The short answer is that proper estate planning makes sure that your hard earned assets are going to go to whom you want them to go to upon your death; it is your decision, not the governments.
The legal term for when a person dies without a Will is that they died “intestate.” All states have an intestacy statute that deals with what happens to assets when somebody dies without a Will. In New Hampshire, certain scenarios leave certain results. When the “decedent” (the person who died) dies with a spouse, the spouse may get all of the decedent’s estate, or may just get a little. One example from the statute is, if the decedent had children with the spouse, then the spouse would receive the first $250,000 of the decedent’s probate assets, and then an additional 1/2 of whatever was left over after the $250,000 was taken out. Although, if the decedent’s spouse had children with the decedent and also had children from another relationship, that distribution changes. The spouse is going to get his “spousal share” of the decedent’s assets no matter what, absent a valid prenuptial agreement, because marriage is highly regarded and it is important public policy to protect spouses from being “disinherited” and getting nothing once their spouse passes away. It is just a matter of what you want him to get upon your death.
An important thing to remember is that not all assets will be counted toward what the spouse and children can receive; only probate assets are included in the calculation. For example, if the decedent had a joint bank account with her best friend at the time of her death, then the money in that account would automatically be her friend’s money. If the decedent owned her house jointly with her husband with rights of survivorship, then at the time of her death, the house would be automatically owned by him without the need for him to process the distribution through the Court and include it in the spousal share calculation. If the decedent had a bank account with a payable on death provision to her son, then when she passes away, her son would receive that money outright. All of these situations reduce the amount of assets that will be distributed according to the intestacy statute because they go directly to somebody instead of through Probate, which gives the decedent at least a little more control over where her assets will go, although not as much control as she would have if she had a Will.
After any surviving spouse gets his share, if there are assets remaining, those assets are distributed according to New Hampshire statute. If the decedent had children, then her children get her remaining assets; if she had no children, then her parents get her remaining assets; if she had no living parents, then her brothers and sisters (or their children, being the decedent’s nieces and nephews) get her remaining assets; if she had no brothers or sisters, then her grandparents get her remaining assets; and finally, if she had no grandparents, then her aunts and uncles get her remaining assets. If there is nobody in her family in those categories who are alive at the time of her death, then her assets are going to go to the state. Now, this is not the typical scenario, but it can happen, and the decedent’s second cousin or best friend that she grew up with and spent a lot of time with won’t be able to get her remaining assets, even if she would want him to. One of the main ways to avoid this is to have a Will, which allows you to determine who gets your assets when you pass away, not the state.
Another benefit of having a Will is that you can recommend a guardian over any minor children you have. Recommending a guardian will allow the Court to give deference to that person when it is deciding what is in the best interest of your children. It is best to think of that now so you can make sure that if you were to pass away, the person you want to take care of your children will have a better chance of doing so.
The important thing to remember is that if you don’t have a Will, you lose a lot of control over what happens to your assets when you die. It is well worth the time to sit down with an estate planning attorney to discuss the benefits of having a Will.
Andrea Nelson is an attorney at Hamblett & Kerrigan who focuses her practice in the area of estate planning, including wills, trusts, health and financial powers of attorney. Attorney Nelson can be reached at [email protected].