Many people pass away without a Will or estate plan. This is known as dying intestate. They haven’t made a plan regarding healthcare decisions or asset distribution.
So what happens to that person‘s estate? In the absence of a legal plan, state law takes over. It will typically provide loose guidelines for how assets should be passed down to the next generation, such as transferring assets to a surviving spouse or adult children. We wrote a whole article about intestate succession in Pennsylvania, which you can find here.
Why is this a problem?
This can be a serious issue because state laws may be much different than what the person would have actually preferred.
For example, maybe someone was hoping to give some of their assets to charity. State law isn’t going to address this, so the assets would just pass on to their assumed beneficiaries. A thorough estate plan can be much more nuanced and can address such distributions, but state law is just for simple transfers to close relatives.
Another example is that of a special needs trust. Directly giving an inheritance to someone with special needs can sometimes complicate their situation because it could disqualify them from government benefits. A special needs trust can avoid this issue and help things go smoothly by supplementing those benefits. But without an estate plan, the person with special needs may just automatically inherit as a direct descendent, disqualifying them from the necessary benefits.
Drafting a plan
These are just a few examples of the issues that can come up when someone dies intestate. They help to show why it’s so important to get an estate plan in place well in advance.
If you have any further legal questions, do not hesitate to get in touch with our law firm for a consultation. We look forward to working with you.