When the "Luck of the Irish" Just Isn't Good Enough
Apparently, the majority of Americans’ rely on good luck for their estate plans because according to the American Bar Association, 55% of Americans die without a will. When a person dies without a legal will, it is referred to as an intestate estate. With an intestate estate, instead of following your wishes, your estate is administered pursuant to the default laws in your state. Of course, in estate planning, as with most things, proper preparation has more to do with your outcome than luck does.
When a person dies their estate usually goes through probate which is the legal process to ensure their outstanding debts and taxes are paid before their assets are distributed to their beneficiaries. If the decedent did not have a valid will or their will inadequately addresses the issues at hand, then the state’s laws of intestacy fill in the blanks for the probate process.
There are many reasons a person may not have a will, but procrastination or lack of knowledge is usually at the heart of these reasons. According to AARP, 47% of Americans polled who did not have an estate plan in the place cited just not “getting around to it” as their reason for not establishing one. But others simply choose not to execute a will because they trust their family to know and follow through on their wishes after they are deceased. This is a costly mistake because an intestate estate is controlled by state laws, not the goodwill of the potential beneficiaries.
The first issue with intestacy is determining who the administrator of the estate will be. In West Virginia who serves as administrator of the estate is determined by who applies first as well as an order of priority established by state law. Unfortunately, whoever ends up being your administrator will need to pay a non-refundable bond based off the value of your entire estate. The next surprise to the decedent’s family is that verbal promises of bequeathing specific assets to specific individuals is not easily fulfilled. The intestate laws look at degrees of relationship and treat those beneficiaries of an equal relationship equally regardless of the personal relationship or verbal promises. For example, all of the decedent’s children are treated the same even if a child has been estranged for decades. For a beneficiary who is a minor or under a disability, there may also be additional costs and time involved because the court will likely need to oversee the management of that beneficiary’s inheritance.
While 46% of families are interested in learning more about establishing an estate plan, only one in ten have sought advice from a knowledgeable estate planning professional according to a 2016 Wealth Advisor report. Achieving your estate planning goals has nothing to do with luck. Consulting with an estate planning attorney is an ideal way to gain peace of mind regarding planning. In our experience, our clients and their families are much more confident and at ease, once they have completed their estate plan knowing they have a solid plan in place that meets their needs and goals.
Change your ‘luck’ by making your last will and testament a priority, then enjoy life and focus on more pleasurable interests. Don’t delay, get in touch with a trusted estate planning professional today!