What Happens If No Planning Is Done?

If a person dies without any effective estate plan, we say the person died “intestate.” Essentially, it is the default estate plan for someone who doesn’t have an estate plan. Each state has its own laws for distribution of an estate of a person who dies intestate. Contrary to some myths regarding estate planning, the estate of an intestate decedent rarely ends up going to the state’s ownership. (When the state “inherits” a decedent’s estate because there are no next of kin, it is called an “escheat”—not to be confused with estate tax which may end up costing the estate but does not transfer the entire estate to the state.) Under laws of intestacy, an intestate decedent’s assets are distributed to family members based on their closeness to the decedent by blood relation. For example, if an unmarried individual with children dies, under intestacy laws, the children inherit the decedent’s property in equal proportions.