What Happens Without an Estate Plan?

by Kelly Mroz
If you don't have a will, the state will distribute your property.

If you don't have a will, the state will distribute your property.

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A good estate plan considers what might happen to you in the future. While death is in everyone's future, the future might also include a time when you are unable to make or communicate decisions for yourself. You can prepare documents ahead of time to name someone to make decisions for you, and to provide an advance directive to guide important decisions. You can decide where your property goes, name a guardian for your minor children, and protect assets from being squandered by your heirs. Without an estate plan, the courts and the legislature will make these decisions for you.

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Power of Attorney

A durable financial power of attorney is a document that is useful if you are unable to make decisions for yourself. You can designate a person to step in and handle your financial affairs. You can also choose to withhold certain powers, such as the power to give away your property as gifts. If you do not have a power of attorney, and you become incapacitated and unable to make decisions for yourself, your relatives or friends will need to ask the court to appoint them as guardian to enable them to take over your affairs. You will have no say in who the court appoints. This can be an expensive process and your financial affairs will become public record.

Health Care POA and Living Will

A health care power of attorney is similar to a financial power of attorney, but it is specifically tailored to enable someone to make health care decisions for you. You can also include a living will, which enables you to direct your health care or your physician as to what kinds of treatment you do or do not want if you are in a coma or if you have a terminal condition. If you do not have a health care power of attorney, your loved ones may need to obtain a guardianship to make decisions for you. Without a living will, your guardian can make decisions that are against your express wishes.

Last Will and Testament

The cornerstone of an estate plan is the Last Will and Testament. This document enables you to decide who gets your property when you die and who is in charge of probating your estate. You can also name a guardian for your minor children. The court will then give strong deference to your choice, which minimizes the chance that your children will be subject to a long court battle, or end up raised by someone with whom you are not comfortable. If you die intestate, that is, without a will, state laws control distribution of your property. States have predetermined lists of who gets a share of your estate, and they try to distribute the money the way most people would choose to on their own -- to the person's closest legal relatives. Letting the state decide what to do with your estate can lead to a very different result than the result you might have wanted.


Trusts are flexible estate planning tools. They can be funded before or after you die. Trusts funded before your die provide a faster payout to your heirs and avoid probate costs. The money can be disbursed slowly to your beneficiaries, or held until your heirs reach a specified age. If you do not have a trust, your assets are part of your estate, and, if you do not have a will, your assets will pass to your heirs via intestate succession.