What Happens When You Die Without a Will

The majority of people in the United States do not have a will. In most cases, this leaves a mess for the family to deal with after a loved one dies. Here’s what the scenario may look like.

If you die without a will (called “intestacy”), New Jersey law decides how your estate will be divided. The law may mirror your wishes but many times it will not. For example, if you die with a spouse and one or both parents still living but you have no children, your spouse will have to divide your estate with your living parents. If you die with a spouse and children (but some of your children are from a prior marriage), your spouse will get the first 25% of your assets (but not less than $50,000 nor more than $200,000) plus ½ of the balance and your children divide the remaining assets.

When you die with a will, you decide who will act as the executor (the person who carries out your wishes as expressed in your will). If you have no will, any relative can be appointed as the executor. And the court will require that person to pay a premium for a surety bond to ensure his honest performance. Your will can require that no surety bond is required.

If you die without a will and your children are minors, the court will appoint a guardian for your children and their assets. This may not be the person that you would want to raise your children and it might not be the person you would want to handle their money. The guardian appointed by the court needs the court’s permission to take certain actions, so he will be paying lawyers’ fees and court costs every time he needs to go into court. This can be time-consuming and expensive. This is true even if your spouse if the guardian of your children’s inheritance.

If you die without a will, your children will inherit their money when they turn
18. A will would allow you to postpone them getting their inheritance until they are older and more responsible about money.

When you do not consult an estate planning lawyer, you generally do not learn about different estate tax avoidance methods. Did you know that New Jersey law does provide for a state estate tax? The asset level for owing New Jersey estate taxes is $675,000 and up.

No one seems to like thinking about his/her death or spending the money on consulting a lawyer. But, in the end, not consulting a lawyer to write the will that you want and making sure it’s written in accordance with New Jersey requirements will cost your family thousands of dollars more than doing it the right way now.