“My estate isn’t big enough for me to have to worry about estate planning;” “My children know my wishes;” “I will take care of it when I am a little older.” The excuses for not preparing an estate plan are many. The reality, however, is that when one decides, for whatever reason, that an estate plan is not necessary that person has, in fact, created an estate plan by default.
In all likelihood, the state that you reside in has statutes in place that will determine what will happen to your assets, if you die without an estate plan in place. For example, in Illinois, the law of descent and distribution states that the assets of persons who die without an estate plan, who have both a spouse and children that survive, will be divided as follows: one-half to the surviving spouse and the other half to be divided in shares of equal value amongst the surviving children. In addition to the laws of descent and distribution, many people own assets in ways that will result in the assets passing automatically at the time of death to another person, or in other words, assets that will pass by operation of law. Some examples of assets that pass by operation of law are assets owned in joint tenancy with right of survivorship, assets that are payable on death (POD) to another person, and assets with designated beneficiaries. This means if you decide, for whatever reason, not to make an estate plan, you have, in fact, decided to let the laws of your state determine what will happen to your assets at your death. For many, the interplay between the laws of descent and distribution and the impact of assets passing by “operation of law,” will result in an estate plan that is contrary to, or different, than the plan that one would have put in place had he/she realized the impact of choosing not to create an estate plan.
Quite simply, the bottom line is that choosing not to make an estate plan is choosing an estate plan by default. It is choosing to let the laws of your state decide for you. One way to avoid unintended consequences is to consult with an estate planning attorney in your state, who will be able to educate you as to the laws of your state, and to assist you with creating an estate plan that is consistent with your wishes.
©Copyright 2012 by Constance Burnett Renzi. All rights reserved.
To discuss estate planning and/or elder law issues with an attorney, please call the Elder Law Center at 630-844-0065 or contact us via email. The Elder Law Center is located in Aurora, IL, Kane County, in the Chicago Western Suburbs.
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