If you do not plan your estate, negative consequences are likely to take place after you die. You lose all control of the outcome when you fail to execute a last will or a trust of some kind. On the other hand, if you are proactive about the implementation of an estate plan, you control the way that your assets will be transferred after you pass away.
The Condition of Intestacy
The condition of intestacy will result if you were to pass away without executing the appropriate estate planning documents. Each state has its own laws of intestate succession. If you were to die intestate as a resident of our state, the court would determine how your assets are distributed using Michigan’s succession rules.
Generally speaking, your closest relative or relatives would inherit your assets, but there are specific parameters. We will share some of them with you here.
If you were to pass away with children still living but no living spouse, your children would inherit all of your intestate property. You spouse would be only inheritor is he or she survives you and you have no children or parents still alive.
This would be contrary to the wishes of most people, but your spouse would have to share your intestate assets with your parents if you predecease them. The first $150,000 of your intestate property would go to your spouse along with three-fourths of the remainder. Your parents would get the rest.
Your siblings would inherit everything if you were to pass away without a living spouse, parents or children.
There are those who pass away intestate without having any relatives still alive. In fact, a landmark intestacy case began in the state of New York in 2012. Roman Blum died in January of that year at the age of 97. Throughout his life he was a very successful real estate investor. He amassed an estate that was valued at approximately $40 million at the time of his death.
He did not execute an estate plan, though he was made aware of the consequences of inaction by people who were close to him.
The state of New York appointed a personal representative to handle the business of the estate. The representative was given the authority to engage genealogists. They have been searching for a relative, and some have come forward, but they have failed to prove their case. As of 2019, the state was still in possession of the intestate estate.
Create a Will at Minimum
You should certainly take the time to create a last will at the very least. If you do create a will to state your final wishes, you would want to nominate an executor in the document. The executor of an estate is an estate administrator. This nominee would ultimately handle the business of the estate after your passing.
Many people think that the position of executor is largely an honorary post that is bestowed upon someone who was held in high esteem by the decedent. The executor may well have been highly regarded by the decedent, but it is far more than an honorary position.
Let’s look at some of the responsibilities that the executor must handle during the estate administration process.
Proving of the Will
Some assume that the executor can follow the instructions left behind in the last will and distribute assets right away. In reality, this is not the way that it works. Before anyone can receive inheritances, the executor must admit the will to probate.
During probate, there is a proving of the will. The court examines the will to make sure that it is in fact valid, and challenges could be presented before the court during probate.
The executor must identify and inventory the property that will ultimately be transferred to the heirs in accordance with the wishes of the decedent. This can be easier said than done under some circumstances.
If the decedent did not leave behind a very detailed accounting, it can sometimes be difficult for the executor to identify all of the property.
Appraisals and Liquidation
Once all of the probate property has been identified, it must be prepared for distribution to the heirs. This can involve appraisals and liquidation, and property does not necessarily sell overnight. As a result, the liquidation process can be quite involved.
The executor is going to be the point of contact for anyone who is doing business with the estate. This can include attorneys, accountants, appraisers, liquidators, and the probate court itself. People who are named in the will may also have questions along the way.
Because all of these business-oriented tasks must be completed during probate, you are going to want to look for a business savvy individual when you are nominating an executor. You should ideally nominate someone who lives nearby so that this business can be efficiently conducted.
Longevity is another concern, so you should consider the age of the person that you are nominating.
Plus, the executor should be a level-headed person who is an effective and patient communicator.
Lastly, this can be a time-consuming and demanding position, so you should be certain that the person that you want to nominate is willing to act as the executor.
Attend a Free Seminar!
If you would like to learn more about important estate planning topics like this one, attend one of our seminars. There is no admission charge, and you can visit this page to obtain all the details: Mount Clemens Estate Planning Seminars.