When discussing estate planning with friends and family, a common response is "I should probably prepare a Will someday." While that is the first reactionary comment, many also want to know what happens if they do nothing. The simple answer to that is, it depends.
Some people may fear that if they do nothing, all of their assets will go to the state or federal government. Unless you owe significant taxes, that is unlikely to be the case. In fact, all states have laws that direct who inherits from a decedent if there is no will. These laws are known as "intestacy statutes."
In Illinois, the intestacy statute directs as follows:
If there is a surviving spouse and no descendants, 100% of the estate would go to the surviving spouse.
If there is a surviving spouse and also one or more descendants of the decedent (child or grandchild): 1/2 of their assets go to the surviving spouse and the other 1/2 is shared by the decedent's descendants per stirpes (in equal shares).
If there is no surviving spouse but a descendant of the decedent: the entire estate goes to the decedent's descendants per stirpes.
If there is no surviving spouse or descendant, but a living parent, brother or sister: then the entire estate to the parents, brothers and sisters in equal parts.
The statute lays out further examples, with the intent that the estate of the decedent goes to family members along the bloodline. This may or may not be the wishes of the individual who has passed but it does allow for the family to distribute the estate according to the law.
Another way assets may be transferred upon someone's death without a Will is through a beneficiary or transfer-on-death designation. This is usually the case for retirement plans (401k and IRAs) and insurance policies. These assets allow for an individual to name a beneficiary so that the assets are paid directly to the named beneficiary upon the death of the holder of the plan or policy.
A transfer-on-death designation may also be available with certain bank or investment accounts. This allows the account holder to name a beneficiary so that the asset transfer to an individual or charity upon death.
While options allow for a distribution of a decedent's estate, the result may not be exactly how the individual intended. However, other than having a Will, utilizing some of these options may be an effective strategy when putting together an estate plan with a Will. To have a better understanding of how your estate will be distributed, it is helpful to sit down with an estate planning attorney to whether it would benefit you and your family to prepare a Will.
If you have any questions about preparing an estate plan, please feel free to contact Glick and Trostin, LLC at 312-346-8258.
Disclaimer: The materials on this website are provided for informational purposes only and do not constitute legal advice. Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between any attorney and any other person, group or entity. No representations or warranties whatsoever, express or implied are given as to the accuracy or applicability of the information contained herein. No one should rely upon the information contained herein as constituting legal advice. The information may be modified or rendered incorrect by future legislative or judicial developments and may not be applicable to any individual reader's facts and circumstances.
