• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Wealth Pilgrim

No Money Worries. No Matter What.

Neal Frankle featured in
  • Home
  • Life Insurance
  • Investing
    • Build Strong Investment Building Blocks To Avoid Going Broke In Retirement
    • Systematic Mutual Fund and ETF Investing
    • Stock Market Investing Guide
    • Choosing the Right Investment Brokerage Guide
    • How Bonds Work Guide
    • How Banks Really Work Guide
    • Annuities – What You Need To Know Before You Invest
    • A Beginners Guide To Buying Individual Stocks
    • Create A Pool Of Great Mutual Funds and ETFs To Pick From To Secure Your Retirement
    • ETF and Index Fund Investment Guide
  • Earn More
  • Banking
  • Retirement Planning
    • Retirement Guide
  • Reviews
    • Upgrade Personal Loans Review
    • Lending Club Review
    • Prosper Review
    • Ally Invest TradeKing Review
    • CIT Bank Review
    • LegalZoom Review
    • Lexington Law Review
    • Airbnb Host Review
    • Should You Drive For Uber?
  • Tax
  • Courses
    • Raise Your Credit Score So You Can Buy a House – Free Video Course

What Happens If You Die With No Will?

by Neal Frankle, CFP ®, The article represents the author's opinion. This post may contain affiliate links. Please read our disclosure for more info.

You may have read about the importance of having a will and that’s great. But it’s hard to get information about what happens to your assets if you die without one. Let’s consider that now.

Many Assets Pass To Heirs Without Needing A Will Or Trust

Keep in mind that the purpose of a will is to tell the world (and the government) how you want your asset reallocated to your heirs once you die. But there are three kinds of assets that get passed to other specific people after you pass whether you have a will or not:

Assets With Beneficiaries

If you have life insurance, you hopefully named a beneficiary on the policy. If so, the death benefit goes to that person no matter what your trust or will says. And it goes to that person or persons even if you don’t have a will. So long as you named a beneficiary before you died, all is good.

The same thing is true about retirement accounts (as long as you filled out your beneficiary forms) and TOD (Transfer on Death) accounts. As long as you named a beneficiary, that person is going to inherit the asset after you die no matter what.

Neal’s Notes:  If you specifically want to cut someone OUT of your estate, you have to not only have estate planning documents, but you have to take other steps as well.  Don’t leave this to chance Pilgrim.

Assets With Other Owners

If you own assets as a joint tenant and then die, the surviving joint tenant(s) get the entire asset. Again, it just doesn’t matter at all if you have a will or not when it comes to joint tenant property.  But what happens if both joint tenants die at the same time?  For those people worried about that, consider looking into the joint tenant beneficiary tactic.

Assets In Trust

Likewise, if you own an asset which is actually held by your trust, the trust document dictates how the asset gets split up after you pass away. Even if you have a will that calls for that asset to be split up a different way, if it’s held in trust, the trust takes precedence. And if you don’t have a will, it doesn’t matter either for assets held in trust. The trust does the job.

If all your assets are owned either as joint tenants, in the trust or have a beneficiary, you don’t have anything to worry about from the standpoint of divvying up assets. You don’t need a will and you don’t have to worry. Nice. But if you have assets that aren’t covered by any of the three situations I described above, you’ve got a problem.

What Happens to Everything Else?

Sadly, if you don’t have a will the courts and the lawyers get involved with all your other assets through a process called “Intestate Probate”. The court first appoints an executor which is usually the surviving spouse or registered domestic partner if one is living. If not, the adult children are typically next in line. The job of the executor is to manage the assets until the court orders the assets to be distributed.

How Are Assets Split Up In Intestate Probate?

After the executor is selected, the courts apply state laws that direct how to divide up the estate. Keep in mind that these laws vary from state to state.

Usually, these intestate probate laws only provide for the spouse, registered domestic partner and blood relatives. Nobody else gets a thing if you don’t have a will or trust. In most cases, the spouse or registered partner gets most of the estate and the closer a person is in the family the more they potentially could receive. How your assets get split up is left entirely up to the state laws and how the judge interprets those laws.

What’s worse is that this process can easily take a year or two and it could drag on much longer. It’s expensive because lawyers have to be involved, there is no privacy. Worst of all the person who died has no control over what happens to his assets. To me that sounds like a terrible idea. A real bummer.

Is A Will A Solution?

Well, having a will is probably better than not having one. At least if you have a will you get to declare who you want to inherit from you. But a will still must be probated and that means it has to go through the court system. As a result, the judge assigned to your case could turn things around completely and split your assets up far differently than what you declared in your will. On top of that, the lawyers are still heavily involved in this process and that means your estate could be whittled down to a toothpick – their fees come right out of your estate friend.

A Better Solution

I’m not a lawyer and I can’t provide legal advice. But depending on the state you live in, a trust might be a far better solution for you than a will. It’s certainly much better than having nothing. As I’ve explained in earlier posts, the trust is private, inexpensive, not administered by the courts and doesn’t involve much attorney time.

When you go, your assets get left behind and somebody has to pick them up. If the assets have a beneficiary or if you own them in joint tenants or through a trust, you are all set. But remember that everything else needs to be re-allocated to your survivors. If you don’t have a will, those assets will go through a long and costly process called intestate probate. Even if you have a will, assets may have to be probated unless you have a will.

What is your estate plan? Does in include having a will? Why or why not?

Tweet
Pin
Share2

Reader Interactions

User Generated Content (UGC) Disclosure: Please note that the opinions of the commenters are not necessarily the opinions of this site.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Are You Human? * Time limit is exhausted. Please reload CAPTCHA.

Primary Sidebar

Who is Neal Frankle

Neal Frankle

I'm a CERTIFIED FINANCIAL PLANNER™ Professional with more than 25 years of experience. I feel very blessed and hope to share my personal financial experience and professional wisdom with readers of WealthPilgrim.
Read More »

Stay Connected

Facebook Twitter YouTube RSS
We are on YouTube
Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement.  We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement. We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

YouTube Video UCoU0buhwVplzXrsyf342nOg

Retirement Crusaders

June 10, 2022 1:19 PM

Subscribe
This error message is only visible to WordPress admins

Error 403: Requests from referer are blocked..

Domain code: global
Reason code: forbidden

More Categories

Career Development
College Funding
Credit Cards
Credit Score Fixes
Money and Marriage
Debt Relief
Estate Protection
Property Investment Loans
Small Business Strategies
Spend Less Money
Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement.  We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement. We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

YouTube Video UCoU0buhwVplzXrsyf342nOg

Retirement Crusaders

June 10, 2022 1:19 PM

Subscribe
This error message is only visible to WordPress admins

Error 403: Requests from referer are blocked..

Domain code: global
Reason code: forbidden

Disclaimer

Wealth Pilgrim is not responsible for and does not endorse any advertising, products or resource available from advertisements on this website. Wealth Pilgrim receives compensation from Google for advertising space on this website, but does not control the advertising selection or content. Please do the appropriate research before participating in any third party offers. The information contained in WealthPilgrim.com is for general information or entertainment purposes only and does not constitute professional financial advice. Please contact an independent financial professional for advice regarding your specific situation. Wealth Pilgrim does not provide investment advisory services and is not a registered investment adviser. Neal may provide advisory services through Wealth Resources Group, a registered investment adviser. Wealth Pilgrim and Wealth Resources Group are affiliated companies. In accordance with FTC guidelines, we state that we have a financial relationship with some of the companies mentioned in this website. This may include receiving payments,access to free products and services for product and service reviews and giveaways. Any references to third party products, rates, or websites are subject to change without notice. We do our best to maintain current information, but due to the rapidly changing environment, some information may have changed since it was published. Please do the appropriate research before participating in any third party offers.


About · Contact · Disclaimer & Privacy policy

Copyright © Wealth Pilgrim 2023 All Rights Reserved