Summary: Failing to create an estate
plan can be a risky proposition. Leaving your legacy to your state's intestacy
laws creates a possibility that your wealth will be distributed in a way that's
different than you would have wanted. Leaving behind no plan also opens the
door to risks like estate litigation from people claiming to be your legal
heirs. With a complete plan that includes a will or a will and living trust,
you can make certain that your specific and personal objectives are made clear
in valid legal documents.
In February 2015, an Iowa grandmother
named Christine passed away at a hospital in Des Moines. According to her
obituary, Christine was survived by two children, two grandchildren, one
great-grandchild and "her husband of 23 years, Mike." Like a lot of
people (too many, to be truthful,) Christine died with no estate plan in place.
That meant that Christine's estate would go through Iowa's probate system and
be distributed according to Iowa's intestacy laws.
Christine's daughter asked the probate
court to name her as the administrator of her mother's estate. In her court papers, the daughter asserted
that she and her brother were Christine's only heirs at law. Sometime after
that, Mike entered the case. He asked
the court to remove the daughter. The daughter fought against this
removal, arguing that Mike had no legal standing to ask the court to do
anything in Christine's estate. You see, Christine and Mike never obtained a
marriage license. Mike's claim was that he and Christine were common-law
spouses, which the daughter argued against.
Several states have passed laws
eliminating the recognition of common-law marriage within their borders, but
Iowa isn't one of them. In Iowa, a common-law marriage occurs when two people
agree that they are married, cohabitate continuously as partners, and act like
a married couple in public. If Mike met all of the legal standards for a
common-law spouse in Iowa, then he potentially was Christine's legal husband
and entitled a full spousal share under the intestacy laws. Following Iowa's
intestacy rules, that would have meant Mike received one-half of Christine's
assets and Christine's two kids split the other half.
The probate court ruled for the
daughter, concluding that Mike had not proven that he qualified as Christine's
common-law husband. Mike appealed but, during the appeal process, he
surrendered the argument that he and Christine were common-law spouses. Without
possibly qualifying as Christine's common-law spouse, Mike was what's called a
"legal stranger" to Christine and not entitled to request the
daughter's removal and not entitled to receive anything from Christine's
estate.
This protracted litigation points
several different ways that intestacy can be problematic and reasons why you
need an estate plan. First, Christine's lack of a plan either frustrated her
goals or else needlessly cost her family time, money and stress. Perhaps Mike
was a trusted and beloved partner to Christine for many, many years. If that
were true, it seems possible that Christine might want to remember him in her
estate. By creating neither a will or trust, Christine ended up leaving Mike
nothing. On the other hand, perhaps Christine objectives were for all of her
assets to go to her two children. If she had put an estate plan in place, it is
possible that her family could have avoided the prolonged litigation that
ensued over her estate.
A second reason is specific to states,
like Iowa, that recognize common-law marriage. If you have a committed partner
whom you've never married, and live in a state that recognizes common-law
marriages, it is important to realize that your partner might possibly qualify
as your common-law spouse. If that's true, then your partner may have certain
spousal rights regarding your estate. An experienced estate planning attorney
can help you understand what your rights and obligations are, and develop an
estate plan that meshes these obligations with your estate planning goals.
This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com.
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