If I Don’t Have an Estate Plan, Will My Money Go to the State?
In most cases, no. The state will make every effort to find your heirs, and most likely, some of your relatives will receive your assets. However, you will not have any control over who gets what or how much, so you’re better off making a will to make your wishes known. This allows you to determine how assets are divided on your own terms, not the state’s (we’ll discuss how New Jersey divides assets later in this article). Creating an estate plan also allows you to consider issues like end-of-life care, an advance directive, and power of attorney. Additionally, you and your lawyer may discuss options like setting up a trust that may protect your assets while you’re alive in some situations. In certain cases, your estate planning choices could also help reduce inheritance taxes for your heirs.
At the Van Dyck Law Group, we use our expertise in estate planning to help clients with various future planning needs, including wills, trusts, and long-term care plans. We offer consultations if you have questions about the various options that may be available to you. Please contact us if you have any questions or concerns about updating or creating an estate plan.
Here are some frequently asked questions about wills and estate planning:
What Happens If You Die Without a Will?
The state of New Jersey has a complex list of guidelines for how assets are inherited when a person dies intestate, or without a will. This is known as intestate succession.
There are some additional statutes that may apply in some cases, and some situations don’t quite fit into these guidelines, but in general, the court distributes assets using these rules:
- If the deceased had children but no spouse, the children inherit everything.
- If the decedent had a spouse, but no children or parents, the spouse inherits the estate.
- If the deceased was married and had children only with their spouse, who had no other children, then the spouse inherits everything.
- Things become more complicated if the deceased or the spouse has children from other relationships. In these situations, the estate is divided among the spouse and descendants in specific percentages based on the exact relationships.
- When the decedent had no children, but both their spouse and their parent or parents are still alive, the spouse inherits much of the estate but the parents also receive a percentage.
- If the deceased had no spouse or kids, their parents will inherit the estate if they are still alive.
- When the decedent’s parents are deceased and they have no spouse or descendants, their siblings will inherit.
- If the decedent had no living spouse, children, parents, or siblings, the state will seek out other relatives like aunts, uncles, or cousins. Most people have at least a few distant relatives, but in rare cases, if no family can be found at all, the estate will go to the state.
Does Intestacy Succession Cover All My Assets?
Probably not. Remember that these rules only apply to assets that would have been accounted for in your will. Here are some situations where assets would not pass through a will, and therefore would not be inherited by intestacy succession:
- Any money or property you’ve transferred into a trust will not pass through a will. Your lawyer can answer your questions and help you determine if a trust may be helpful for you.
- Life insurance policy benefits don’t go through the will.
- Retirement account funds like an IRA or 401(k) don’t go through the will.
- Bank or other accounts set to “transfer on death” or “payable on death” do not need to go through the probate process.
- Co-owned property with joint tenancy will pass to the co-owner.
In all of the above situations, the beneficiary or co-owner will simply receive the assets without having to go through the probate process.
How Can Will and Estate Planning Help Me?
Making a will and taking other steps to plan your estate empowers you to choose how your assets are divided after you pass. Many people don’t want their estate distributed according to the state’s rules. They may have specific relatives they don’t want to receive anything, or other relatives they believe should inherit more. Often, clients don’t even realize all the decisions that they need to make until they begin the planning process. To prepare for a consultation with an estate attorney, we recommend doing the following:
- Make a list of your assets and how you would like them distributed after your death.
- Write down any particular concerns you have. This may include things like, “I want this property to stay in the family and go to my children, but I want my spouse to be able to live in it until they pass.” Or, “I want to ensure this specific relative doesn’t inherit from my estate.”
- Consider who you would want making medical decisions for you if you were unable to do so yourself.
- Think about what you want your end-of-life care to look like if it becomes necessary, and if there are any particular treatments or procedures you want to avoid.
- Also, consider who you would want to put in charge of financial or business decisions if you were incapacitated.
- If you have minor children, decide who you would like to appoint as their guardian if you and their other parent are both deceased or incapacitated. Have a conversation with this person, explain your wishes, and ask if they are on board with the possibility of raising your child if something were to happen to you.
When you meet with your estate planning lawyer, they will ask you about these topics. Being candid and open in your answers will help them to recommend the best options for your goals.
If you’d like to learn more about estate planning or start working on your plan, please contact Van Dyck Law Group for a consultation at 609-580-1044. We’ll learn about your situation, outline the options for accomplishing your objectives, and when you’re ready to move forward, we’ll assist you with the next steps.