Isn’t There Already a Law That Leaves Everything to My Spouse and Kids?

By Cory Howes

Many people think that if they die while they are married, everything they own automatically goes to their spouse or children. They’re actually thinking of state rules that apply if someone dies without leaving a will.

In legal jargon, this concept of dying without a will is referred to as “intestate.” In that case, the specifics will vary depending on each state’s law, so where you live when you die can significantly change the outcome for your family. However, the general rule is that your spouse will receive a share, and the rest will be divided among your children or your parents. Exactly how much a spouse will inherit depends on the state, though.

In this scenario, your spouse is getting an inheritance, and so are your kids or parents. But here are some examples of how the laws can fail many common family situations.

First, if both parents of minor-aged children die intestate, then the children are left without a legal guardian. Kids don’t automatically go to a godparent, even if that’s what everyone knew the parents had intended. Instead, a court will appoint someone to be the children’s guardian. In such situations, the judge seeks to act in the children’s best interests and gathers information on the parents, the children, and the family circumstances. But the decision is up to the court, and the judge may not make the decision that you, as a parent, would have made.

When it comes to asset division, in most cases, state intestacy law presumes that a family consists of a husband, wife, and their natural-born children. But, that’s not necessarily the way many families are structured, and things can become legally complicated quickly.

According to Wealth Management, one analysis has revealed as many as 50 different types of family structures in American households. Almost 18 percent of Americans have been remarried, and through adoption and stepfamilies, millions of children are living in blended families. The laws just haven’t kept up, and absurd results can occur if you rely on intestacy as your estate plan. Stepchildren that you helped raise (but didn’t legally adopt) may end up with no inheritance, while a soon-to-be-ex-spouse may inherit from you.

For example, let’s see what happens when a father has a will that allocates assets to his spouse and two children, and then the couple adopts a third child. Then, the father dies in a car accident before he’s able to revise his will. In some states, because the adopted child is not mentioned in the will, she may not be entitled to any inheritance.

If that isn’t worrisome enough, consider that, in some states, the law provides that an adopted child still has rights to the biological parents’ assets–and the biological parents are entitled to inherit a child’s wealth.

Of course, with a will or trust, you can control your estate and essentially eliminate the risk of these crazy results.

State law decides what happens to your estate if you are separated from your spouse when you die. Much of the time, the court ignores your separation and just considers you still legally married.

Unless you have a prenuptial or postnuptial agreement, it is extremely difficult to disinherit your spouse. Again, even if a spouse is omitted from a will, state laws might choose to give a surviving husband or wife a share of the assets.  If you are separated from your spouse, and your divorce is pending, you should definitely talk with your divorce lawyer and an estate planning attorney about your options.

Intestacy provides no asset protection or preservation benefits. Without any protections in place, an estate’s assets are still vulnerable to creditors, lawsuits, and others who may claim entitlement to the property. These claims would take precedence over the statutory requirements for inheritance. In other words, the family may not receive the lion’s share of the estate. Instead, they’d get the leftovers.

The best way to safeguard and pass along what you’ve worked so hard to build is to talk to an estate planning attorney. Protect yourself, your family and your assets with effective planning. Together, we can discover which estate planning tools will do the best job in protecting your future and that of your family. Please contact me if you have any questions or to get started creating your own plan.