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estate planning

A recent study conducted by Caring.com revealed that nearly two-thirds of Americans don’t have any kind of estate planning document in place. This means that they haven’t yet documented their will, which is a serious concern.

In America, if someone dies without a will, post their death, the family members may be happy or in serious trouble depending on the legal aspects, which are complicated in certain states. Research indicates New York is the worst place to die without a will, and Alaska, Georgia, and Tennessee are in line.

The underlying issue is the complex guardian-related rules and regulations prevailing in these states. In case someone dies without a will, the deceased’s child would have to be in court-designated guardian’s protection and cannot opt for someone of their choice.

While many legal procedures are drafted in the US courts to deal with someone who dies without a will, one of the prominent ones is probate. It is a highly court-supervised set of procedures for dealing with a dead person’s estate. Of the states in the US, New Jersey seems to be the most vulnerable in case of the probate procedures as the people here have to wait for a long period (almost a year) to get the legal aspects covered. In addition, the residents of this state face the highest inheritance tax rate, between 11 and 16 percent.

Yet another case is that of New Mexico, which was earlier the fifth worst place in the US for someone to die without a will. Ironically, it ranks second when it comes to the probate category. The residents deal with a pathetic situation with a waiting period of close to two years for all the legal formalities to complete.

While New York residents face a probate period of seven to nine months, those in Iowa, Illinois, and Kansas are considered least risky to die without a will. The reason for these states being regarded as less bad is that they have low probate processing periods and few inheritance taxes.

The best part is in Iowa, the inheritance taxes are between 5 and 7 percent, while the probate processing takes place within a year. Above all, there’s no estate tax here.

Yet another amazing example is that of Kansas state where there’s no inheritance tax and no estate tax. Besides, the filing of the petition, probate processing, and all legal procedures about it are completed in just a period of four to five weeks.

In the case of Illinois, there’s no inheritance tax. However, an estate tax equivalent to 18.5 to 40 percent of the estate value must be paid. Here, if someone dies without a will, their estate is regarded as “in intestacy.” Once declared so, a court-appointed official completes the formalities, pays their debts and taxes, and distributes the assets among the beneficiaries based on the state-governed rules.

Apart from these, nine states, namely California, Idaho, Arizona, Nevada, Louisiana, Texas, New Mexico, Washington, and Wisconsin, are governed by community property laws. According to these, if someone dies, the spouse gets half of the property, and the other half is shared among other beneficiaries.

In contrast, 38 states follow common law policies for inheritance. This means the spouse need not get the half property; however, they will get their claim in the estate, though ownership will depend on the person whose name is attached to the property.

The agency Caring.com partnered with GoodTrust, an estate planning company, and surveyed 1500 American adults. The surprising part is that nearly 34.5% of them said they had “no idea” of what would happen to their estate if they died without a will.

Daniel Sieberg, co-founder of GoodTrust, says:” After someone dies, their loved ones may face a protracted and complicated probate process.”

In this regard, Sieberg emphasizes that anyone who dies without a will puts their heirs at serious risk, particularly those in New York and Alaska, must be motivated to reach out to estate planners soon. He adds that it’s never too late to get started. In case of any assistance or advice in these matters, it would be useful to reach out to a Louisville estate planning lawyer.

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