Most of us plan to make a will, at some point. Some of us even think that it might be a good ideas to put the house or cabin in a trust. If we have kids under 18 we may have even, before a trip, thought about who should act as guardians if the unthinkable were to happen.
But if we never get around to making that will, then what does happen if we don’t legally document our wishes?
Several things will happen if your estate is worth more than $150,000 in California. First, your estate will go through California probate. If you die “intestate” or without a formal will then the state will appoint an administrator to pay your debts and distribute your assets. Some things will automatically transfer. Other assets will not.
- If you named a beneficiary on your IRA that money will transfer to that person.
- The same goes for your 401k and life insurance or anything in a trust. These do not go through probate.
- Anything that is held in a transfer-on-death or payable-on-death account will transfer to the named recipient and also avoid being part of the probate process.
- If you and a spouse own the house or cabin together then those properties will automatically transfer to your spouse if your spouse is a “joint tenant.”
However, without a will (or trust) the probate process follows California succession laws. This means that the state will decide how to distribute your assets. If you don’t a have a will, the state could also decide who will care for your children.
If you are married your spouse will typically get all of the community property. Some property is separate, that is not jointly owned between spouses. This may mean that your spouse will get half of your separate property and your child will get the other half. If you have more than one child then your spouse will get one third of your separate property and the rest will go to your children.
The California state rules of succession can be confusing. Consulting a qualified estate planning attorney can ensure that the probate process is smooth. Planning now however, is your best next step to making sure your wishes are known and your assets, home cabin, and children are cared for in the way you would want.