Saturday, December 19, 2009

What happens if you don't have a will or living trust?

This is a question that I get asked often. If you do not have a will or living trust, the Commonwealth of Pennsylvania has developed a scheme of how your assets will be distributed upon your passing. This is called dying "intestate" and the law is the Pennsylvania Intestacy statute. For instance, if you die and have a surviving spouse, you had kids together and you have a surviving parent, your spouse will collect $30,000 plus one half of the remaining balance of your estate. The rest of the estate goes to your children in equal shares. The scheme continues, and takes into account the possibility of having no spouse, no kids, or parents. Of course, it is always better to have a plan of where you want your stuff to go upon your passing. Every family is different, and each family presents unique circumstances and dynamics that must be addressed in an estate plan. For instance, if you have minor children, you would probably not want your assets distributed outright upon your passing. Rather, you would likely want to hold those assets in trust until the child reaches a certain age. The intestate statute is a backup, and should never substitute for an estate plan.