Many people have a basic understanding of estate planning, but there are common misconceptions about why estate planning is so important. To understand the that, it helps to clear up some misconceptions surrounding what happens after death. Toward that end, the Los Angeles attorneys at Schomer Estate & Wealth Advisors discuss what happens after death to help you understand why comprehensive estate planning is so important.
Your Loved Ones May Have to Wait for Their Inheritance
After your passing, your family may need to wait before accessing the assets you left them, especially if your estate is subject to probate. This delay can be problematic if your loved ones are depending on those assets for immediate expenses, such as rent, utilities, or healthcare costs. Probate can be a lengthy process, often taking months or even years to settle, depending on the complexity of the estate and any potential disputes that may arise. Through thoughtful estate planning, such as establishing a living trust, you can help your loved ones avoid this waiting period and ensure they receive the assets promptly.
Don Not Count on Your Spouse Inheriting Everything If You Die Without a Will
Many people put off estate planning because they assume that if they pass away without a Last Will and Testament their spouse will automatically inherit all their assets. If you die intestate (meaning without a valid Will), however, state intestate succession laws determine how your estate is divided, and your spouse may only inherit a portion of your estate with your children inheriting the remainder. In some cases, this division can create financial challenges for your spouse, especially if they were counting on receiving the entirety of your estate. To avoid this, it is crucial to execute a Will that clearly outlines your wishes.
A Will Does Not Mean Your Estate Avoids Probate
While having a Last Will and Testament ensures your wishes are documented, it does not guarantee that your estate will avoid probate. The probate process is necessary to validate your Will and oversee the distribution of your assets. Even with a Will, the probate court must review and authenticate it, which can take time and expose your estate to challenges from disgruntled heirs or creditors. Furthermore, probate proceedings become part of the public record, meaning the details of your estate, including who inherits what, will be available to anyone. To keep your estate private and out of probate, consider incorporating a trust into your estate plan.
If You Die Without a Will the State Does Not (Usually) Take Everything
There is a common misconception that the state will automatically claim your assets if you pass away without a Will. While it is possible for the state to take possession of your estate through a process known as escheat, this only happens if you leave behind no surviving relatives. Typically, even distant relatives may be found to inherit your estate, meaning it is unlikely that the state will receive everything. If you owe a significant amount in medical debts, however, the state’s Medicaid Estate Recovery Program could aggressively pursue your estate assets to recoup costs, reducing the inheritance available to your loved ones.
Your Family May Not Be Personally Liable for Your Debts
Upon your death, your estate is responsible for settling any outstanding debts, but your heirs are generally not personally liable for those debts. Creditors have the right to file claims against your estate, which must be resolved before assets can be distributed to your beneficiaries. As a result, the total value of your estate may be diminished by the amount used to satisfy debts, reducing what your heirs ultimately receive. If, however, a spouse or family member co-signed or guaranteed any of your debts, they may still be legally responsible for paying them. Comprehensive estate planning can help mitigate the impact of debt on your loved ones.
Do You Have Additional Questions about Why Estate Planning Is Important?
For more information, please join us for an upcoming FREE seminar. If you have additional questions about what happens after your death and why proper estate planning is so important, contact the experienced Los Angeles estate planning attorneys at Schomer Estate & Wealth Advisors by calling (310) 337-7696 to schedule an appointment.
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