According to CNBC, 67% of Americans do not have an estate plan. If a person dies without a will, the state follows intestate laws, which generally will leave most assets to the surviving spouse.
For someone who has concerns about where his or her assets will go, it is essential to plan ahead and understand the rules.
Joint ownership matters
In many cases, spouses jointly own property and assets. In these instances, when one spouse passes away, the surviving spouse typically becomes the sole owner of those jointly held assets. This applies to real estate, bank accounts and other property owned jointly with the right of survivorship.
Debts and liabilities
In general, creditors can only hold the debtor responsible for debts. However, if the surviving spouse was also a party to the agreement, then he or she would be liable. Tax debt remains after death. The spouse would handle it as usual when filing annual tax forms.
Beneficiary designations
Certain assets, like life insurance policies, retirement accounts and bank accounts with designated beneficiaries, go directly to the named beneficiaries. This is a good way to ensure other heirs receive something from the estate as these accounts will not go through probate.
Intestate laws
Pennsylvania law states in the event of no will left by the deceased person, the spouse inherits everything if there are no children or heirs. Otherwise, the spouse and other heirs will generally have to divide the estate.
Whether a surviving spouse automatically inherits everything when their partner dies depends on various factors. It is important for couples to engage in open discussions about their estate plans to ensure the other upholds their wishes upon their death.