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Estate Disasters | Dying without a Will

Estate Disasters Dying Without Will Intestate.jpgSeveral years ago, in my second decade of practicing law, I learned a lot about estate disasters. My mother's aunt had substantial financial resources - resources saved and invested over the many decades of her life. She and her now-deceased husband had saved for old age - for security in their retirement years. She owned her own San Francisco home, had a secure pension and a large stock portfolio. Then, in her early 90s, she had a caregiver to assist her at a time of her decreased mobility, limited hearing, other sensory deficits and lost driving privileges.

In the few years before my mother's aunt passed away, my mother and other relatives' home visits revealed their aunt's increasing fear and paranoia of the outside world, accelerating dependency on the caregiver, and multiple delusions. Her world was closing in on her; she had a siege mentality and trusted no one but the caregiver. In time and over the last three or so years preceding their aunt's death, the caregiver isolated her from family, friends, neighbors and professionals that the aunt once trusted. An estate disaster unfolded on the very day of her death. When the estate was finally settled may years later, the only winners were the lawyers.

There are many roads to estate disasters - caregiver isolation is only one of them. There are a number of mistakes that repeat with regularity. Dying intestate - or without a will - is near the top of the list of estate disasters. California law provides that "any part of the estate of a decedent not effectively disposed of by will passes to the decedent's heirs as prescribed" by California's intestate succession statutes.[1]

Intestate succession laws generally provide that the decedent's intestate share of community property is distributed to the surviving spouse. The intestate share of separate property is distributed to the surviving spouse alone if the decedent did not leave any surviving issue, parent, brother, sister, or issue of a deceased brother or sister. The surviving spouse receives one-half of the intestate estate where the decedent leaves only one child or the issue of one deceased child. Where the decedent leaves no issue, but leaves a parent or their issue, then the surviving spouse receive one-third of the intestate estate where the decedent leaves more than one child or one child and the issue of one or more deceased children.[2]

Conflicts easily arise when a decedent dies intestate, leaving a spouse or other close relatives along with long-distant and separated relatives. A surviving spouse is generally not pleased when Bubba and Barney from Alabama, her deceased husband's long-estranged brothers, show up on her California doorstep to claim two-thirds of her husband's separate property estate. A simple will would have kept Bubba and Barney off the porch and back in their Alabama homes.

That said, even wills do not apply to property which passes by nonprobate transfers (NPTs), since they are not part of the estate. Examples of nonprobate transfers include property where the decedent's interest terminates on death, any property the decedent held in joint tenancy, trusts, transfer on death deeds, and pay-on-death ("POD") bank accounts. There is little question that nonprobate transfers can be integral to estate planning. The problem arises when the benefitting parties to such transfers were unintended.

Real-life problems with NPTs occur when beneficiary clauses are not updated in life insurance policies, IRAs, 401ks and similar pension accounts. It is not unusual that a former spouse is left as a beneficiary on NPTs. This is okay if it is truly the intent of the decedent that his former spouse benefit from his assets, but the problem occurs when his intent is not clear. Other relatives appear at the decedent's passing to challenge the NPT as an unintended transfer. These cases are often resolved prior to trial and settlement asset splits often occur.

If you would like to speak to us about an intestate estate disaster, you can call us at Hackard Law (916) 313-3030. We represent clients where we think that we can make a significant difference in cases where there is a wrongdoer who can be made financially accountable for their wrongdoing. We represent clients in California's major urban areas, including San Diego, Los Angeles, Santa Clara, Alameda and Sacramento counties.

[1] California Probate Code Section 6400

[2] California Probate Code Section 6401

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