What Happens When There is No Will?

Dying without a Will: What Happens to Your Estate?

A good estate plan and will outlines what happens to your assets when you pass away. Dying without a will poses certain challenges. Here's what happens.

Keyword(s): dying without a will

A 2016 poll found that 44 percent of Americans have a will. Those numbers suggest dying without a will is more common than most of us realize.

Wealthier people are more likely to make a will. But money is no guarantee.

In 2016, legendary musician Prince died without leaving a will behind. In 2018, Aretha Franklin died and left behind an estate of approximately $80 million, but no will.

Celebrity deaths get more attention when there's no will. But what happens if you die without a will? Read on to find out.

Dying Without a Will (or Dying Intestate)

Dying without a will is often referred to as "dying intestate." The "state" part is especially important here.

For instance, Franklin died in Michigan while Prince died in Minnesota. Ever state handles intestate deaths in a different way.

Spouses and children will fare better in these cases. They already have a legally established relationship with the deceased. Friends and associates are another matter.

Let's say a non-famous person dies without leaving behind a will. Their estate becomes a matter for probate court.

Probate courts alone aren't bad. In general, an estate goes into probate court even if someone left behind a will with very specific instructions. But an estate with no will is a lot tougher to untangle.

Let's say the person we mentioned earlier had two pieces of property. Property A is more valuable than Property B.

The deceased person had two children. Both of them say their parent intended to leave them Property A and give the other child Property B.

How is the probate court supposed to decide who is right? It's possible the two children will end up splitting the value of both houses. But it usually takes a lot of time and a lot of lawyers to get to that point.

Appointing an Executor

Someone who makes a will can appoint a specific executor. An executor is someone who oversees the distribution of assets. It can be a friend, family member, or probate attorney.

Needless to say, the executor has a lot of power. Which means that oftentimes, family members will go to court to fight over who should be executor.

The court has to appoint a qualified executor when someone dies without a will. But the court's role isn't just to guess what the deceased wanted. They must also apply relevant state laws.

For instance, let's say a person named Fred dies with a wife and three known children. The probate court decides to divide the estate four ways when, at the last minute, another person shows up. This person claims to be Fred's secret child.

If a DNA test confirms they're telling the truth, then they may very well have a claim to some of the estate. It's much easier to leave out specific children if you write a will. The children who get left out can still challenge that will, but they will have a much shakier case.

Why Wills Matter

There are lots of reasons for dying without a will. Some people wrongly assume they have time to make a will later. Some people may think it's too expensive and time-consuming to draft a will.

But not making a will is an expensive choice. It may not cost you anything, but it will cost your survivors a lot of time, money, and heartache.

The estate attorney at R Dean Davenport Attorney at Law has years of experience in drafting wills for Texas residents. Contact us to get started with drafting your will.

All You Need to Know about a Living Will

What You Need to Know about Creating a Living Will

A living will allows you to make decisions about your own healthcare, even if you are incapacitated. We look at what you need to know about creating one.

Keyword(s): a living will

No one wants to think about the idea of being incapacitated and unable to make important decisions. It's a dark thought to consider, but the reality is, it's entirely possible.

And if it does happen, a living will can resolve a ton of conflict. It allows you to let your wishes be known if you are in a coma or otherwise incapacitated.

Here's what you need to know what the importance of creating a living will and how you can get started.

What Is a Living Will?

A living will is also known as an advanced directive, is a legal document that outlines what you want to happen if you are permanently unconscious, incapacitated, or terminally ill.

If you're in a coma, do you want to be kept on life support? If so, for how long?

What are your preferences when it comes to feeding tubes, hydration, pain medication, and medical interventions?

Who Should Have One?

Many young adults don't think they need to worry about creating a living will. They're healthy and have never had any serious medical problems. But the reality is tragedy can come at any age.

People can end up in a coma from car accidents, falls, and much more. These types of accidents don't discriminate based on age.

So, who should have a living will? The answer is easy: all adults should have one. Although being incapacitated is a scary thought to consider, being proactive can protect your medical desires in these situations.

What Happens If You Don't Have a Living Will?

So, what happens if you become incapacitated and you don't have a living will?

Here are a couple of issues that can arise.

Family Could Argue

You may have heard the tragic story of Terri Schiavo. She was in a coma and being kept alive via life support.

Her husband argued that he and Terri had discussed her wishes before and she had said she wouldn't want to be kept on life support. Her parents, however, argued she would not want to be taken off life support.

Terri Schiavo did not have a living will, and this argument went on for 15 years. She was taken off life support in 2005.

This 15-year argument could have been avoided if a living will had been created.

You May Be Given Treatments That Go Against Your Beliefs

Deciding to stay on life support or not is more than a personal preference for some people. It may go against their religion and what they believe in.

If you have strong beliefs about medical intervention, it's incredibly important to have a living will.

How Do You Create the Living Will?

So now that you know it's important to create your living will, how do you do it?

You can get the living will form from an estate attorney. You'll then want to work with the attorney to outline what your wishes are if you become incapacitated. The attorney will help you make sure you cover all of your bases so your wishes are known.

Don't Leave It up to Chance

There's no doubt that creating a living will is important for all adults. You never know when tragedy might hit, and you don't want to be left without any say in medical decisions.

Are you ready to write your living will? Contact us today!

Updating a Will: Issues to Consider

Situations that Indicate it Is Time to Make a Change

Updating a will is necessary any time there is a major change in your life. Keep reading to learn some of the most common reasons it is time for a change.

Keyword(s): updating a will

45% of Americans have a living Will as opposed to the 55% who don't. So applaud yourself for being a part of the 45% who cares about the future of their estate.

But life experiences change things and so should your estate plan. You need to know when to update your will.

Taking the time to sit down with a legal advisor to get your papers in order adjures respect. A will puts you in a position to secure a future for your children or loved ones.

It reduces familial conflict in the advent of your death. And, it safeguards all you've worked for—assets like finances, property, and valuables.

If you've had a change in your life and are unsure how to proceed, you need to read this. Learn here some of the most common reasons for updating a will.

Updating a Will After a Death Is Common

Most people stipulate a spouse or their children as first recipients in a will. But that changes when someone you've named passes away.

Every will should list a backup for every named person or entity in it. So if someone proceeds you in death, those stipulations are before noted. But in hindsight, that's never the case.

If you lose a spouse or child, you may want to pass your assets down to another relative. It's a smart idea to review and update your will in the case of a named beneficiary's demise.

In the same process, add additional heirs to avoid revisions for this reason in the future.

Marriage and Divorce

According to recent statistics, one in four marriages fail. If a previous spouse was the original beneficiary, it's time to update your will.

Most people cringe at the thought of leaving their assets to an ex in the event of a divorce. Doing so gives that individual certain rights. Plus you risk giving them the opportunity to contest your will.

If you've gotten a recent divorce, sit down with a legal advisor to discuss ways to amend your will.

Marriage denotes the same. Unless specified in another legal document like a prenup, update your will when you get married. Amending your will to include your spouse means they get their fair share of the assets you leave behind.

Update in Laws

As much as we want them to remain the same, laws are almost never set in stone. Amendments and updates happen all the time.

Wills abide by certain tax laws in each state. Yours is no exception. In recent years there have been drastic changes to provisions within estate tax laws. Forgoing the opportunity to bring your will up-to-date with tax law, could result in your assets getting tied up.

Check the date of your will. If you signed it more than five years ago, it's time to revisit it for a possible update.

Different circumstances in life call for revisions to an estate plan. Updating a will for a life change protects your assets and your loved ones.

Pull out a copy of your existing will and then speak with a trusted legal professional about whether you need to modify or make changes to do. Seek proper advise about updates to your estate plan.

Put your affairs in order. Contact us today for help understanding estate tax law.

What Is an IRA Beneficiary Trust and Do You Need One?

Time isn’t on your side. You’ll work and save your entire life to reach retirement. But as you age, your likelihood of death within the next ten years goes up.

By the time you reach retirement age, your chances of dying within ten years hit 30%. You need to prepare for that eventuality. Do you really want to roll the dice on your retirement savings?

The best way to ensure your retirement goes to your loved ones instead of the government is through an IRA beneficiary designation trust. Today we’re going to cover what that means and why exactly you need one. Let’s dig in.

1. What in the World is a Beneficiary Designation Trust?

If you were to leave your entire life savings to one person who would it be? What happens if they die? Do you have anybody else?

Commonly, you’d assume that your beneficiary would and should be a person. But this isn’t always true. You can leave your IRA savings to an (almost) immortal trust.

A trust is a third-party financial agreement. It’s something people use to control their wealth, protect their assets, and keep certain aspects of their financial situation private.

You can specify the terms of most trusts designating to whom your assets go and when. You can set up a trust that keeps your assets accessible in your lifetime and then passes access to another person. The third party is often a bank, a board of trustees, an attorney, or all three.

An IRA beneficiary trust is a trust you create to specifically control your retirement savings after you die.

2. The Rules of a Non-Person Beneficiary

If you’re not naming a person as your beneficiary, you will have to follow slightly different rules. For example, since the trust is essentially immortal, the final beneficiaries can’t use the life expectancy method to determine post-death pay-out if the owner dies before the required beginning date.

If that happens, your trust must disperse funds within 5 years rather than over the lifetime of the named beneficiaries.

The trust must be valid and under state law.
It’s an irrevocable contract (often, this becomes true at the owner’s death).
The trust must name identifiable beneficiaries.
To begin dispersing funds, whoever is in charge of the trust must provide documents to the IRA custodian by October 31 following the IRA owner’s death.

3. Why a Trust Instead of a Person?

Someday, you might be the rich uncle or aunt stereotype. If you are going to acquire a large amount of wealth or you suspect you will, a trust might be a good option.

Ask yourself this, do you trust your relatives (or friends) to spend your retirement savings wisely? It’s a tough question because you want to trust your relatives or friends. But some people just burn a hole in their pocket with money.

A trust gives you the peace of mind that your IRA savings will go toward what you want. For example, if your child or nephew or niece will eventually go to college, you can designate funds go directly to education.

If you’ve been through multiple marriages and your children are with different people, you might want to disperse funds accordingly. A trust will allow you to name both your current spouse and their children and your previous spouse and their children.

One such trust is called a qualified terminable interest property trust.

Be Sure Everyone is in Agreement

A beneficiary designation trust could be an effective wealth-planning tool. But be sure everyone involved, including the trustees, the attorney, and the IRA custodian all agree on the provisions and laws surrounding the trust.

If they don’t agree, the process will become long and more complicated than it needs to be. If you need help setting up an IRA trust, contact us. We’ll make sure everything works out in your favor.

3 Benefits of a Revocable Living Trust

3 Outstanding Benefits of a Revocable Living Trust

Understanding Your Options: 3 Outstanding Benefits of a Living Trust

Creating a revocable living trust is a great way to start your estate plan. Learn more about the benefits of a living trust and how it can help your estate.

Keyword(s): benefits of a living trust

According to Forbes magazine, over half of all Americans do not have estate planning in place.

The end of life is inevitable and it is important that you plan for it. However, it can be difficult to decide how you want to handle the transfer of your assets to your beneficiaries.

If you have been considering getting a revocable living trust to handle your assets, then it is a good choice. This is because it allows for a smooth transition of your assets when you pass away.

A revocable trust is speedy, secure and difficult to contest. If these benefits seem like just what you were looking for then read on to fully understand the benefits of a living trust.

1. Avoid a Probate

One of the best benefits of a revocable living trust is that it avoids probate once you have passed on. Whenever a will is made to distribute your assets, it will have to go through the courts upon your death.

After the probate, your assets will be distributed to your beneficiaries according to the stipulations in your will. Probate for a will can last months and sometimes years.

However, a living trust will see your desired beneficiaries getting hold of the assets you want them to have quickly through the help of a trustee. Sometimes, in a matter of weeks after your death.

2. Protection of Assets Should You Become Incapacitated

One of the major benefits of a living trust is asset protection should you become mentally or physically incapacitated. This is different from a will which only looks to protect your assets at death.

When you set up your trust you can even set up the guidelines for how your mental incompetence will be determined. You can specify that your doctor or a team of doctors be consulted to make this judgment.

Once you get a diagnosis of incompetence, your successor trustee will step in and take over the duties involved in managing your estate.

3. It’s Harder to Contest

Do you anticipate that people will be unhappy with how you choose to distribute your estate? If your answer is yes, then a living trust will provide you with protection.

A living trust requires your ongoing participation. You will need to transfer funds and property to the trust in order to fund it.

This is usually done when you are in good health and a sound frame of mind. This makes it harder to challenge your competency upon death, thereby making it harder to contest a living trust.

Final Thoughts on the Benefits of a Living Trust

The benefits of a living trust give you peace of mind and this is what makes it a wise choice for estate planning. The last thing you want is for your desired beneficiaries to have to go through a lot of issues when the times comes for them to receive benefits.

When you create a living trust you make the transition of your estate a smooth process for your loved ones. You also protect them from anyone who might want to contest your final wishes.

If you would like more information on managing your estate, please contact us.

Texas Estate Law