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Some people fear this will happen if they die without a will. Others have heard rumors about death taxes, and they think this is the “guvmint’s” final money grab as you’re taking your last breath. The latter concern—estate taxation—actually affects only about 1% of us, which is the topic for another blog. The first scenario could affect any of us, however.
If you die without a will, you, the “decedent,” die “intestate.” Every state has intestacy laws. These laws provide for the final distribution of any assets that aren’t otherwise legally disposed of, say, by beneficiary designations or joint ownership rights.
In Colorado, who gets what depends on which family members are around. Is there a surviving spouse, with or without children or grandchildren? How much each “level” of survivor gets depends on several factors. Never assume that the surviving spouse gets 100%.
If there are no descendants or surviving spouse, the probate court will look for the decedent’s parents. If none are alive, the search continues for siblings. If none, the court looks for grandparents, then aunts or uncles, and finally first cousins. If there are still no takers, only then will the state of Colorado get the property.
If this family situation describes you (or if you’ve recently attended an unusually horrific family reunion), a will or trust giving your property to your friends and favorite charities may be your best bet. But don’t worry about the government trying to take advantage of your lack of planning—at least not in this instance.
By Deborah Hoskins, JD, CFP
The Wise and the Wary Blog