You may think that if you die while you are married, everything you own will automatically go to your spouse and children. But you are actually thinking of state rules that apply if someone dies without leaving a will. In legal jargon, this is referred to as dying intestate. In that case, the specifics will vary depending on your state’s law, but generally, your spouse will receive a share of what you own, and the rest may be divided among your children or parents, depending on your situation. Exactly how much your spouse will inherit depends on the state law, though.
Now, it may seem like so far, so good. Your spouse is getting an inheritance, and so are the kids. But here are some examples of how the laws can fail in many common family situations.
First, when it comes to who will get your money and property, most states’ laws presume that a family comprises a married couple and their biological children. But because that is not how many families are structured, things can quickly become legally complicated.
One analysis identified 50 different types of family structures in American households.[1] Approximately 40 percent of all marriages in the United States are remarriages for at least one spouse,[2] and—through adoption and stepfamilies—millions of children are living in blended families. Unfortunately, the laws have not kept up, and absurd results can occur if you rely on intestacy as your estate plan. Stepchildren whom you helped raise (but did not legally adopt) may end up with no inheritance, while a soon-to-be-ex-spouse may inherit from you.
For example, Carey and Blake each have a child from a prior relationship (Carey has a daughter, Rose; Blake has a son, Whitley) living with them full time. During the course of the marriage, Carey and Blake have a child together named Penny. Carey and Blake treat all three children the same. Yet when Carey dies without a will or trust, her family must rely on state law to determine who receives Carey’s assets. Everything that was owned solely by Carey is divided between Blake, Rose, and Penny. Although treated like a son, Whitley would be entitled to nothing. This may not be the outcome Carey would have desired. Without an estate plan, however, nothing more can be done. With a will or trust, you can control what happens to your money and property and who will benefit from your hard work, essentially eliminating the risk of regrettable results.
Another issue with relying on state law is that none of the transfers to your loved ones happen automatically. Your family must open a probate estate with the court and go through the process specified in state law before your property can transfer out of your name and into theirs. This process can be long and costly. It is also public. Many people would prefer that an inventory of their property and the details of their family life be kept out of the public eye. Perhaps the best way to keep your matters private is by creating and funding a revocable living trust while you are alive and have the legal capacity to do so.
Furthermore, if both parents of minor-aged children die without an estate plan, then the children are left without a legal guardian. Kids do not automatically go to a godparent or grandparent, even if that is what everyone knew the parents had intended. Instead, a court will appoint someone to be the children’s guardian. In such situations, the judge seeks to act in the children’s best interests and gathers information on the parents, the children, and the family circumstances. But the decision is up to the court; the judge, following the priority listed in the state’s law, may not choose the person that you, as their parent, would have chosen. If you had created a valid will during your lifetime, you would have been able to communicate to the judge whom you would have liked to appoint as guardian.
What if you and your spouse are separated?
State law decides what happens to your money and property if you are separated from your spouse when you die. In some states, the court ignores your separation and still considers you legally married. If the state intestacy law (which, again, applies if you die without a valid will) grants spouses a share of your property at your death, as most do, then your estranged spouse may be entitled to all or a portion of it when you die.
Also, some state laws or court orders prohibit you from disinheriting your spouse after you file for divorce but before it is finalized unless you have a prenuptial or postnuptial agreement. Without one of these agreements, you can try to omit your spouse from your will or your trust, but state law may kick in to require that a surviving spouse (who, again, is treated as being legally married to you) be given a share of what you own.
If you are separated from your spouse and your divorce is pending, talk with your divorce lawyer and an estate planning attorney about your options.
The best way to safeguard and pass along what you have worked so hard to build is to talk to a qualified estate planning attorney. Protect yourself, your family, and your money and property by contacting us today at 937-589-4144.
[1] David H. Lenok, The 50 Most Common Family Types in America, WealthManagement.com (July 20, 2016), http://www.wealthmanagement.com/high-net-worth/50-most-common-family-types-america.
[2] Jannik Lindner, Remarriage Trends: Statistics Show Complex Dynamics for Couples Blending Families, Gitnux (July 17, 2024), https://gitnux.org/remarriage-statistics.
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