Estate Planning Simplified: Wills, Trusts, and Intestacy Explained

Estate Planning Simplified: Wills, Trusts, and Intestacy Explained

Planning for your estate is essential to protect your assets and loved ones. Here’s a concise guide on what happens if you pass away intestate (without a will or trust), with a will, or with a trust, assuming you have two children but no spouse. Having a complete guide on what happens if you pass away can simplify decision-making.

1. Dying Intestate (No Will or Trust)

When you die intestate, state law and the court determine how your assets are distributed:

  • Probate is Required: Your accounts and property go through a public probate process. This means court records will detail your finances and beneficiaries.
  • Assets Distributed by State Law: Typically, your children will inherit equally, with no safeguards or strings attached.
  • Minors Require Guardians: If your children are underage, the court will appoint a guardian or conservator to manage their inheritance. This process can be expensive and time-consuming.
  • No Say in Guardianship: Without a will, the court decides who raises your minor children, often defaulting to the other legal parent or a relative.

Bottom Line: Dying intestate leaves critical decisions to state law and the court, exposing your financial and personal details publicly. Understanding the guide on what happens if you pass away intestate helps you prepare better.

2. Dying with a Will

A will allows you to specify how your assets are distributed after you die and who should raise your children. However, it still involves probate:

  • Control Over Distribution: You can name beneficiaries and set restrictions, such as creating a testamentary trust to manage your children’s inheritance until they reach a specified age.
  • Nominate Guardians: You can nominate a guardian for your minor children, though the court must approve the choice. Nominations of guardians can also be done on separate guardian nomination forms.
  • Still Public: Probate is still required, meaning your estate details will be publicly accessible.

Bottom Line: A will gives you more control but doesn’t avoid probate or ensure privacy. Having a guide on what happens if you pass away with a will can provide clarity on asset distribution.

3. Dying with a Trust

A properly funded revocable living trust bypasses probate and keeps your estate private:

  • Avoids Probate: Assets held in the trust transfer directly to beneficiaries without court involvement.
  • Privacy Maintained: The details of your finances and beneficiaries remain confidential.
  • Flexible Management: You manage the trust during your lifetime and appoint a successor trustee to handle it after your death or incapacitation.
  • Requires Proper Funding: You must transfer ownership of your accounts and property to the trust or name the trust as a beneficiary.

Even with a trust, you’ll still need a pour-over will to transfer any assets not included in the trust to the trust after your death. For more information, consult a comprehensive guide on what happens if you pass away with a trust.

Bottom Line: A trust provides privacy, avoids probate, and ensures your assets are distributed according to your wishes without unnecessary delays or risks to your beneficiaries.

Choosing the Right Plan

Whether you choose a will, trust, or both, having an estate plan is far better than leaving decisions to state law. Contact our office today to create a tailored estate plan that protects your assets and ensures your loved ones are cared for according to your wishes. Ultimately, having a guide on what happens if you pass away ensures you can make informed decisions.

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