You may have heard the news that Aretha Franklin died on August 16, 2018 without a Will or Trust. This means she died “intestate”. With an estimated net worth of $80 million, her failure to prepare an estate plan was clearly a mistake. Many are left wondering what will happen to her estate.
The recent news may leave you wondering – what will happen to your estate if you die intestate?
What happens if you die intestate?
If you die intestate, a state court will appoint someone as the Personal Representative or Administrator of your estate. That person’s job will be to distribute your assets among your family members as state law requires. He or she will not have discretion to determine how assets are distributed or held, but will be bound by state law and the court’s authority and instruction.
If you reside in Massachusetts at your death, your assets will be divided among your family members pursuant to Massachusetts Probate Code. Essentially, Massachusetts law imposes a plan for division of your assets because you did not make a plan yourself.
Is intestacy a bad thing?
Many people die intestate – celebrities like Aretha, Prince, and Picasso, and many ordinary people. There are a lot of downsides to dying without an estate plan. Here are a few of the most important:
- You may have wanted a disposition of your assets among your family members that is different from what state law requires.
- The process of disposing of your assets will be more costly and time consuming.
- Your creditors will be able to reach all of your assets to satisfy any debts or claims.
- Your family may be more likely to fight or disagree with one another, resulting in hurt feelings and fractured relationships.
- The court will choose who will serve as Personal Representative or Administrator from among your family members based on relationship, not ability. The person appointed may not be the best choice or do the best job.
- Outright distributions of cash and other assets may be made to minors, disabled persons or spendthrifts, resulting in bad consequences.
- More federal and/or state estate taxes may be due.
State intestacy laws are merely default rules. I do not recommend relying upon them to accomplish your goals or protect your family.
Image by Brett Jordan from flickr.