A surprisingly high percentage of adults in the United States do not have any estate planning documents in place. Caring.com is a popular website that has been conducting preparedness surveys over the last several years. Their research indicates that the trend is going in the wrong direction.
In 2017, 42 percent of all American adults had a will or a trust. A couple of years later, the number dropped to 40 percent. This year, just 33.1 percent of the people that they surveyed were properly prepared.
You might think that this small number is almost exclusively driven by younger people, but that is not entirely true. Twenty-four percent of individuals in the 18-34 group stated that they had estate plans. That figure was only slightly higher, at 27 percent, for participants that were between 35 and 54 years of age.
Surely people that are 55 and older are very well prepared, right? In fact, 55 percent of the people in this group had no estate planning documents at all.
A disturbing thing about the lack of preparedness is the fact that so many parents of dependent children are shirking this responsibility. Estate planning becomes an absolute must when someone is depending on you, and it is relatively easy to put a basic estate plan in place.
Estate planning for young families would typically include the purchase of sufficient life insurance, and designating a guardian in a will. You should execute incapacity planning documents executed as well, and the other details will depend upon the circumstances.
Intestacy is the legal word used when someone dies without a will or trust. Under these circumstances, the probate court would supervise the administration of the estate.
Probate proceedings are required when you have a will. The difference is your assets would be transferred in accordance with the terms of your will. A personal representative or estate administrator will be appointed by the court. This person is responsible for conducting the business of the estate.
The probate process involves notifying beneficiaries and other interested parties, paying final debts, and preparing the assets for eventual distribution. After all the necessary tasks have been completed, the court will order the distribution of the assets under intestate succession laws or the terms of your will.
If there is a spouse but no descendants, parents, or siblings, the surviving spouse would inherit everything under Oklahoma intestate succession laws. The children inherit everything if there is no spouse.
When there is a spouse and descendants from that spouse and the decedent, the spouse inherits half of the separate intestate property. The descendants inherit the remainder.
If there is a surviving spouse and parents still living, the spouse gets one-third of the separate property. The parents inherit the rest. The spouse would keep all of the property that was jointly acquired during the marriage.
The parents would be the inheritors if there is no living spouse or descendants. Siblings would be first in line if there is no spouse and there are no descendants or parents still living.
This a general overview, and there are finer rules that apply to other relationships and unusual circumstances.
In rare cases, a person will die intestate with no living relatives at all. When this scenario unfolds, the property will escheat to the state. In other words, the state will absorb the property, but they will make every effort to find a relative.
There was an intriguing escheat case in New York a number of years ago that revolved around a Holocaust survivor named Roman Blum. He died intestate in 2012 at the age of 97 while he was in possession of an estate valued at about $40 million.
There have been some claims over the years, but they were not validated by the court.
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You may not have $40 million to pass along, but you should certainly put an estate plan in place to make sure that your legacy is transferred appropriately.
If you are ready to get started, give us a call at 405-843-6100 to schedule a consultation at our Oklahoma City estate planning office. There is also a contact form on this site you can use to send us a message, and if you reach out electronically, you can expect to receive a prompt response.
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