If you pass away without an estate plan, the laws of your home state determine how your assets pass to your spouse, children, parents, siblings, and sometimes other relatives. These laws, called laws of intestate succession, attempt to predict what you would want, but the result may not reflect your true wishes. Many married couples assume their spouse will automatically inherit everything, which is not always the case.
Depending on your family circumstances, the outcome could look like this:
- If you are married with no children and your parents survive you, your parents may be entitled to a share of your estate.
- If you leave a spouse and children, your spouse’s share depends on whether all of your children are also your spouse’s children.
- If you have children from another relationship, your spouse may receive less.
- If you are unmarried, have no children, and your parents have died, your assets pass to your closest living relatives.
Who Inherits Your Assets If You Die Without a Will?
Some assets may already have arrangements that override the default rules of intestate succession. For example, retirement accounts and life insurance policies with named beneficiaries pass directly to those beneficiaries, outside of probate. An important part of creating your estate plan is identifying which assets need additional safeguards.
Who Administers Your Estate Without a Will?
State law controls more than who inherits. Without a will, you generally cannot designate who will administer your estate. Instead, state law sets the order of priority for people the probate court may appoint. Michigan calls this person a personal representative; other states use the term executor.
The personal representative opens probate, gathers your assets, pays your debts and taxes, and distributes what remains as state law directs.
What Happens if You Become Incapacitated Without an Estate Plan?
An estate plan matters during your lifetime, too. If an accident, illness, or cognitive decline such as dementia leaves you incapacitated, someone you chose in advance must be ready to make financial and medical decisions for you.
What Is a Durable Financial Power of Attorney?
Start with your finances. Without a Durable Financial Power of Attorney, no one automatically gains authority over your money and property. Under Michigan law, a Financial Power of Attorney is durable by default, meaning your agent’s authority continues if you become incapacitated.
Many people assume a spouse, adult child, or other family member can simply step in, but a family member does not automatically have legal authority to manage assets held in your individual name. This could affect everyday tasks, such as paying bills and writing checks, as well as bigger decisions, such as managing investments and selling real estate.
Without this document, your family may need to ask the probate court to appoint a conservator. The process can be expensive and, more importantly, slow, while your bills, mortgage, and taxes go unpaid. You also lose control over who serves in this role: the court may choose the person you would have picked, or it may choose someone else.
Who Makes Medical Decisions if You Become Incapacitated?
Medical decisions call for a separate document: a Health Care Power of Attorney, known in Michigan as a Patient Advocate Designation and in Florida as a Health Care Surrogate Designation. Without one, your family may face uncertainty about who has legal authority to make decisions for you. A family member may need to seek court intervention to obtain decision-making authority. These proceedings can be expensive, lengthy, and contentious. The person appointed may not be the person you would have chosen or may not fully understand your health care preferences.
Varnum’s estate planning attorneys help individuals and families develop plans that reflect their wishes, protect their assets, and provide for the people who matter most.
