“To be safe, just get things done now. Don’t delay. Take care of business.”

By James Ward

James Ward

What happens if you die without a will or trust? Well, if you have joint co-owners, or if you’ve named beneficiaries on accounts, the assets should pass to those other people.

But, what if you don’t hold property like that. Then, the state has a plan for your assets. The legislature has already decided exactly how things will be distributed. If you don’t want their plan, make sure you have your own plan, and make sure that it’s clear and in the proper legal format.

What if you have a husband and no kids? Does it all go to your husband? Maybe. Maybe not.

My client died and left about $4 million worth of property to her daughter, who was very close to her, but she also wanted to leave something to the two daughters of her deceased son.

One, who had some “issues,” would be able to live in one of the houses until her death. The other granddaughter, who had a history of drug problems and was distant from the family, would receive only a small amount of money.

Once my client died, her daughter, who was financially sound without her mother’s money, and who was grieving with the loss of her mother, took no action for a couple of years, and then she became ill.

She could have done a will or trust, but she did neither.

In California, even a holographic will, which is one prepared by hand, is legal. She only needed to write out on a piece of paper that everything she had was to pass to her husband. No notary or witnesses are required on a holographic will.

We’ll never know what was going through her mind when she became ill, and later died unexpectedly, but she likely assumed that everything she was to inherit from her mother’s trust would pass to her husband. It certainly would have passed to him if she had predeceased her mother, but she didn’t, and then she took no action following her mother’s death, so we had no written document expressing her own wishes to transfer assets at the time of her own death.

What happens now? It’s nearly inconceivable, but the granddaughter with drug issues who was not close to the grandmother or the daughter who was supposed to inherit it all, will now get about $2 million in property because the intended heir, the living daughter, took no action to assure that it would pass to her own husband when she died.

This was not the result that my client or her daughter had imagined, but it’s the plan devised by our legislature. If you want your own plan, you have to take action.

I fully realize that many people, when faced with their own illness and possible death, focus on that, and little else. That’s very understandable. And while it’s normal for many people to rush to get things in order when they’re ill, it’s also normal for another set of people to just ignore getting their financial affairs in order because they don’t want to face those decisions.

Many people think that they can handle these financial matters later, once they’ve recovered and are feeling better. Sometimes, yes, and sometimes, no. What if you take a sudden turn for the worse and can’t act?

Also, what if you’re healthy and then you have a sudden stroke or heart attack or serious car accident?

To be safe, just get things done now. Don’t delay. Take care of business.