Planning for the future is all about planning for the unknown. If you have hopes and plans for the future, there are things you can do now to meet your goals. Having a well drafted will is the cornerstone of a sound financial plan. We will all die, but few of us know exactly when this will happen. If you die without a will, state law will dictate how your assets are divided, a judge may very well decide who will raise your minor children, and in some cases, the federal government will share in your estate.
The goals of effective estate planning are to alleviate these concerns and permit you to decide today, how your affairs will be handled when you are not here to control them. Thinking ahead, you may want to focus on the following issues:
- Provision of supervision and control of minor children
- Education and support of children
- Appropriate distribution of items of precious items of personal property
- Appropriate distribution of assets
- Avoidance of unnecessary taxation
- Avoidance of unnecessary probate expenses and challenges
- Protection in case of incapacity
- Clarification of your intentions on “end of life” issues
An estate plan may address some or all of these issues depending on your needs. A well drafted estate plan may include the following:
- A will
- An insurance trust
- Other intervivos (lifetime) trust(s)
- Trusts for the care of children
- Guardianship provisions for minor children
- A power of attorney
- A life prolonging procedures declaration or living will
What happens if I die without a will?
The answer to this question depends on which state’s laws will apply. In the state of Indiana, if you die without a will, your estate will be divided up depending on your family circumstances. The actual distribution plan is somewhat complicated. A simplified summary of Indiana law follows:
If you die without at will, your spouse would receive 1/2 of your estate if you are survived by at least one (1) child, or grandchild, 3/4 of your estate if there are no surviving children or grandchildren, but at least 1 of your parents survives, or your spouse would receive all of your estate if none of your children, grandchildren or parents survive you. ** If your current spouse is a second or other subsequent spouse and you had no children with your current spouse, your spouse may only get limited rights in your estate.**
The rest of your estate would go to your children (or grandchildren if one of your children dies before you). If you have no such children or grandchildren, then the rest would go to your parents if either of them survive you.
If you leave no spouse and no children or grandchildren, then your estate would be split up between your surviving parents and siblings. If your parents and siblings do not survive you, then your estate would go to your nieces and nephews.
The distribution plan in Indiana continues to attempt to place your estate in your family (through grandparents and other relatives), however, if no surviving relative appears in the order of distribution, then your estate would go to the state.