When you die without a will or a trust, it’s called dying “intestate.” If you were to die before drafting a will or trust, your estate would be distributed according to state law. While each state has different laws regarding intestate estates, generally, the property is distributed to the closing living relatives of the deceased.
If the deceased was single or divorced and had no biological or adopted children, parents, siblings, or other relatives, his or her estate would go to the State of California. However, assets with beneficiary designations would be distributed to the named beneficiaries; they would not be governed by the state’s intestate succession laws.
Types of assets distributed to beneficiaries:
- Cash in bank accounts
- Life insurance policies
- 401k and IRA accounts
- Other financial investments
Usually, when you open a bank account, retirement account, or take out a life insurance policy, the financial institution asks you to select a beneficiary, but you’re also allowed to change it at any time. If it’s a joint account, usually if something happens to you, the other account holder receives the balance if you pass away.
Also, California is a community property state. So, if you’re married, your spouse is entitled to 50 percent of the marital assets acquired during the marriage, including income, real estate, automobiles, and so on. The only way to exclude a spouse from an inheritance is to have them voluntarily sign a prenuptial or postnuptial agreement that waives their right to certain property that would otherwise be considered “marital” or community property.
Controlling the Distribution of Your Property
To control the distribution of your property, you’ll want to draft a will, or even better, a will and a revocable living trust. While there are plenty of books on estate planning, most experts agree that it’s not a DIY project. So, before you decide whether to create just a will or a will and a trust, you should consult with a Rancho Cucamonga estate planning attorney from our firm.
Related: Creating an Estate Plan When You’re Sick or Elderly