What Are the Legal Implications of Not Having an Estate Plan?

Your Estate—Is an Estate Plan Important?

Creating a valid estate plan is vital if you would like to direct how your estate is managed after your death. Without it, there are legal and emotional hurdles that your loved ones will have to overcome to benefit from the legacy you leave behind. For your will to be valid in California, it must be signed by you in the presence of two disinterested witnesses, meaning they are not named beneficiaries in the will, while you are of sound mind.

What is an Estate Plan?

An estate plan is an organized series of documents dictating the actions and steps needed to fulfill your last wishes. These include necessary medical directives so you can pass with dignity and legal instructions that explain what should happen with your belongings. Estate plans are tailored to the person they are written for and often include the following items:

Will: A legal document that defines how your assets and property are distributed after your death. It allows you to appoint an executor to execute your will and designate guardians for any minor children.
Trust(s): A legal arrangement that allows assets to be held for your intended beneficiaries and to pass to them without going through the public court system at the time of your death. Some trusts also offer tax benefits.
Power of attorney: A document that grants another the legal authority to act on your behalf if you become incapacitated or unable. This trusted person, called an agent, will be able to handle legal or financial affairs for you.
Advanced healthcare directives: This legal document specifies your medical preferences and appoints a healthcare agent to make decisions for you if you can no longer communicate your wishes while still living. This type of directive can also outline medical treatments you do or do not want, such as life support or resuscitation.

Together, these documents provide a comprehensive plan for addressing all financial, legal, and medical concerns in alignment with your wishes. Without a customized estate plan, you and your heirs face significant risk.

Probate Court: The Risks and Challenges

The Probate Court is presided over by a single judge whose duty is to review the validity of a will and approve its execution. The California Probate Code covers the rules and processes for administering and overseeing the distribution of a deceased person’s estate, resolving any disputes, and ensuring compliance with the law. Avoiding probate by preparing estate planning documents well in advance can make transferring your legacy to your beneficiaries easier—and faster. The probate process has some drawbacks:

Expensive: Attorney fees are subject to California Probate Code §10810 to be calculated as a percentage of the gross estate value (regardless of liabilities). Due to the court process, you could lose between $25,000 and $50,000 on an estate worth a million dollars.
Time-consuming: Probate can take 12 to 18 months or longer to complete, depending on the complexity of the state.
Public: Probate court proceedings are on public record. Your assets, debts, beneficiary names, and other information about your estate can be seen by others, which can lead to a host of problems.
Limited control: As the court will oversee all proceedings, family members may feel unable to take proactive actions on your behalf. If you pass without a will, this will be even more difficult.

Understanding the Probate Process

By consulting with Cava & Faulkner’s estate planning attorneys to prepare your last will and testament, including any trusts you would like to form, you have a much better chance of avoiding the long, drawn-out process of probate court. If you die without a will, your assets will be distributed per Probate Code §§ 6400–6414.

Married: Community property will be inherited by the surviving spouse. Assets independently owned by you will be divided between your spouse and children.
Unmarried or divorced, with children: Each child will inherit an equal portion of your assets. If a child predeceases you, their portion will be split between their children (your grandchildren).
Unmarried without children: Your assets will go to your parents. They will be divided among your siblings if your parents are no longer living. They will go to your nieces, nephews, or extended family if your siblings are no longer living.
No surviving relatives: If you have no identifiable living family, your estate will become the legal property of the State of California.

It should be noted that stepchildren and unmarried partners are likely to receive nothing without a legal will.

Your Healthcare Mandates Will Be Unknown

If you do not prepare an advanced healthcare directive or power of attorney, family members may be forced to get approval from a judge before making medical decisions for you. This can add to an already stressful time for the ones you love. Planning ahead will clearly state your end-of-life preferences, giving everyone peace of mind that they are following your wishes.

You May Face Tax Consequences

The state of California does not charge an estate tax. According to the IRS, estates valued at over $13 million are subject to federal estate taxes. If your wishes are preserved in legal instruments that protect your assets from the public system, such as through a trust, you can avoid or reduce the amount of your estate lost to taxes and maximize the amount you leave to loved ones.

Minor Children Could Be Left Without a Guardian

If you have minor children, their care and upbringing are of utmost importance. You know how you intend to raise them; in the event of your passing, you want to ensure they are cared for according to your wishes by someone you can trust. When you do not leave clear directions in your estate plan, minor children could be left without the guardian you would choose. The court will have to assign a guardian for you. The court may choose a family member or a legal guardian you are unfamiliar with.

Secure Your Future with Cava & Faulkner

You deserve a sense of security and peace of mind with a comprehensive estate plan prepared by our estate planning lawyers at Cava & Faulkner. Documenting your final wishes puts your future securely in your hands and ensures they will be followed after you pass away. Contact our firm for a free consultation at 916-831-7565.

At Cava & Faulkner, we believe estate planning is about so much more than your assets or avoiding taxes, which are relevant considerations. The process is about leaving a legacy for your loved ones.