Estate planning is all about control; control over your assets, control over your family, and control overdistributions after your death.  When you die without an estate plan, you lose that control.  There are two important concepts to think about with regard to dying without an estate plan.  The first is “intestacy” (i.e. dying without an estate plan).  The second is guardianship (i.e. What happens to my children if I die without an estate plan?).  Let’s look at the consequences of each in order.

Intestacy

“Intestacy” means dying without an estate plan.  “Intestate Succession,” the order in which an Intestate estate passes, is controlled by statute.  In Missouri, that statute is RSMo.§ 474.010.  If a person dies Intestate and is survived by their spouse, the surviving spouse receives the following:

• The entire intestate estate if there is no surviving spouse of the Decedent.
• The first t$20,000 in value of the intestate estate, plus one-half of the balance of the intestate estate, if there are surviving issue, all of whom are also issue of the surviving spouse.
• One-half of the intestate estate if there are surviving issue, one or more of whom are not issue of the surviving spouse.

In other words, the surviving spouse receives the entire estate if the decedent dies childless, $20,000 plus ½ of the estate if the surviving spouse and the Decedent had children together, and ½ of the estate if the decedent had children from a prior relationship.

As an estate planning attorney, I find that most couples do not realize that their surviving spouse only receives ½ of the estate if they die intestate.  Most people simply assume that their spouse is entitled to receive all of their assets.  As RSMo. § 474.010 shows, however, that is simply not the case.  To prevent this inequitable result, couples need to consult an estate planning attorney to draft an estate plan so that the survivor of them will receive the benefits of the other’s estate.

But what happens to the other half of the decedent’s estate?  RSMo. § 474.010 lays out in detail a rather complex guide to so-called "descent and distribution” in this scenario.  To better understand this guide, we need to look at the Table of Consanguinity.

“Consanguinity” is simply a fancy word for blood relation.  Each of the corresponding numbers on the Table refer to the degrees of relationship.  As we can see, the parents and children of the decedent are relatives in the 1st Degree, while siblings and grandparents are considered relatives in the 2nd Degree.  This table goes all the way to the 10thand 11th Degrees, those Degrees being the third-cousin-twice-removed and the third-cousin-thrive-removed, respectfully.

Under RSMo. § 474.010, should a decedent die Intestate, part of her estate could go to the relatives all the way up to the 9th Degree of Consanguinity—her second-cousin-thrive-removed or her third-cousins-once-removed.  This result could only occur if there is absolutely no one else who is closer in relation to the decedent at death.  For most clients, however, their intestate estate will pass to their children or grandchildren, per stirpes, meaning each descendant will receive an equal share of the decedent’s estate.  In fact, for every distribution, except those to a spouse, the intestate estate will pass per stirpes.  The surviving descendants will receive an equal share of the estate.  The first generation of Heirs will receive an equal share of the estate, and if any of those heirs in the first generation predeceased the decedent, the next generation will receive that heir’s share in equal proportions.

For example: If A dies Intestate leaving behind three children (B, C, and D), and D predeceases A leaving behind two children (E and F), B and C each receive 1/3 of A’s estate, and E and F each receive 1/6 of A’s estate since D would have been entitled to a 1/3 share of A’s estate had he survived A.

If a decedent has absolutely no family left, then RSMo. §474.010 informs us to look at the heirs of the decedent’s predeceased spouse, if any.  But, if there is absolutely no one who could inherit from the decedent’s estate, then her estate “escheats” to the State of Missouri, meaning that Missouri takes the entire estate and sells it off accordingly.

In the case of Intestacy, a court will decide who is entitled to receive distributions from the decedent’s estate. This is known as probate. The decedent has no say in this because, well, he is dead, and also because he did not have an estate plan in place during his life.  This happened in the case of pop icon Prince.  Prince died without an estate plan and a court in Minnesota decided who would receive his estate.

In intestacy scenarios, a court follows the laws of the State of Missouri.  In other words, the government controls how your assets will be distributed, not you.  Most people do not wish for this result because they do not want the government deciding how their assets should be distributed at death.  That is why it is of crucial importance that you discuss your estate planning options with an experienced estate planning attorney like Vince Taormina of The Taormina Firm.  Only by working with an estate planning attorney can you have a full grasp of what happens to your estate at death.

Guardianship

If you and your spouse die without an estate plan, leaving behind minor children, the consequences can be, for lack of a better word, dire.  This is not meant to scare you.  It is merely meant to let you know that you will cede control of who cares for your children after your death.

In that unlikely event, a court, and not you, will decide who will be guardian of your minor children. This means that the court is the ultimate decision-maker, they have the power and control of your children, not you. The court makes this determination by using the “best interest of the child” standard.  Though this is a relatively high bar, you, and not a court, know what is in the best interest of your child.  When you have an effective estate plan in place, the court must follow your wishes with regard to child guardianship.

Conclusion

Most people do not realize the grave consequences of dying without an estate plan.  The result is oftentimes inequitable and undesirable for most families.  Control is taken out of your hands and put in the hands of the government.  Does this sound right to you?

If it does not, you should talk to a professional and understanding estate planning attorney like me, Vince Taormina of The Taormina Firm, to see what estate planning options you have to prevent the harshness of dying without an estate plan.  For your free consultation with an estate planning attorney at The Taormina Firm, give us a call any time!