Most Americans do not have a simple will as part of their estate plan. You might believe that a will is only for the rich and famous and not the average person with a far smaller net worth. Or perhaps you’re under the impression that a will is entirely unnecessary if you have a trust, jointly owned property, or named beneficiaries on insurance policies. Learn about what happens when you die without a will.

Some Inheritance DOES Pass to Heirs Without a Will

Indeed, some assets do not need a will to transfer to your desired heirs. The following assets will pass to the surviving co-owner or your named beneficiary:

  • IRA, 401(k), or other retirement accounts
  • Securities in a transfer-on-death account
  • Life insurance 
  • Payable-on-death bank accounts
  • Property in a living trust
  • 401(k)s, IRAs, other retirement accounts
  • Pay-on-death bank accounts
  • “Joint tenancy” real property
  • Property owned in “tenancy by the entirety”

Many people believe that with beneficiary designations on life insurance policies, property deeds, or retirement accounts, a will is unnecessary.  While it is true that those particular designations will ensure the right people you elected will receive benefits or inherit those assets, the distribution stops there.  If there are other assets that you own – such as a car, a china set, or jewelry, to name a few – or if you would like to give part of your estate to a charitable organization, a will is essential to your estate planning needs.

You DO Need a Will 

Everyone who owns anything – no matter how little value it may seem to have – should have a will. Having a will puts you in charge of the distribution of assets upon your death.  Without a will or other estate plan – referred to as intestacy – you have no control, and your state’s rules determine who gets what after your death. Without a will, your assets pass to others according to arbitrary rules in North Carolina.  Sometimes intestate law gives heirs inheritances unfairly. However, there is no way for your family to change the intestate laws. When going through probate court without your will, the state follows NC’s intestacy laws, resulting in a less-than-perfect split of assets. Intestacy law may not be in line with your wishes and leave many surviving loved ones unhappy. 

Family Strife Without a Will

Let’s say you are 65 years of age and have two grown children. You date a woman for six months and then get married. She also has two grown children. Right before your first anniversary, you pass away with no will. Your new wife inherits the $460,000 home at your death because you added her as a “joint tenancy” owner with you. She also inherits your retirement accounts as beneficiary, worth $500,000 since you named her as beneficiary.   Intestate law also gives her $60,000 of the $100,000 in your savings account that you would have given to your children if you had a will. She also receives $13,333 of the remaining $40,000. Your two children inherit only $13,333 each. In this case, intestate law may cause strife between your newly married/ widowed wife and your two children, who didn’t expect to lose their family home to a woman you just met in the last two years. Your children may also feel bitter that she inherited most of what used to be their inheritance.  Taking this further, let’s say your wife passes away two years after you. She leaves your family’s home and $560,000 assets (from your estate) to her two children. These grown kids who were not in your family only three years ago inherited the family’s home and assets. Your own children feel left out in the cold.  Family dynamics play a part in estate planning, which state intestacy laws do not consider. Many people have blended families. There may have been second or third marriages. Older couples may choose to cohabitate after a death or divorce and never legally marry. In all of these situations, you need an experienced estate planning attorney to help you think of the eventualities and plan for your heirs reasonably.

Your Will Protects Your Minor Children

The simpler your affairs are, the less complicated your will and overall estate plan is. However, it doesn’t take much to complicate your estate.  For example, if you have minor children, your will must name a guardian for those children in the event of your death. Without naming a guardian, the state may name someone you do not trust to manage their money (your estate) and decide who cares for their day-to-day needs.  Likewise, suppose you have a relative who is disabled, elderly, or without the financial sophistication to manage an inheritance after your death. In that case, a will lets you name someone to watch over these assets for your loved ones. You may also set up a special needs or supplemental needs trust and name a trustee to manage assets for minors or those who are disabled or have special needs.   

A Will Allows Your Estate to Avoid Costly Court Proceedings

When you die without a will, your estate goes into probate court. Probate is a judicial proceeding by which the court decides the rightful heirs and distribution of assets of a deceased. Going through probate can be time-consuming and expensive without a will.  Your will can waive probate requirements such as:

  • executor forced to post bond before serving as the court’s representative for your estate
  • obtaining judicial approval to have an estate sale

Probate court can drag on for months or even years, depending on your estate. Your heirs are more likely to file frivolous lawsuits over who deserves inheritance rights without a will. A will can also include a no-contest clause, reducing the likelihood that potential heirs from arguing over its contents, something that simply isn’t possible if you don’t make a will.

Your Estate, Your Choice

Creating a will as part of your estate plan is primarily about passing your wealth to your loved ones after you die since a will only “works” after it’s gone through the probate court process. It is about giving you both independence and control of what happens to your assets after your death. Instead of leaving the distribution of your property to local intestacy laws, a will can put your wishes down on paper and direct a selected person to carry out your desires precisely as expressed.  Without a will, you have no choice, and your family is left with a mess to clean up. Many families never recover soured relationships once an estate without a will goes through probate. Unfair settlements leave disgruntled family members to seethe in frustration.

We Can Help

If you own property or assets or care for minor children or a disabled adult, we can help you get started making plans for the future, including your last will and testament. If you’ve divorced, remarried, or retired, it’s a good time to look over and possibly revise your will. Keeping planning documents up-to-date ensures your wishes take precedence in the future. Our experienced estate planning attorneys make it easy to create or revise your will and other legal documents. Contact us for an initial consultation to ensure your estate plan will work for your family. Get in touch today and find out how we can help.

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