Life insurance proceeds when a beneficiary is named
- Property or accounts with joint tenancy ownership or with right of survivorship at the time of death in a community property state
- Property legally transferred to a living trust prior to death
- Funds in a retirement account when a beneficiary is named
- Funds in a payable-on-death bank account
- Stocks and securities in a transfer-on-death account
- Real estate with a transfer-on-death deed
- Vehicles with transfer-on-death titles
These assets and property will transfer directly to the joint owner or beneficiary without going through the probate process. This is true even if you have a will. That’s because anything in joint ownership or with a beneficiary designation will supersede a will.
For example, if your will states that all of the funds in your retirement account should go to your children but your ex-wife still is listed as the beneficiary on that account, the funds will go to her. That’s why it’s important to keep beneficiary designations up-to-date.
What to do when someone dies without a will?
When someone dies without a will, there’s a process that must be followed to settle any debts that are owed and to distribute any assets that aren’t jointly owned or that don’t have named beneficiaries.
The first step is to file a petition with the probate court in the county where the person died to initiate probate proceedings. Probate is the process for settling estates both when there is a will and there is not a will. (Probate can be avoided when there is a trust.)
Someone will have to petition to be the administrator—the personal representative for the person who died. If no one petitions to be the administrator, one will have to be appointed. Either way, a judge makes the final decision on who is named administrator.
The administrator will then have to file an inventory of assets that must go through probate (see above for assets that are exempt). The administrator also has to provide a notice of death to the deceased’s creditors so they can submit claims to be paid. Only after debts and any taxes owed are paid from assets in the estate are remaining assets distributed according to intestate succession laws.
The probate process is similar if there is a will. However, a will can specify who the personal representative—the executor—will be, rather than leaving it up to a judge to appoint someone (although the judge retains authority to approve and appoint the person you nominate). And the will, rather than state law, specifies who gets what. Wills can be contested, but Berkley says that it is rare for a will to be overturned.
How to write a valid will
It doesn’t matter if you promise family or friends that they will receive certain property when you die. Unless it’s in writing in a valid will or trust, they won’t get that property unless they fall into the state’s intestate succession hierarchy. “If you go to court and say, he always told me I’m going to get that, they are going to laugh at you,” Berkley says.
If you want a say in who gets what when you die, you need a valid will.
- Holographic will: A holographic will is a handwritten will, and it’s acceptable in some states. To be valid, though, it must be entirely handwritten (not typed), signed by you and witnessed according to the laws of your state (typically, two witnesses are required).
- Fill-in-the-blank will: There are a variety of free and low-cost estate planning documents available online. However, these downloadable forms are made to be general and are not personalized. So this option might not work for you if you have a complicated financial or family situation.
- Attorney drafted will: Paying a few hundred dollars for an attorney to draft a will that is personalized to your needs and adheres to your state’s laws can be money well spent. Look for an estate planning attorney or elder law attorney through your state bar association.
Even if you have a will, your heirs will have to go through the probate process. In some states, this can be very costly. For example, attorney fees for a $1 million estate that goes through probate in California can be as much as $23,000, Austin says. Then there are court fees, accounting fees, bond fees and executor fees. Plus, the probate process is public and can be lengthy.
Creating a living trust and transferring assets to that trust can be a way to avoid probate. It can give you more control than a will over when and how assets are distributed. And the person you name as trustee can get immediate access to the funds in the trust at your time of death rather than waiting several months to get through the probate process. “Pretty much everybody should have at least a will,” Austin says. “There are many reasons to consider a trust as well.”
Regardless of whether you choose to have a will or trust or both, you need to let your family know where these documents are stored and how to access them. One safe and simple way to store estate planning documents is with a digital vault, such as the one that is part of the Carefull service. Documents can be uploaded and easily shared with trusted family members.