Dying Without a Will Leaves a Mess Behind
BY ASHLEA EBELING
Despite potentially devastating consequences for their heirs, millions of Americans still haven’t written a will. Some 54% of surveyed Americans told Gallup they didn’t have a will in 2021. Even the wealthy put off estate planning: One in five Americans with investible assets of $1 million or more don’t have a will, according to a recent Charles Schwab survey. If you die without a will, a range of state laws dictate who gets your assets, and your loved ones may get nothing. They might get kicked out of the family house and could face hefty surprise tax bills.
Grief and hassle
John Powers, of Auburn, Wash., and his live-in partner of 18 years, Christina Lewis, had an appointment with an estate lawyer to draw up wills in November, but she died in a horseback-riding accident the weekend before. The consequences of dying without a will—the legal term is intestate—come down to where you live. What Ms. Lewis, age 64, might have written in her will didn’t matter. Instead, Washington state’s intestacy laws decided. While grieving, Mr. Powers, 62, had to get Ms. Lewis’s sons who live in England to sign off so he could be appointed by the local probate court to administer her estate. He said she wanted him to have both the $600,000 house and Volkswagen SUV they bought together, but by law her sons were entitled to her 50% interest, so he had to buy them out to keep his home and car. “It’s been quite a struggle,” Mr. Powers said, who made sure in February to get his own will finished.
Dying without a will is especially painful if there are unmarried partners or stepchildren, who are left out under the law in almost every scenario. Without a will or trust, you’re giving up the opportunity to say who will administer your estate, who will be a guardian for minor children, and who will get what. “Don’t assume that what you think will happen when you die without a will or trust is what actually will happen,” said Toni Ann Kruse, a New York City estate lawyer.
Here’s what to know and how to avoid the worst.
Know your state law
Kurt Nilson, a lawyer in Johnstown, Pa., has been keeping track of intestacy statutes as a hobby for decades and developed online calculators at heirbase.com where you can enter your family information to see what might happen if you die without a will. If there is a surviving spouse and children, the surviving spouse gets 100% of the estate and the children get nothing in some states. In other states, the percentage split varies. In Tennessee, a surviving spouse with two or more children gets a third of the estate, with the rest split equally among the children. In Pennsylvania, if there are no children but a surviving parent, the surviving spouse gets the first $30,000, with the balance split 50%-50% with the parent. The way people want to distribute their assets is often at odds with the law, a survey of 9,000 Americans conducted by two Yale law professors found. Nearly 30% of people who were married with children said they would prefer to leave their spouse nothing, co-author John Morley said.
Many would like to leave substantial assets to their live-in nonmarital partners. And many would prefer to give much less to parents than intestacy laws provide, and much more to siblings.
Cover all assets
Retirement accounts and life-insurance policies pass to whomever is listed on a beneficiary form. If you leave it blank and don’t have a will, the state law will typically apply. Mr. Powers got a life-insurance payout because Ms. Lewis’s policy listed him as the beneficiary, and her sons got her 401(k)—with a big tax bill for the lump-sum distribution— because the account listed no beneficiary. Any real estate or bank accounts listed only in the name of someone who dies without a will are distributed based on the state’s intestacy rules. If you don’t have a will and want to make sure a partner gets your house or bank account, use a transfer-on-death deed or a payable-on-death account.
Jotting down your wishes isn’t going to be good enough.