WHY YOU SHOULD AVOID DYING INTESTATE (AND HOW)
About two out of three Americans will die without a will. This is known as dying intestate.
While the reasons for not having a will vary, the result is the same for everyone: they don't get to choose who receives their property when they die. Instead, their assets are distributed according to the laws of their state. This process is called intestate succession.
Sometimes, this is not a bad thing. In most states, a person’s spouse, children, parents, and siblings are given priority in the line of succession. But, even if someone is fine with their next of kin receiving all of their money and property, the family can still be required to go through probate. This can be a long, costly, and public court process.
State law can only assume how the typical person would distribute their estate. When a state’s default intestacy laws don't align with the actual preferences of the decedent, this can lead to many problems.
Ohio Intestacy Laws
It is understandable why people don't want to talk or think about death. But dying without a will takes power out of the individual’s hands and puts it in the hands of the state.
Here is a general idea of Ohio's default laws on who inherits when a person dies:
If there is a surviving spouse and no children, everything goes to the spouse
If there is a surviving spouse and surviving children, everything goes to the spouse
If there is no surviving spouse, all assets go to the children
If there is one surviving child and the surviving spouse is not the biological or adoptive parent of the decedent's child, the first $20,000 plus 1/2 of the balance of the estate goes to the spouse and the remainder goes to the child
If there is no surviving spouse or children, everything goes to the parents
If there is no surviving spouse, children, or parents, everything goes to the siblings
Things can get more complicated for decedents with blended families. Read the full section of the Ohio Revised Code here.
Potential Consequences of Dying Intestate
Intestacy laws are largely similar from state to state, but details can vary and get complicated for families living outside the typical nuclear structure. Blended families especially should be thinking about estate planning.
Nonblood Beneficiaries
Default intestacy laws can leave out not only stepchildren, foster children, and children placed for adoption, but also close family friends, charities, and others not related by blood.
Who Receives the Money and Property—and How Much
Intestacy laws are rigid about who receives how much. Intestate shares don't consider special circumstances, such as an heir who receives financial aid becoming disqualified from further benefits due to an estate disbursement. This could be avoided simply by placing assets in a trust for that person’s benefit.
Also, most intestate laws require equal distributions to children. There are many good reasons why parents may not want this.
Other Problems
All these special circumstances require nuance in an estate plan, but state intestacy laws are not nuanced. Intestacy can also give rise to the following issues:
The probate court chooses a personal representative to manage the estate, who may not be somebody the decedent would have chosen.
The court decides who raises minor children.
Small business owners can lose control of what happens to the business when they die.
Property that the decedent intended to keep in the family could be sold.
The probate process can be lengthy and delay how soon loved ones receive money and property.
Probate costs can drain money and property that otherwise would have gone to heirs.
Arguments can break out between heirs about what the decedent would have wanted.
Digital assets like social media accounts and Bitcoin accounts could be left in limbo.
There are no instructions for end-of-life care or incapacity.
To clarify, not all accounts and property pass through probate when someone dies without a will. Some accounts and property bypass probate, including:
Property jointly owned with survivorship rights,
Accounts with beneficiary designations (i.e. life insurance and retirement accounts),
Property with a transfer-on-death designation, and
Payable-on-death accounts.
Anything owned by the decedent in their name alone at death, without a beneficiary designation, passes through the probate court and is subject to intestacy law.
Take Control - Don't Leave Your Legacy Up to The State of Ohio
There is much about death we cannot control. We don't know when, where, or how we will meet our end. But, we can control our legacy and make our final wishes known through an estate plan.
Many people make up reasons for not creating an estate plan. Perhaps you believe that you're too young or don't have enough assets. The fact is, every adult with ANY amount of assets needs an estate plan. At DuPont & Blumenstiel, we can craft the most basic or most complex estate plan that fits your needs and your budget. You can rest easy knowing your money and property is taken care of.
Don't leave anything to chance. Create an estate plan while you still can and make your wishes known.
To get started, Download our Consumer's Guide to Estate Planning or call our office at 614-408-0529 to schedule an appointment.