What Happens to My Stuff If I Die Without an Estate Plan?

TL:DR Summary: If you die in California without an estate plan, intestate succession laws mean your assets could be distributed to relatives you wouldn’t have chosen. Creating a personalized estate plan ensures that your wishes are followed, your assets are protected, and your loved ones are cared for.

When you think about the future, it’s natural to wonder, “What happens to my stuff if I die without an estate plan?” Most people want to ensure that their belongings, assets, and memories are passed on to the people who matter most to them. But what happens if you don’t have a plan in place? The truth is that dying without an estate plan in California can lead to a complicated and costly process for your loved ones, and it may not result in the outcome you would have chosen.

If you haven’t created an estate plan, you might assume that your loved ones will automatically know what to do with your assets. Unfortunately, the laws governing estates don’t work that way. In this post, we’ll break down exactly what happens when you pass away without an estate plan in California and why it’s so important to have one in place. 

What is Estate Planning, and Why Does it Matter?

First, let’s clarify what we mean by “estate planning.” Estate planning involves arranging for the distribution of your assets after you pass away, including personal property, real estate, bank accounts, stocks, bonds, investments, retirement accounts, life insurance, business interests, digital assets, family heirlooms, and anything else you own.  

Estate Planning typically includes drafting a will or trust (sometimes both), establishing powers of attorney, creating healthcare directives, and more. A good estate plan ensures that your wishes are followed, your family is protected, and your assets are distributed in the way you want. 

Without an estate plan, the state of California will step in and decide how your property is distributed, which can result in outcomes that may not align with your wishes. Let’s take a closer look at what happens to your assets when you don’t have an estate plan in place.

What Happens to My Property if I Die Without a Will or Trust?

In California, when someone passes away without an estate plan (i.e., intestate), the state will apply “intestate succession” laws to determine how your property is distributed. These laws set out a default order of inheritance based on your family structure. While it may seem straightforward, it’s important to understand that the state’s plan may not match your personal wishes.

Here’s a quick look at how California intestate succession laws divide assets:

1. If You Have a Spouse and Children:

• Community Property: Any property acquired during your marriage is considered “community property” and will automatically go to your surviving spouse.

• Separate Property: Property that was owned before marriage or acquired during the marriage as a gift or inheritance will be split between your surviving spouse and children. In most cases, the surviving spouse receives one-third, and your children inherit the remaining two-thirds.

2. If You Have Children but No Spouse:

• All of your property will be divided equally among your children. If your children are minors, a court-appointed guardian will manage their inheritance until they reach adulthood.

3. If You Have a Spouse but No Children:

• If you have no children, the surviving spouse inherits your estate in its entirety.

4. If You Have Neither Spouse Nor Children:

• If you don’t have a spouse or children, the estate passes to your parents, siblings, nieces and nephews, and potentially other distant relatives. If no family members can be found, the state of California may eventually claim your estate.

The key takeaway here is that California’s intestacy laws do not take into account your personal preferences. Your estate might not go to the people you intended, and assets could be distributed to relatives you might not have considered. It’s a system designed to ensure that someone inherits your estate, but it’s not designed to meet your individual needs or values.

The Process of Probate Without an Estate Plan

Probate is the legal process through which a court validates your will (if you have one) and oversees the distribution of your assets. If you die without an estate plan, your assets will go through the probate process even if you don’t have a will or trust. This can be a long and expensive process for your loved ones.

Here’s how probate works in California for those without an estate plan:

• Court Appointment: A Probate Court judge will appoint an administrator to handle your estate. This person may be a family member, but they must apply to the court to be appointed, and it’s not guaranteed that the person you would have chosen will be appointed.
• Public Process: Probate is a public process. This means that anyone can access information about your estate, including the value of your assets, debts, and the distribution process. This lack of privacy may be concerning for some families.
• Cost and Time: The probate process can be expensive, as court fees, attorney fees, and other costs accumulate throughout the process. The average probate lasts 18 months, but if complications arise, your loved ones could be left waiting years to receive their inheritance.
• Lack of Control: Without an estate plan, you have no control over who manages your estate, who receives your assets, or how long the process will take. If you have specific wishes, like leaving a portion of your estate to a charity or providing for a family member with special needs, the state’s default rules won’t account for these preferences.

Special Considerations: Property in Other States and Business Interests

If you own property in other states, your estate will go through a separate probate process in each state where you own property. This adds even more complexity and cost to the administration of your estate.

Similarly, if you own a business and die without a succession plan, your family will have little control over how your business is run after your passing. Without a plan in place, the state will have to make decisions that may not align with your wishes or the best interests of your business.

California’s Incapacity Laws

While this article primarily focuses on what happens to your physical property after your death, it’s also important to consider your healthcare and financial decisions while you’re still alive. If you become incapacitated and can’t make decisions for yourself, California law allows you to appoint someone to make decisions on your behalf through two important documents:

1. Advance Healthcare Directive: This allows you to designate someone to make medical decisions for you if you’re unable to make them yourself. You can also specify your preferences for end-of-life decisions such as life support, pain medication, and organ donation.

2. Durable Power of Attorney for Finances: This designates someone to manage your financial matters if you become incapacitated. Without these documents, family members may need to go to court and seek a conservatorship to gain control over your healthcare and financial decisions, which is expensive, time-consuming, and emotionally taxing.

Why You Shouldn’t Rely on Intestate Succession Laws

If you die without an estate plan in California, your loved ones will likely face unnecessary stress and costs. In addition to the complications of probate, the state’s default succession laws may not distribute your property the way you would have wanted. To ensure that your wishes are honored and that your family is taken care of, it’s essential to create a comprehensive estate plan.

An estate plan allows you to:

• Choose who will inherit your property, whether it’s your spouse, children, friends, or a charity.
• Designate who will make healthcare and financial decisions for you if you become incapacitated.
• Minimize the time and costs associated with probate.
• Keep your affairs private.
• Provide for minor children or special needs family members.
• Protect your business and ensure its continuity.

How Goff Legal Can Help You Create an Estate Plan

If you don’t have an estate plan in place or if it’s been a while since you last updated yours, now is the perfect time to take action. At Goff Legal, we understand that estate planning can feel overwhelming, but we’re here to make the process easy and understandable. Our team of experienced estate planning attorneys will work with you to create a customized estate plan that reflects your wishes and provides peace of mind for you and your loved ones.

Ready to get started? Contact our law firm today to schedule your free discovery call and begin planning for the future.

FAQs:

-How long does the probate process take if I don’t have an estate plan?

The California probate process can take anywhere from 12-18 months or longer, depending on the complexity of the estate. During this time, your assets are frozen, and your loved ones may have to deal with court hearings, attorney fees, and other expenses.

-Can my family avoid probate without an estate plan?

Unfortunately, if you die without an estate plan, your estate will likely go through probate for some period of time, unless your only assets are held in joint tenancy or certain beneficiary designations are in place (like life insurance or retirement accounts). Very small estates may be able to file a petition for an abbreviated, simplified probate proceeding. But if you wish to avoid the California probate court entirely, a revocable living trust is typically the best way to do this.

-How much does an estate plan cost in the Roseville, CA area?

The cost of estate planning in the Roseville, California area can vary widely based on several factors, including the complexity of your estate, the specific documents you require, whether you’re single or married (due to the number of documents required), and the attorney you choose. A will-based estate plan will be less expensive than a trust-based estate plan. A comprehensive trust-based estate planning package for a married couple typically costs between $2,500-8,000, with an average of $5,000. 

-How long does it take to create an estate plan?

The timeline for creating an estate plan can vary depending on the complexity of your estate, the types of documents you need, how quickly you communicate with your attorney, and the workload of the attorney you hire. Typically, from the date of your initial consultation, assuming no delays in communication or getting your attorney the information they need, the total process takes an average of 2 months. If you have a tighter timeframe or an urgent matter, communicate your needs to your attorney and see if they can accommodate them.