The Procrastination PageWhat is procrastination? It is defined as "putting off something until a future time."
What if someone procrastinates about getting a will or trust, and then dies without an estate plan? There are several problems that may occur, including:
1. Higher estate taxes. The estate might have to pay estate taxes that could have been avoided with an estate plan. As a result, heirs and beneficiaries will receive substantially less from the estate. For further details, click here: Federal estate taxes
2. Probate. The estate may be stuck in probate for a year or more, and inheritances will be delayed. Statutory probate fees are expensive, and that expense could have been avoided with a living trust. Click here for more information: Living Trusts and Probate
3. Intestate succession. When someone dies without a will in California, the laws of intestate succession are used to determine who will receive the assets of the estate. In general, the deceased person's nearest relatives will inherit the assets. If that person wanted some other person or charity to receive all or part of the estate, those plans cannot be carried out. For a detailed discussion of intestate succession, click here: Dying without a will
4. The surviving spouse may not inherit the entire estate. Many people believe that if they die without a will or trust, their spouse will inherit what they owned. This is true for community property, but the surviving spouse will inherit only half or one-third of the separate property of the other spouse in the following circumstances if there is no will:
a. The spouse will receive only half of the separate property of the other spouse if the first spouse to die is survived by one child, or the issue of one child, or by a parent, or the issue of a parent.
b. The spouse will receive only one-third of the separate property of the other spouse if the first spouse to die is survived by more than one child, one child and the issue of a predeceased child, or the issue of two or more predeceased children.
5. Guardianship of minor children. A will is a good place to nominate guardians for children who are under 18 years old. If both parents are deceased, someone will have to petition the court to become the guardian of the children. Most people should let the court know, through their will, who they want to serve as guardian, rather than leaving the issue up in the air.
6. Trusts for children. A will or trust can set up a trust to provide funds for the support, education, and other expenses for young people. If there is no will or trust, any trust that is set up by the court will probably end at age 18, leaving a young person with a windfall inheritance that may soon be spent. A will or trust can provide a much higher age for distribution of the trust, and can also specify the terms of the trust and who the trustee will be.