If a person passes away and does not have a will or estate plan providing direction for how to settle his or her estate, then it will be subject to state laws.
While this may be acceptable in cases where a person had few or no assets, or if everything would transfer to the same party regardless, it can result in unfortunate situations and losses. Below are some of these potential consequences that people may not anticipate.
- Estranged parties receiving property - Maryland laws dictate who will receive property after someone's death, unless that person has a will providing direction for distribution. Without a will or other planning documents, property could go to an estranged sibling or distant relative instead of a close friend or charity.
- Overlooked beneficiaries - Many people have certain parties they would want to protect or provide for when they pass away. Without a will, these parties may not receive anything. This could include romantic (but unmarried) partners, close friends or even pets.
- Unavoidable probate - Part of estate planning could include establishing and funding a trust. This can allow property to transfer directly to the trust upon the owner's death. This means that it can avoid the public and complicated probate process. Without these measures, all property and assets will go through probate.
- Decision-making challenges - If you have children or other dependents, their care - as well as your own - can be in jeopardy if you are incapacitated or pass away. If you have an estate plan, you can identify the parties you want and trust to make decisions on your behalf and care for loved ones. Without a plan, guardianship as well as financial and medical decisions could be difficult to resolve and invite conflicts.
Taking the time to create an estate plan can allow you to avoid these and similar unfortunate situations.
And even if you don't necessarily see the benefit in this type of planning, consider your loved ones. After all, they are the ones who will have to resolve disputes, make difficult decisions and navigate the legal process. Providing them with a comprehensive guide can be a valuable gift.