Surveys have shown that many American adults — perhaps as many as 60% — do not have a will or any plan for their estates. Many people think they’re too young for estate planning, or that they don’t have enough property to make the process necessary. Many more simply don’t know where to begin.
But every adult should have some kind of estate plan. One of the best ways to explain why is to talk about what happens when a person dies without an estate plan.
The probate process
When a person dies, their property is known as their estate. Estate administration is the process of settling an estate, paying off any remaining debts and distributing assets to their heirs. A will appoints a personal representative to oversee the process gives them legally binding instructions on how to distribute the assets.
If a New York resident dies without a will, the probate court must oversee the administration of the estate. First, the court appoints a person (usually a relative of the estate) to administer the estate. Once they have taken care of any remaining debts and taxes, this administrator must distribute the remaining assets according to the state’s law of intestate succession. This law uses a somewhat complex formula to distribute the estate’s assets to the deceased’s nearest of kin.
Surviving spouse and children
First, if the deceased left behind a surviving spouse and no children, the spouse receives everything. Things get a little more complicated ff the deceased has a surviving spouse and surviving children or grandchildren. In this case, the spouse receives the first $50,000, and the remainder is divided with half going to the spouse and half to the descendants.
If the deceased has no surviving spouse but does have surviving descendants, the estate goes to the descendants. At first, this sounds straightforward enough, but it can get complicated depending on the familial relationships and generations involved.
If the only surviving descendants were the children of the deceased, they split the estate equally. Now, let’s say the deceased had two children, each of whom had two children of their own. If the adult children of the deceased are still alive, they split the estate equally. But if one of these adult children has died, then their share must be split among their children.
Of course, many family trees are not so simple. The intestate succession formula can get very complicated depending on the relationships involved, and particularly when dealing with mixed families,
None of this is easy on the administrator of the estate. It takes time and generates fees. This money comes out of the estate, meaning there’s less to go around when it comes time to distribute to the heirs.
So, as you can see, it saves money and spares your loved ones a lot of frustration if you make your wishes known in advance through drafting a will.