Who Gets Your Assets if You Die Without an Estate Plan?
Whether you like it or not, everybody in California needs an estate plan. If you've failed to prepare actual estate planning documents, then it means that you are relying on the body of California law to dictate who will receive your property. Here's an overview of how some of your assets will get distributed:
- Joint Tenancy assets automatically pass to the other joint tenants when you pass away.
- Community property with right of survivorship is a special way of owning assets available to married couples and registered domestic partners. When one of the spouses or partners passes away, the other one automatically becomes the owner.
- Assets with beneficiary designations automatically go to the beneficiaries that you've named on those accounts. A couple of common examples include life insurance and retirement accounts.
- Assets held in a trust get distributed based on the terms of the trust document.
If you die owning assets that are not subject to immediate transfer when you pass away and you have no Will in place, those assets are distributed according to the laws of "intestate succession." Under this statutory framework, these assets get distributed to your "heirs" (this is the legal term for people who would inherit from you if you had no Will and is generally comprised of your closest family members).
With a few exceptions, assets that are subject to the laws of intestate succession generally have to be "probated." Probate is a court-supervised process to make sure that your debts are paid off and your assets get distributed to your heirs. It can be a very expensive and time consuming proposition. For many Californians, avoiding the arduous process of probate is their primary goal in preparing an estate plan.