What happens to your assets after your death? It depends on what, if any, legal documents you have in place to direct the distribution of those assets. Generally speaking, assets can pass to beneficiaries through a few methods including intestate succession, beneficiary designations, a will, and/or a trust. Each method has its own benefits, costs, and quirks to consider when creating your estate plan.
Intestate succession dictates who receives assets from the estate of a person who dies without a will or other documents directing the distribution of those assets. Each state has its own rules governing intestate succession. These vary from state to state, but are generally designed to mimic what a ‘typical’ person would be most likely to want for their asset distribution—moving through the family tree from spouse to children to grandchildren and so on, and accounting for circumstances such as blended families, lack of descendants, community property, forfeiture of rights, and even criminal activity related to the death itself.
Intestate succession rules are applied in probate court when no will exists to dispose of a decedent's property. The probate process can be lengthy and expensive, particularly when intestate succession must be employed, but the biggest problem with intestate succession is that there really is no such thing as a ‘typical’ person. Very rarely does someone truly want their assets to be distributed exactly as the state’s formula describes.
We’ll review other methods of passing assets in future news posts, and the Oregon State Bar provides additional resources on estate planning. But if you’re wondering how all of this affects your personal situation and would like custom-tailored professional advice, please contact us now to begin exploring your estate plan options.