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Jim and his wife had a falling out. During a lengthy legal process, their divorce was not yet finalized when Jim passed away suddenly. He assumed his house, bank account, and investments would all be left to the kids, but depending on the state, those assets could be left in part or in whole to an unintended recipient.
It is much more enjoyable to focus on living life to its fullest than to think about preparing for your eventual passing. But planning for passing your assets is important and can help avoid this type of major debacle, let alone headaches and complications for the people we care about and love. A will is a simple but crucial document for your estate planning. Yet LexisNexis reports that over 55% of American adults do not have a will or other estate documents.
It’s important to have a will to help those who survive you know how to distribute your assets and, possibly even more importantly, to determine who will care for family members you leave behind.
Intestacy Laws in MD/VA/DC
But what happens if you die without a will? Who decides how your assets will pass to your surviving relatives and friends? If there are young children and no remaining parent, who will take care of them?
It depends on your state’s laws.
When a person dies without a will it is known as dying “intestate,” which is when the state usually takes over to determine how the assets will be distributed. The only assets that are affected by intestate succession are those that would normally pass through your will. This excludes retirement accounts, life insurance proceeds, property held in a trust, real estate held in joint tenancy or with a right of survivorship, and funds in a payable-on-death (POD) bank account, all of which usually pass to a listed beneficiary or joint owner.
State intestacy laws vary, and the process becomes even more complicated when dealing with second marriages, children from previous marriages or non-traditional families.
For Jim from our earlier example, if he lived in Virginia, his ex-wife would have inherited everything. In Maryland and Washington D.C his ex-wife would receive at least half the assets. Depending on the state, there can be further complications if the children are minors versus adults, if Jim had any children from a previous or subsequent marriage, or if his wife had any children from another marriage. A well thought out will could prevent these complications or a lengthy legal battle for the assets.
Using Virginia, Maryland and Washington, D.C. as an example, here is what happens if you die without a will:
Who Gets What in Virginia?
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Who Gets What in Maryland?
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Who Gets What in the District of Columbia?
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Add other variables to the equation, and things get even more complex:
Non-Traditional “Marriages”
Typically, only spouses and blood relatives receive assets via intestacy laws and this can cause complications when dealing with same-sex couples, or partners that are cohabitating but not officially married. Intestate succession laws do not make provisions to pass assets to friends or domestic partners, so if your marriage is not recognized by the state where you live, your partner may have no claim to your assets.
Guardianship of Minor Children
Typically, a will has a provision for appointing a guardian to take care of young children or property left to them. What happens if a guardian is needed but there is no will? In this instance, a judge will be forced to appoint a guardian to care for the children. As part of his/her due diligence, a judge will try and gather as much information as possible about family members, friends, circumstances and the deceased parents’ wishes and try to make a determination about what is best for the child. Although a judge must always act in the best interest of the child, the judge may not be aware of extenuating circumstances, and can only do his/her best to try and honor what the parents may have wanted.
No Surviving Heirs
If the decedent has no heirs, including grandparents or aunts and uncles, perhaps they would like to donate their assets and possessions to charity and help those less fortunate. Unfortunately, if a person dies with no surviving heirs, their property will escheat to the state. States differ on how far out familial relationships extend before the state inherits the property.
A carefully drafted estate plan can help alleviate many issues and ensure that your estate is handled the way you would like upon your death. Your will can also help protect your spouse and children by making sure they are taken care of, both financially and legally. Rather than letting state law dictate how your estate is distributed, this is your opportunity to control the distribution of assets and possessions that have meaning to you.
If you don’t have a will, create one. If not for your own piece of mind, then do it for those who may depend on you.
“Who gets what” info courtesy of:
http://www.nolo.com/legal-encyclopedia/intestate-succession-virginia.html
http://www.nolo.com/legal-encyclopedia/intestate-succession-maryland.html
http://www.nolo.com/legal-encyclopedia/intestate-succession-the-district-columbia.html