What Happens If I Die Without a Will?
Dying without a will means you are what the courts consider “intestate,” which means laws of your state determine how your property is distributed. In most cases, your assets would go to your spouse,...
The principal ways to avoid probate are:
1. Create a revocable living trust (RLT) and transfer assets into it. The trustee has control over the assets, so naming the owner as trustee maintains control in the owner. The trustee/owner can amend or revoke the trust at any time. When the trustee/owner dies, the assets pass to his or her beneficiaries outright or in trust as the deceased owner specified in the trust document without going through probate. This method provides the most flexibility but is the most expensive.
2. Hold property with one or more other persons as joint tenants with rights of survivorship. Upon death, the owner’s interest in the property passes to the other joint tenant without the need for probate. Joint tenancy has a number of potential drawbacks. The asset owner and the joint tenant will have equal ownership rights
in and access to the property and joint tenancy cannot be revoked. If the property is real estate, all joint tenants need to agree on property management decisions. If the property is a bank account, either joint tenant can withdraw the entire balance.
3. Execute a transfer on death deed for real estate and pay on death document for financial accounts and securities. With a transfer on death deed, upon death the subject property passes to the beneficiary named in the deed without going through probate. The beneficiary has no rights in the property until the owner dies. The owner can revoke the deed. However, these deeds are available only in a limited number of states. Similarly, a pay on death account passes to the beneficiary upon death without the need for probate. The beneficiary has no
right to the funds in the account while the owner alive.
4. Complete beneficiary designations for life insurance and retirement accounts naming someone other than the estate. If the estate is the beneficiary, the funds will need to pass through probate. Similarly, if the beneficiary designations are not completed, upon death the insurance proceeds and retirement accounts will pass to the estate and require probate.
5. Give property away to the intended beneficiaries before death. Any property not owned at death will not need to be probated. Making gifts while alive can also be an effective strategy for reducing estate taxes, although very few estates are large enough to incur estate taxes. Notice that a will is not included in this list. Disposing of probate assets in a will does not avoid probate.
Dying without a will means you are what the courts consider “intestate,” which means laws of your state determine how your property is distributed. In most cases, your assets would go to your spouse,...
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