Despite the importance of having an estate plan, many Americans die without one every day. Individuals who die without an estate plan are said to die intestate. If you die intestate, the State in which you died determines how your assets will be distributed. All fifty states have laws concerning intestate succession.
The purpose of intestate succession law is to distribute a decedent’s estate in a manner that conforms to what the average person would have wanted. Most intestate succession plans follow a standard pattern of transferring assets to a decedent’s closest relatives, beginning with his or her spouse and children. If the decedent does not have a surviving spouse or child, the assets will typically go to his or her parents, then his or her siblings, then his or her nieces and nephews, then to his or her grandparents. If no relatives can be located, a person’s estate will go to the state.
Without an estate plan, your loved ones will have a more difficult time navigating the process of probate. The probate court will likely oversee the entire process, which will result in more time and higher costs. The probate court will also appoint an administrator. This person may not be the person you would have chosen, had you drafted a will.
Not only can drafting an estate plan ensure that your assets will be distributed based on your wishes, but it can also ensure that more of your assets are going to your desired beneficiaries, rather than the government. Many estate planning tools such as trusts and other non-probate transfers are popular as tax avoidance measures.