When you die without a will, it is known as “dying intestate.” State law then will dictate who receives all of your assets.
The (Washington, PA) Observer-Reporter’s recent article, “Improper estate planning can lead to familial conflict” explains that some of your possessions will pass through probate. If you own property in several states, the process could become more difficult for your loved ones. A way to simplify the process for them is by having an updated will.
Research shows that about 60% of U.S. adults don’t have a will.
However, not all of your possessions pass through a will. 401(k)s, life insurance proceeds, pensions, and annuities pass by beneficiary designation.
For instance, even if your will states that all of your possessions are to be split equally between your two children, this may not be what occurs. If your life insurance lists only Bob as the beneficiary, he’ll walk off with 100% of the death benefit. Your younger son Doug will receive only half of the assets that don’t have a beneficiary designation. Assets that pass by designation are not controlled by the will. That is why Bob gets all the money from the insurance. As you can see, it’s vital that you review your accounts’ beneficiary designations regularly, to make certain they’re up to date. Check on them every few years or when there’s a family divorce, birth, or death. Once you’re gone, changes cannot be made.
In addition, comprehensive estate planning should include two powers of attorney (POA). The first POA is to make health decisions. The second POA is to make financial decisions if you don’t have the capacity to do so. Your POA agent has your authority to make decisions, only when you do not have the capacity and she can only exercise it for your benefit. POAs end at the drafter’s death.
It’s common today for families to have blended elements. Many people were married before and may have had children. Here’s an example of a famous father who made his third wife executor of his estate, giving her control of his business. In this case, his equally famous son was the principal player in the father’s business. The son didn’t understand the implications of his father’s estate plan. When the father died, there was a long and expensive legal battle between the son and the third wife.
Who was it? It was Dale Earnhardt Jr.
Work with our experienced estate planning attorneys to draft a comprehensive estate plan that clearly indicates your goals and wishes. Having a straightforward estate plan will go a long way in preventing fighting amongst your family.