Each year on the 4th of July, we celebrate our country’s independence. But only about one-third of Americans have an estate plan - meaning that two-thirds of Americans have given up their independence when deciding what will happen to them should they become incapacitated and what will happen to their property when they die.
If you don’t create your own estate plan, your state will create one for you. So: are you really independent if you’re letting the state decide what happens to you and your property?
Where will my money and property go?
Even if you have created an estate plan, the state will intervene if your plan doesn’t properly account for all of your money and property, or doesn’t provide for backup beneficiaries if your chosen beneficiaries pass away before you.
While each state’s laws may differ slightly on how your money and property are distributed at your death, in general, if you’re married, most (if not all) of your money and property will go to your surviving spouse. However, if you have children who aren’t also your surviving spouse’s children, usually some portion will go to your surviving spouse, and the remainder will go to your surviving children.
If you aren’t married, or your spouse has died before you, your money and property will go to your children. If you aren’t married and have no children, generally, your parents will receive your money and property. If you aren’t married, have no children, and your parents are both deceased, your siblings will probably inherit your money and property. The state also has laws that cover what happens if you have no living relatives.
However, most people know how they want their money and property to be divided after their death and to whom they want it to go. And for many, the people and relationships they want to include in their estate plan go beyond what the state’s plan anticipates.
Who makes financial decisions if I’m incapacitated?
If you become incapacitated and haven’t appointed someone to make financial decisions for you (through a financial power of attorney), the state’s plan commonly requires that a court appoint someone to make those decisions.
Whom the court appoints is generally based on who has priority under the state’s rules. Usually, the spouse has priority, followed by an adult child and then a parent. However, the person with priority may not always be the person you would have chosen.
Who makes medical decisions if I’m incapacitated?
If you become incapacitated and haven’t appointed someone to make medical decisions for you (through a medical power of attorney, advance health care directive, or similar document), the state’s plan commonly requires that a court appoint someone to make those decisions.
The priority order usually includes someone a court has appointed, a spouse, a child, a parent, a sibling, a grandchild, and so forth. Again, the person with priority may not always be the person you would have chosen.
Choose to celebrate Independence Day by taking steps to put in place or update an estate plan that will allow you to claim control of your and your loved ones’ futures. We’re here to help. Call Santaella Legal Group, serving all of California, at (925) 831-4840.
Read more:
Frequently Asked Questions About Estate Planning From Seniors
Why It’s So Important For Your Family to Have an Estate Plan