If you die without having made out a Will, what happens?  Does your property just pass to the State of New Jersey, leaving your spouse and children destitute?

A good number of people have told me that they believe their money will go to the State, if they don’t have a Will in place at the time of their death.  While this isn’t necessary true—in fact, it’s probably untrue in, at least, 95% of the cases—a Will does allow you to have a far greater say in who is to receive your money, and in what manner, than does not having a Will.

But before I tell you how your money will pass if you fail to sign a Will, I’ll have to provide you with some basic estate planning terminology.  When a person dies with a Will, they are said to have died “testate.”  If they die without a will, they die “intestate.”  If a person dies testate, the terms of the Will determine how their property passes: who gets it, how they get it, when they get it.  If a person dies without a Will, the State of New Jersey, essentially, writes a Will for them.

For those that die intestate, their Will is found at New Jersey Statute 3B:5-1 to 5-14, which is entitled “Intestate Succession.”  If you currently don’t have a Will, perhaps you should peruse these sections of the New Jersey Statutes, because that is your Will for all intents and purposes.

While it is a very good thing that the State provides a statutory scheme for how the property of intestate persons passes, it is not necessarily a good thing that people simply rely upon that statutory scheme for purposes of their own Will.  I believe that to be true, because in many cases, the statutory intestate scheme differs significantly from the manner in which most people would want to leave their estate.

For instance, if you are married with children and you die without a Will, your spouse receives the first $50,000 of your estate, then your spouse and children divide the remainder of your estate.  Now, I have never had anyone come into my office and ask me to draft a Will that provided for such a disposition of their estate.  If they did, I’d probably advise them against such a course of action.

Using just this one example, let’s explore what could happen to this estate in its administration.  Dad died intestate.  He had a Wife and two children.  After Dad died, the Wife went to the Surrogate’s Office and was appointed the Administrator of Dad’s intestate estate.  Mom is now in my office and is asking for help in administering Dad’s estate.

Let’s say Dad’s estate total $250,000, of which $180,000 is a house that was solely in Dad’s name, in which Mom and Dad lived together.  The remaining $70,000 is in a brokerage account.  Let’s also assume that Dad has $20,000 in debts:  funeral bills, medical bills, etc.

In short, I would tell Mom that the debts had to be paid, that she could retain the remainder of the brokerage account, or $50,000, and that the house would have to be divided between her and her children.

But what if the children want their share of the house in cash?  After all, Mom lives in the house, they don’t.  They want their money now.  Do you see the problem?

There are so many problems that could result from not having a Will that’s it’s impossible for me to explore them all in the short amount of space I’m given to write my article.  It would take a book.  But it takes very little space to tell you that it is better to plan than to simply leave things up to chance, or the State.