According to a recent article, “The Confusing Fallout of Dying Without a Will,” from The Wall Street Journal, despite the consequences for their heirs and loved ones, millions of Americans still don't have a Will. The total wealth of American households has tripled over the past 30 years, according to the Congressional Budget Office. Still, more than half of Americans polled by Gallup said they didn’t have a Will in 2021. Another survey showed that one in five Americans with investible assets of $1 million or more do not have a Will.
Dying without a Will means, for people residing in Pennsylvania, the laws of the Commonwealth of Pennsylvania will determine who gets your assets. In some cases, loved ones could end up with nothing. They could be evicted from the family home and even hit with massive tax bills.
This is especially problematic for unmarried couples. One example—after 18 years of living together, a couple had an appointment with an estate planning lawyer to create Wills. However, the woman died in a horseback riding accident just before the appointment. Therefore, her partner had to get the woman’s sons, who lived overseas, to sign off, so he could be appointed as her Administrator. The couple had agreed between themselves to let him have the home and SUV they’d purchased together. However, State law gave her sons her 50 percent interest. Therefore, he had to buy out her sons' interests to keep his home and car.
Dying without a Will, or “intestate,” means you haven't named an Executor to administer your estate, named a guardian for minor children, or directed the distribution of your assets as you want.
Here’s what you need to know about having—or not having—a Will:
State law governs property distribution. In some states, where there is a surviving spouse and children, the surviving spouse gets 100% of the estate, and the children get nothing. The surviving spouse gets 50% in other states, and the children divide the estate balance. For example, in Pennsylvania, if there are no children but there is a surviving parent, the surviving spouse gets the first $30,000, and the balance is split 50/50 with the parent. This is most likely an unintended consequence that can easily be avoided by having a well-drafted Will in place.
Check on all assets for beneficiary designations. Retirement accounts and life insurance policies typically pass to whomever is listed as the beneficiary. However, if you never named a beneficiary, the state’s laws will determine who receives those assets, as well.
If you do not have a Will and want to be sure a partner gets these assets, you will need to speak with an experienced estate planning attorney to explore your options. For example, you might be able to use a transfer on death deed or a payable on death account. However, there may be better ways to accomplish this goal. We, at Curran Estate & Elder Law, in Berks County, Pennsylvania, are here to ensure your assets are distributed the way you want them to be.
Reference: The Wall Street Journal (May 2, 2023) “The Confusing Fallout of Dying Without a Will”
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