Friday, November 26, 2004

Younger Parent Estate Planning: Fundamentals: Dying without a Will: Part A

A Last Will and Testament is a document that a person (called a "testator") signs in accordance with certain formalities required by law; that pertains to probate assets only (not to non-probate assets); that names the persons who should receive the probate assets upon the death of the testator (those persons are called "beneficiaries"); that names the person whom the testator wishes to be in charge of taking the assets through the probate process and dealing with the court (that person is known as the "personal representative" in Florida and most other states, "executor" in a few); and that may also nominate the people who would care for the children if the children are orphaned as a result of the testator’s death (those persons are known as "guardians").

The Will can be quite simple. It can also be quite complex, especially if it addresses death tax issues or establishes trusts for one purpose or another (such as providing for the children), issues that we will address later.

If a parent dies without a Will, his probate assets will be distributed according to "the laws of intestacy". To die "intestate" is, literally, to die without a Will. "Intestate" derives from the Latin word intestatus: in means "not" and tesatatus is the past participle of testari, "to make a Will".) The laws of intestacy are state laws and vary to some degree from state to state. In Florida, if a parent dies without a Will, then the probate assets will be distributed as follows:

1. If the decedent’s children are also the children of the decedent’s spouse, then the spouse gets the first $60,000 worth of the deceased parent’s probate estate plus one-half of the balance.

2. If one or more of the decedent’s children are not also the children of the decedent’s spouse, then the surviving spouse gets half of the probate estate. She doesn't get $60,000 off the top.

3. The other half of the probate assets goes to the children. That half is immediately subdivided into equal shares for each child. So, for example, if there are three children, each child gets one-third of that half, or a one-sixth share of the probate assets.

4. If the deceased parent is not survived by a spouse, that is, if the deceased parent is single, then all of the probate assets are divided in equal shares among the deceased parent’s children. With three children, for example, each would inherit a one-third share.

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