Here are the legal and personal ramifications of dying without a will

What happens if a loved one dies without a will? Millions of us are bound to find out, as two-thirds of American adults have no will, according to a recent Caring.com study.

If a person dies without a will, or intestate, the probate court decides who gets the deceased’s property, said certified financial planner Vid Ponnapalli, founder of Unique Financial Advisors LLC in Holmdel, New Jersey.

“But while the court distributes the property, it is ultimately up to the survivors to claim their rights to it,” he said.

For an intestate situation, the probate court appoints an executor for the estate who will follow a process according to the laws of the state where the deceased lived.

“Generally speaking, this process, as a first step, involves identifying the kinship, aka bloodline, of the deceased,” Ponnapalli said. “This process can take a lot of time and puts the burden on children to prove to the court that they are your offspring.”

There is great uncertainty around what the courts will decide in the absence of a will, said Andrew Schwartz, senior vice president of Madison Planning Group in White Plains, New York.

“Equal and fair are two different things,” he said. “To the courts, equal is equal [numerically].

“You don’t know how they will divide your assets,” Schwartz added.

He listed other ramifications of not having a will:

• Different heirs, different objectives: For example, if a child or grandchild had special needs, the inheritance may disqualify their special needs fund.
• Addiction issues: “In this time of pervasive opioid issues, an heir could blow through an inheritance,” Schwartz said. “Without a will, how do you make sure they’re taken care of?”
• Long distances: Can family members travel to the court? Or do they need to hire an attorney and/or a financial advisor from that area or state?
• Locating the deceased’s records: The family needs to find the deceased’s proof of residency and understand what account statements exist, who the accounts belong to and how they are held —individual name, business, joint, retirement, real estate, partnership, etc.
• Differing state laws: For example, not all states recognize domestic partnerships or common-law spouses.

The uncertainty of child custody is another ramification of dying intestate, said Mark Dutram, CFP and president of Bayview Private Wealth in Destin, Florida. For example, if the deceased had custody of minor children, it would be up to the court to choose a guardian to care for them and a conservator to oversee their assets, he said.

Not least of all are the emotional ramifications that afflict the deceased’s family when there is no will, Dutram said.

“Your loved ones will already be in a state of trauma — the last thing you’d want is a complicated process for them to administer your estate,” he said. “The family will need to determine … what [the deceased] would have liked.”

“And friends and acquaintances may come out of the woodwork for handouts of the deceased’s effects, like vehicles,” Dutram added.