As you know, sometimes I like to share content I’ve found online. As a rule, I tend to restrict my research to US sources only, but this time I’m making an exception. As an estate planning attorney, I found this article published by the Daily Mail (in the UK) interesting. It was just posted on 8/31/23 and written by Helena Kelly. Survey results cited in the article state that two-thirds of Americans have no will in place. Here in the states, the statistics have remained steady at 50%, which is still not good. So I hope this information is inaccurate; I’d hate to think it is. In addition to that somewhat staggering number, the article listed some states where dying without a will, called intestate, is more problematic for loved ones. Read on for which states pose the most challenges.
“Do YOU have your estate planning under control? Two thirds of Americans have no will in place – as study reveals the riskiest states to die unprepared
· Research by senior care website Caring.com found half of Americans have ‘never thought’ about state planning
· Survey ranked the least and most risky places to die without a will in place
· New York came out as the worst followed by Alaska, Georgia and Tennessee
Two thirds of Americans do not have a will or any other estate planning document in place, exposing their heirs to ‘significant risk,’ a landmark new report lays bare.
The study by Caring.com found that more than half of individuals had ‘never thought’ about estate planning.
When somebody dies without a will in place, families effectively face a postcode lottery – with some state laws making it more difficult and costly to untangle a loved one’s affairs.
Researchers ranked New York as the worst place to die without a will – followed by Alaska, Georgia and Tennessee.
This is due to complicated guardianship laws in those states which means a child of the deceased is forced to live with a court-designated guardian rather than their preferred choice unless there is a will.
The report also assessed probate laws in each state. Probate is a court-supervised procedure to administer a dead person’s estate.
According to Caring.com, New Jersey scored worst in the probate category as families are left waiting over a year to see the process through.
What’s more, residents in New Jersey – which was ranked sixth overall – face the highest inheritance tax rate of between 11 and 16 percent.
In New Mexico, the fifth worst state overall to die without a will, came out second worst in the probate category – with residents facing up to a two-year wait to see the process through.
In New York, families face a probate wait time of between seven and nine months.
By contrast, Iowa, Illinois and Kansas were ranked the least risky states to die without a will.
This is due to low probate processing times and minimal inheritance taxes.
For example, in Iowa, most estates are probated in less than one year while the inheritance tax is between 5 and 7 percent.
On top of that, the state does not have an Estate Tax in place.
And in Kansas, residents face no inheritance tax and no estate tax. Typically, the filing of a petition to begin the Probate process and appointing an executor takes between four and five weeks.
Illinois citizens face no inheritance tax but must pay an estate tax worth between 18.5 and 40 percent of its value.
When an individual dies without a will, their estate is considered ‘in intestacy.’
From there, A court-appointed administrator will compile all of the deceased’s assets, pay any debts or taxes, and distribute the remainder to beneficiaries depending on the rules of the states.
When somebody dies without a will in place, families effectively face a postcode lottery – with some state laws making it more difficult and costly to untangle a loved one’s affairs
Nine states – including Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin – operate by ‘community property’ laws.
These rules stipulate that a spouse automatically owns half of what they earned during the marriage.
So when one dies, half of their estate goes to their partner =- while the other half is split between other beneficiaries.
Contrastingly, 38 states apply ‘common law’ policies to inheritance. This means spouses of the deceased are not necessarily entitled to half of their assets.
Despite this, many of these states give the spouse a right to claim some of the estate – but the ownership of the property is determined by the name attached to the property and whomever’s income was used to purchase it.
Caring.com partnered with estate planning firm GoodTrust surveyed 1, 500 American adults. Some 34.5 percent said they had ‘no idea’ what would happen if they died without a will in place.
Daniel Sieberg, co-founder of GoodTrust, said: ‘After someone dies, their loved ones may face a protracted and complicated probate process.
‘While anyone who doesn’t have an estate plan exposes their heirs to serious risk, those in certain states like New York and Alaska should be extra motivated to engage in estate planning sooner rather than later. It’s never too late to get started.”
My estate planning services are available in Ohio and Kentucky, so I am intimately familiar with the laws, taxes, and so forth in those two states. I can’t confirm whether the information in the above article related to other states is accurate; however, it illustrates that laws vary from state to state and that it is never a good idea not to have an up-to-date will. Never. If you are in the “no will” group, let’s change that now. Call me at 513-399-7526 or visit my website at www.davidlefton.com.
Source: Daily Mail.com 7/31/23 Helena Kelly