Do you know what happens after your death when you have not completed an estate plan or the estate plan that you have is not effective? If you don’t have an estate plan, the State of California has one for you. It’s called intestacy, and it is governed by a series of laws in the
California Probate Code.
In this case, unless your total estate is worth less than $150,000, your loved ones will have to file a petition in the Probate Court. If you have questions about what specific assets would be included in this calculation, please consult an attorney or financial advisor with knowledge in this area.
Administering an intestate estate (one with no estate planning or ineffective estate planning) is much like administering a probate estate where there is a simple Will (no trust.)
Your loved ones will have to go through the court process which takes typically six months to one year in Southern California currently. The Petition will ask the judge to appoint someone as the administrator of your estate, to collect your estate assets, to pay off your debts and then distribute the remainder to the beneficiaries outright at the end of the court case. Your administrator will have very little authority to take actions without the judge’s approval.
The biggest difference between an estate with no Will and one with a simple Will is that if you have written a Will, you have the opportunity to choose who will inherit your assets and who will manage your estate. In an intestate estate, the people who inherit your assets are called your beneficiaries, and the people who manage your assets are called your administrators.
If you are married when you die, your spouse would be your beneficiary and your administrator. If you do not have a spouse when you die, your children would be your beneficiaries (in equal shares), and one would be your administrator. If you have neither spouse nor children, your parents would be your beneficiaries and your administrators, and if you have none of those when you die, your siblings would be your beneficiaries and one would be your
administrator. The scheme continues from there.
A properly drafted and executed estate plan allows you to name your chosen beneficiaries. It
allows you to determine the amount of your estate that goes to each chose beneficiary. It allows you to choose who will best manage your estate and whether they will receive a fee for doing so. Most importantly, though, a proper estate plan can help in emergency situations or during your senior years if you are no longer able to manage your affairs on your own.
Originally published by Susan on March 6, 2013.