Almost everyone needs an estate plan. Many people think the term “estate plan” is something only high net worth individuals need. Not true.
What If You Don't Have an Estate Plan?
What happens if you don’t prepare an estate plan? The state of California has a default plan for you.
What happens if you don’t prepare an estate plan? The state of California has a default plan for you. But as Ronald Reagan said, “the nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'"
Intestacy is the state of dying without a will. If you don’t have a will or a revocable living trust, then when you die, your assets will go according to the California Probate Code.
If you live in California it goes like this:
if you are married, your assets will go to your spouse.
If you have children, your separate assets and your share of the community property will go one-half to your spouse if you have one child, and one-third to your spouse if you have more than one child. The rest will go to your children
If you are not married and don’t have children, your assets will go to your next of kin in the following order:
to your parents, if they are alive, then
to your siblings, if they are alive, then
to your aunts and uncles, if they are alive, then
to your cousins, if they are alive, then
to your crazy fourth cousin twice removed, if he isn’t alive, then
to the state. Believe it or not (or course you can believe it), if there are no living family members, the state will take your assets. The legal term for this is “escheat” - your estate will escheat to the state.
You get the picture. If you don’t have a will or a revocable living trust which states how you want your assets distributed, you have what is called an intestate estate. Intestate estates are distributed according to the state probate code.