Have you had a conversation with your family, spouse, or partner about what would happen to your estate upon your death? It’s not an easy subject to consider, nor is it an easy conversation to have. But proper planning can save a lot of headaches and even prevent detrimental decisions from outside parties.

If you have a will or trust, you determine before your death to whom your assets will be distributed, and in what proportions. This gives the owner the power to determine who receives their assets, and in what amount.


But what happens if you don’t have a will or trust when you die? 

When someone dies without a will or trust, the person dies “intestate.” This means the distribution of the individual’s assets are left to the laws of intestate succession in the state where the person resides. These laws vary according to jurisdiction, but typically involve a process called “probate.” The probate process usually provides for a court to set a timeframe for creditors or relatives to make claims on the estate, and then the court uses the intestacy laws to determine what assets should be distributed from the estate. And the court will determine to whom, and in what proportion, the assets should be disbursed.

Generally, the various state laws direct the inheritance of a person’s assets to the person’s closest relatives. For example, if you are single, have no children, but have living parents, your parents would typically inherit your estate. But if you are single, with children, and you still have living parents, your children would mostly likely receive your entire estate.  

Another example would be If you are married and have no children, your spouse would typically inherit all property you owned together. However, if you owned any property independently, then your parents or other relatives, along with your spouse, may have a claim to a portion of that property.  

If you are married and have minor children with your spouse, then your spouse would likely inherit the whole estate. But, if you have a child from a previous partner, then your current spouse will likely receive a portion of your estate, usually between one third to half of the estate’s value. The remaining portion of the estate would be inherited by your child from the previous relationship and possibly put in the custody of your previous partner for your child’s benefit.

These proceeding examples only scratch the surface of the complex and unique relational dynamics that exist for today’s modern family and how they relate to distribution of assets after death. However, it is important to point out that these decisions by courts can be avoided with proper planning and execution of a will or a trust.


Another critical concern people often have related to dying involves the care of their minor children.  If you have a will and have listed a guardian for your children, then the court will typically defer to your choice as long as that choice is in the best interest of the child. One of the most common reasons courts may not honor the guardian request you have made in your will is if the individual selected refuses to accept guardianship or if the individual is no longer capable or serving, due to disability or death. Many individuals choose to select second or third choices for the court to consider in case the originally selected guardian is unable or unwilling to serve.

If you have planned appropriately with a will or a trust, you can also designate an individual to serve as the trustee of your child’s assets. This can be the same individual who will serve as guardian, or it may be a different individual. Upon your death, your child may inherit or receive large financial benefits such as insurance proceeds, property, or investments. Some people may feel the person they select as guardian is not adequately equipped to serve as the financial caretaker for their children. In creating a will or trust, these two important roles - guardian and trustee - can be joined together or split apart as a parent deems best for their child.  

However, for a person who dies intestate and has minor children, the guardianship of the children will be determined by the court. The court considers what would be in the “best interest” of the child in making a selection for a guardian. The court must make this difficult decision with limited information and only a superficial knowledge of your family dynamic. For your child, this guardianship is usually permanent and will remain in effect until they reach the age of majority.

Often the court will appoint the guardian to be the custodian for the assets your children would inherit through the probate process. This means the guardian and custodian would be the same person and would be in charge of caring for your children, as well as managing, investing, and spending these assets.  

The court normally appoints these positions until your minor children reach the age of majority, which is typically at 18 years of age. At that time, your child would be an adult in the eyes of the state and would inherit any unspent portion of the assets held in their trust.  This can be a very heavy burden for a young adult. By using estate planning, you can create a trust entity that would give your trustee power to distribute your trust assets over a longer period of time, even into your child’s adult years.

To summarize, the distribution of your assets and the care of your minor children can be accomplished by using appropriate estate planning, or by allowing the state courts to determine these outcomes. For most individuals, they can appreciate the value of making these decisions based on their intimate knowledge of their financial position and their family dynamic. Proper planning of your estate, with trained professionals, could be very valuable to your children, your friends, and your family.   

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Aaron Black is a financial planner with White & McGowan. Mr. Black is also a licensed attorney in the State of Arkansas who practices law; however, he does not practice law as part of his work with White & McGowan. This article does not create an attorney-client relationship. While this article has legal information, it should not be seen as legal advice. Readers should not rely on this information, but instead, should consult with an attorney if they have questions on legal matters.