Estate planning unpreparedness is widespread among Americans, and it is getting worse as the years pass. Caring.com has conducted surveys to keep a finger on the pulse of this matter over the last few years, and the numbers are not encouraging.
In 2020, just 32 percent of adults have estate plans in place. The figure was 40 percent in 2019, and in 2018, it was 42 percent.
According to the study, 16.4 percent of people between 18 and 34 had estate plans. Just over 27 percent of people in the 35-54 age had wills or trusts, and for people 55 and over, the number is a very surprising 47.9 percent.
The Dangers of Intestacy
If you were to pass away without a will or any other estate planning document, the condition of intestacy would exist. Under these circumstances, the court would provide supervision and appoint a personal representative to handle the estate administration duties.
Final debts would be paid, and the personal representative would identify and inventory the assets that comprise the estate. When everything is in order to the court’s satisfaction, they would empower the personal representative to distribute the assets using the intestate succession laws.
In the state of New York, if you die intestate and you have a spouse and children, your spouse will not automatically inherit everything. Your spouse would inherit the first $50,000 of your property, and half of the remainder. The children would receive the other half.
This arrangement would not be in line with the intentions of many people that are in this situation. If you were to die intestate with parents still living but no spouse or children, your parents would be the sole inheritors.
What if you simply do not get along with your wealthy parents, and you are very close with your brother? These are couple of the scenarios that could unfold, but there are others.
The Case of Roman Blum
Sometimes a person will pass away intestate with no relatives still living. Under these circumstances, the court can appoint a representative to try to find the closest relative. If they have no success, at some point, the state would absorb the resources.
A very interesting intestacy case emerged in the state of New York back in 2012. During that year, a 97-year-old Long Island Holocaust survivor named Roman Blum passed away intestate. His wife had predeceased him, and he had no children. His estate had an estimated value of about $40 million.
He had some friends that provided him with assistance, so he did have people in his life that would have been logical inheritors. And of course, he could have left his resources to a worthwhile charity or nonprofit organization.
Two different people came forward making a claim to the estate, but the first one was rebuffed entirely. The decision with regard to the second individual was still pending as of a couple of years ago, and no further updates are available.
This is definitely an instructive tale. Few of us have that kind of money, but the point resonates across economic borders. It is important to state your wishes in writing in a legally binding manner so that your own true wishes will be carried out after you are gone.
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