“Aretha Franklin’s death on Aug. 16 and the passing of Prince in April 2016 turned up one thing the entertainers shared in common. Both died without a will. According to experts, dying without a will creates mystery.”
That’s not a mystery you want your family and loved ones to experience. What happens when someone dies without a will, is that your children, partner and relatives end up spending a lot of time in court, trying to convince a court-appointed probate administrator of what you may have wanted done with your property and other assets. That’s probably not how you want to be remembered, says The North Bay Business Journal in the article “Don’t have a will? Lack of estate-planning could cost your successors dearly.”
The most common way to avoid confusion, expense and stress is to have an estate plan, including a will, in place. Another tool used in estate planning is called a “pour-over” will. A pour-over will states that assets that have not been placed in the living trust, should go there when you die. By creating a trust that contains all of your assets, you are avoiding the cost and time it takes to go through the probate process.
A living trust is a legal document that places your assets inside a trust for your benefit, while you are still living. When you die, the assets are distributed by your chosen representative, which in this case is a successor trustee, to the beneficiaries you have named.
All states have their own laws about how trusts are treated. However, if you live in California, the court can initiate a probate case when there is no will and there are assets requiring the opening of a probate, particularly concerning real estate owned in the decedent’s name. The court typically appoints a close relative—a spouse, adult child or grandchild, in that order—as an administrator.
That person is responsible for settling your debts, including final state and federal income taxes. Debts are deducted from the assets of the estate, then the administrator distributes the remaining assets to the deceased person’s heirs.
If you are survived by children but have no spouse, then the children inherit everything in equal shares. If you are survived by a spouse only, then assets are handled differently, depending upon whether the assets are community or separate property. Community property is property acquired during the marriage, including income earned during the marriage.
Separate property is property that a spouse owned before marriage or after a separation. It also includes property that a spouse inherits or receives as a gift before, during and after marriage. Assets can change status, if they are commingled, if the spouses have a written agreement, or the spouses improve separate property with community income.
After a decedent passes, the spouse gets all of the community property. When the decedent is survived by a spouse and there are no children, grandchildren, parents, siblings, nieces or nephews, then the spouse also inherits all the separate property.
The probate process starts with the filing of a probate petition in the county in which the decedent lives. The petitioner must also pay a court reporter fee and a fee for publishing the notice of probate with a local newspaper. The court then appoints a probate referee to appraise the estate assets. There is at least one fee for the appraisal, but there can be more fees. The probate process closes with the filing of a petition for the final distribution of the estate assets. This action also has a fee.
The probate court will also charge fees for filing other petitions, the probate notice, compensating the probate referee and if needed, for providing certified copies of court documents. When there is no will, the court requires the administrator to get a probate bond. That protects the beneficiaries and creditors, in case the administrator does not do his or her job correctly.
It sounds like a lot of trouble for a grieving family member, doesn’t it?
It will be far better for your family, if you have a will and an estate plan in place. Make an appointment with an experienced estate planning attorney to review your situation, any existing legal documents and make sure that your estate plan is properly prepared. You can set up an appointment by calling Rowley Law today at 847-490-5330. You’ll need a will, you may need a trust and you’ll want a power of attorney and a medical power of attorney.
Reference: The North Bay Business Journal (September 24, 2018) “Don’t have a will? Lack of estate-planning could cost your successors dearly”