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THE CONSEQUENCES OF FAILING TO PLAN, OR WHY EVERYONE NEEDS ESTATE PLANNING

When a person dies “intestate” (without making and leaving a will), each state provides a default plan (usually known as the statute of descent and distribution) under with his or her net estate is disposed.  When a person dies intestate, there is no adding of provisions beyond the default plan. The default plan is only the default plan and nothing more.

The Default Plan Won’t Straighten-Out Financial Situations

State statues of descent and distribution are not designed to straighten-out the financial affairs of an intestate.  Death usually leaves financial loose-ends.  Under descent and distribution, a person who wants to plan the disposition of his or her estate cannot forgive debts, loans, or advancements owed to the person or his estate.  Such a person cannot anticipate the assignment of an expectancy, a renunciation, or a disclaimer.

The Default Plan Doesn’t Make Moral Judgments

It is important to note that, for the most part, the a state statute of descent and distribution does not make moral judgments, other than to assume that an intestate would want his or her property to go to the "natural objects of his or her bounty" after his or her death, as determined by the state legislature in advance of his or her death in a non-personal manner.

Under descent and distribution, a person who wants to plan the disposition of his or her estate cannot transfer property based on his or her own judgment of the heir's or other recipient's moral worthiness.  Related to this point is the fact that under descent and distribution, a person who wants to plan the disposition or his or her estate cannot favor one person in the same class over another.  For example, a parent who has four children, three of whom have been blessed with good fortune and one who has not, cannot favor the unfortunate child over the fortunate children.

The Default Plan Doesn’t Instruct on the Disposition of One's Dead Body

State statutes of descent and distribution are only designed to dispose of an intestate's property.  When a person dies, some matters may need to be provided for other than the intestate's property.  A human body is not property in the sense that it can be bought or sold.  Under descent and distribution, a person who wants to plan the disposition of matters other than his or her estate cannot direct, among other things, the disposition of his or her dead body.

The Default Plan Doesn’t Waive Bond

Under descent and distribution, a person who wants to plan the disposition of his or her estate cannot waive the requirement of having his or her personal representative obtaining a fiduciary bond.  Simple provision can be made in the will for bond to be waived – thus saving the estate money.

Please contact us for further information.

Powell Trachtman Logan Carrle & Lombardo, P.C.
610-354-9700
www.powelltrachtman.com