Many people think that if they die while they are married, their spouse and kids automatically inherit everything. They are likely referring to the rules that apply to someone who has died without a will. In legal jargon, it is called “intestate”. Each state has differing intestate laws. The general rule is that your spouse will receive a portion, and the rest is divided among your heirs. We will look more closely at California Inheritance Laws in our next article.
It mayseem like you have your loved ones covered, if part of your estate goes to your spouse and kids. However consider these four additional questions:
Who will be your kids’ legal guardian?
If both of the parents of minor-aged children die intestate, the children are left without a legal guardian. Some people have named godparents with the intent of the children going to the godparents. However, this is not necessarily true. Without this information being in an estate plan, a court will appoint someone to be the children’s guardian. The judge seeks to act in the children’s best interests and gathers information on the parents, the children, and the family circumstances. It is important to remember that there are both sides of the family that will likely have a strong opinion on who the children should be raised by. The decision is up to the court. Unfortunately, the judge may not make the decision that you, as a parent, would have made.
What about your family structure?
When intestate laws were originally written, it was assumed that families consisted of a mother and a father and their natural born children. Many families are not structured this way. In a recent analysis, there were found to be 10,276 differing family structures in the United States. This can get legally complicated and is out of your hands if you die intestate.
With a will or trust, you control your estate and essentially eliminate the risk of your assets going to unintended family members…or ex-family members.
What happens if you are separated from your spouse?
If you are separated from your spouse when you die, state law decides what happens to your estate. The court often ignores your separation and just considers you still legally married.
If you are separated from your spouse, and your divorce is pending, you should definitely talk with your divorce lawyer and an estate planning attorney about your options.
Will creditors still be able to claim entitlement to your assets?
Dying without a will and trust provides no asset protection or preservation benefits. An estate’s assets are vulnerable to creditors, lawsuits, and others who may claim entitlement to the property. These claims would take precedence over the statutory requirements for inheritance over your family.
The best way to safeguard and pass along what you’ve worked so hard to build is to talk to an estate planning attorney. Take the first step in putting protections in place for you, your family, and your assets by contacting our office and scheduling a free estate planning consultation.