What If You Don't Have an Estate Plan?

What happens if you don’t prepare an estate plan? The state of California has a default plan for you. But as Ronald Reagan said, “the nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'" 

Intestacy

Intestacy is the state of dying without a will. If you don’t have a will or a revocable living trust, then when you die, your assets will go according to the California Probate Code.

If you live in California, it goes like this:

• if you are married with no children and no immediate next of kin, your assets will go to your spouse.

• If you're married with no children, but you have parents or siblings, your spouse will receive your community property and half of your separate property. Your parents or siblings will receive the other half of your separate property.
  
  

• If you have children, your separate assets and your share of the community property will go one-half to your spouse if you have one child, and one-third to your spouse if you have more than one child. The rest will go to your children.

If you are not married and don’t have children, your assets will go to your next of kin in the following order:

• to your parents, if they are alive, then

• to your siblings, if they are alive, then

• to your aunts and uncles, if they are alive, then

• to your cousins, if they are alive, then

• to your crazy fourth cousin twice removed, if he isn’t alive, then

• to the state. Believe it or not (or course you can believe it), if there are no living family members, the state will take your assets. The legal term for this is “escheat” - your estate will escheat to the state.

You get the picture. If you don’t have a will or a revocable living trust which states how you want your assets distributed, you have what is called an intestate estate. Intestate estates are distributed according to the state probate code.