Why spend a few thousand dollars on an estate plan when federal and state law bought one for you for free? Why pay for private health insurance when you can rely on Medicaid? Why purchase media (books, magazines, music), when you can use it online or in a public library for free?
The law’s default estate plan that is in place for individuals who do not have their own estate plan can be a useful stop gap for specific situations and certain individuals. But free initiatives implemented by the government are not always the best approach for each individual.
All U.S. citizens who die without a Will or a Trust will have an estate plan in place for them free of charge, compliments of federal and state law. That estate plan is referred to as “intestate succession” and is set forth under the Probate Code. Pursuant to Probate Code Section 6400 et seq., intestate succession (when a person dies without a will or trust) mandates that the estate of a deceased individual (“decedent”) who was married shall pass to that individual’s spouse, if that individual dies without children. If the decedent dies with a spouse and one child, and no children or grandchildren from a deceased child, then the decedent’s estate passes one-half (1/2) to that decedent’s spouse, and the other one-half (1/2) to that decedent’s sole child. The estate of a decedent who dies intestate with a spouse and more than one child will pass one-third (1/3) to the surviving spouse, and the other two-thirds (2/3) to be divided equally among the surviving children and the offspring of any deceased children. These are general guidelines, which can change depending on the facts and circumstances of each specific case.
When the Probate Code refers to a child, what is included in that definition? Under Probate Code Section 21115, a child includes, but is not limited to, halfbloods, adopted persons, persons born out of wedlock, stepchildren and foster children. Thus, a person who may not wish to leave their estate to a stepchild, but who dies intestate, may be out of luck.
By using a Will or a Trust, a person can change the recipient of their estate assets to individuals other than the ones provided for by the Probate Code section relating to intestacy succession. Additionally, a person can choose to leave all or part of their estate to an entity, such as a charity or a school. Through the use of a Trust or a Will, a person can even control when a beneficiary will receive their distribution, within certain limitations.
Not only is the distribution of the property of the intestate decedent provided for by federal and state law, as illustrated above, the estate tax and property tax planning of the intestate decedent is also provided for by federal and state law. To learn more about estate tax and property tax planning, please contact Tiffany A. Halimi, Esq. or one of our other estate and tax planning attorneys.
 All references to the Probate Code are to the California Probate Code