When someone passes away, their estate has to be passed down to the next generation or other beneficiaries. If they have an estate plan and a will, that will be used in the distribution. If they do not, then it is known as dying intestate. State law will make the determination, rather than their own plan.
For example, in Virginia, a surviving spouse typically inherits a person’s estate, followed by their adult children. If there is no estate plan, then the state is just going to follow this list of regulations and split up the estate as they see fit. The family has little say in the process.
What are the benefits of an estate plan?
There can be significant benefits to drafting an estate plan to avoid intestate succession. To begin with, you can choose any beneficiaries that you want. Maybe you want to include people who are not direct members of your family, like a close family friend, a neighbor or a business partner. They would receive nothing under intestate succession laws, but you can certainly write them into your estate plan if you wish.
Additionally, the estate plan makes your wishes clear, which can help to reduce the odds of a dispute among your beneficiaries. You can leave them instructions for how you want things to be handled, especially concerning items with sentimental value. In this sense, dying without an estate plan simply increases the odds of a dispute or a conflict.
Are you interested in drafting an estate plan this year? Just be sure you know what legal steps to take.