Dying Intestate is Costly; Here is How to Avoid this Innocent Mistake

Have you ever worried about how assets transfer to your loved ones if something were to happen to you? Many people are genuinely concerned at the thought of their loved ones going through a difficult probate process, and everyone's heard about how much of a problem this process can be. On the other hand, some people don't give it a thought, probably because they have no idea what it means to die intestate.

What does this mean exactly? Well, it's simple: dying intestate means you failed to properly execute your last will and testament. I'm going to illuminate some blind spots and help you avoid this innocent mistake. Stay tuned.

Welcome to another edition of We're Talking Money. I'm Phil Clark, founder and CEO of OmniStar Financial Group, and today we're talking about dying intestate.

Now, what is dying intestate versus dying testate? Going intestate means you're leaving your estate in the hands of a court. That means that you didn't have a will. It also means that the distribution of any assets you owned will be determined by state law. That means it may not pass to those who would have otherwise inherited them had a will been in place. Now, that sounds really simple, and in some ways it is. I'm going to help you work through that.

Did you know that dying without a will can potentially disinherit your spouse? Some of you might laugh and say, oh great, well, and we all know that's a funny, but it could really happen. In fact, up to two-thirds of your assets in some states might go to your children, not your spouse. That means only a third goes to your spouse. Probably not what you intended.

On top of that, associated fees and taxes can arise from having an estate go through the probate process. That process can also take up to nine months, sometimes more. That makes it even more important to take steps to ensure that these potential consequences are avoided.

So what are the benefits of creating a will? Well, as you navigate through life, it's important to plan for the future of your loved ones. Most of us want to do that. One of the best ways to do it is creating a will that outlines your wishes. When you die intestate, meaning without a will, it means that your estate could be disposed of using state laws. That means the state writes a will for you. It's already written, by the way. It's a standard form, and it rarely reflects what you intended.

With a will in place, all assets are accurately inventoried, and they can be transferred according to your exact wishes, not the state's. Additionally, depending on local laws, your beneficiaries may receive their inheritance much faster.

Now, you might be asking, who should I include in my will? When deciding, it's very important to think about the people and the organizations that you truly care about. What I mean by that is, in addition to your family members, it could be close friends, it could be mentors, charities that you would like to support. Now, this can help you honor everyone who has been a major influence in your life with the distribution of any property or assets. You're not limited here, but it does have to be in writing. It's also important to review your plans regularly as life circumstances change.

And don't forget, a will is just one document that you should be considering. Now, it may be the only one you need for estate planning, but depending on your circumstances, more complex documents such as trusts, they could be an improvement to your overall situation. So don't forget, it's not just a will. There may be other documents you need to add in order to truly fulfill all of the things that you want as it relates to your distribution of assets.

Now, how to protect your assets when creating a will is another great question. Even if you don't have extensive assets, and a lot of people think that they don't have enough assets to worry with a will or with estate planning, but even if you don't have extensive assets, it's still important to create a will, because certain items like sentimental possessions, stocks, annuities, other assets may only be distributed through a legal document like a will. Plus, having a will can save time and money, ensuring that each asset goes specifically where you designate. Again, if you don't designate it, you could be leaving it up to your state laws to designate it for you. But your attorney can certainly help you build a plan of action that considers all of your assets and how to best protect them.

And finally, I want you to know this is not a one-size-fits all. When it comes to estate planning, there is no one-size-fits-all and certainly no set it and forget it. It should be updated. But of course, people want to know, when should I update?

Keeping your will or other estate planning documents updated, it's an essential part of the planning process. Unfortunately, this task can be overlooked, and often it is, and this leads to confusion. It leads to conflict with your family as they try to sort out who gets what, and that's not what you intended. Now, OmniStar recommends reviewing your documents every two years and anytime a major life event takes place.

Despite being an unavoidable chapter in life, planning for the unknown can provide peace of mind. Creating a will, adding legal protection to your assets, these are very important things, and updating important documents are all great steps that you can take to ensure that your wishes are followed and everything is taken care of when the time comes.

If you aren't sure or feel like your existing documents need some adjustments, don't delay. This common mistake is easy to avoid, but it can only be avoided if you do it while you're alive. If you don't know where to start, reach out to us. One of our associates will be happy to help, and we can guide you in the direction to get you on the right track.

I hope this edition of We're Talking Money has inspired you to take a closer look at your estate planning. Something as simple as not having a will can create expensive and unintended consequences. If you enjoyed the content today, please like, share and consider subscribing to our channel, and don't forget to ring that bell so you never miss a great episode. I'll see you next time when we're talking money.

Thanks for joining us on We're Talking Money. If you'd like to learn more, check us out at omnistarfinancial.com. Subscribe to the show on YouTube, follow us on Instagram and Facebook. Tell us in the comments section what topics you'd like to hear in upcoming videos. If you enjoyed the show, give it a thumbs up and share it with friends.

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