The Hidden Costs of Not Having a Will or Estate Plan
Life is unpredictable, and putting your affairs in order can feel like just another item on a long to-do list. However, taking the time now to create an estate plan helps protect your loved ones, safeguard your assets, and provide clear guidance for your family during stressful situations. Here are some of the challenges you may face when estate planning falls by the wayside.
When You Don’t Decide, the State Decides
If you’re like many people, you’ve worked hard your entire life, and you want your loved ones to benefit from that work after you’re gone. Your will and other estate plan documents let you specify who will receive your money, real estate, and other assets after your death.
But what happens if you don’t have an estate plan? If you die intestate (without a will), then Massachusetts intestacy laws decide how your assets are distributed. They may go to your spouse, children, or even your surviving parents or siblings. While some individuals and families may be content with this, many prefer to have control over who receives what.
The Financial Burden of Probate
Probate is the process of validating (or “proving”) a will and distributing the deceased person’s assets. However, even if someone dies without a will, their assets still must go through probate. In Massachusetts, probate typically includes the following steps:
- A family member files a petition for probate
- The court appoints an estate administrator
- The administrator creates an inventory of the deceased’s assets and their values
- The administrator notifies the deceased’s creditors, beneficiaries, and heirs
- The administrator uses the assets to pay any outstanding debts
- The remaining assets are distributed to beneficiaries
Probate is often a long and expensive process, but when you have no will, it’s even more so. This is because the court must select an administrator, and it can take a significant amount of time for them to locate and appraise all of your assets.
The good news is that there are a number of estate planning strategies that can help you avoid probate. Placing your assets in a trust is one of the simplest strategies. When you transfer assets to a trust, the trust becomes the legal owner of those assets. Technically, the assets are no longer part of your estate, so there’s no need for them to go through probate.
What Happens if You Become Incapacitated Without a Plan?
This is an important consideration, and it’s one that many people overlook. Estate planning isn’t just about making sure your assets go to the right people. It also allows you to create a plan of action in case you become seriously ill or otherwise incapacitated.
If you fall into a coma or are unable to communicate your wishes for any reason, your healthcare and financial decisions may be left up to someone you don’t fully trust. That’s where estate planning tools like powers of attorney (POAs) and health care proxies come in.
A power of attorney grants a trusted person the authority to make important financial and legal decisions on your behalf. When you create your POA, you can specify what types of decisions your representative is authorized to make. Health care proxies work similarly, but are only authorized to make medical decisions.
Some states also allow individuals to create healthcare directives (or “living wills”), which articulate their preferences for medical care. It’s important to note that in Massachusetts specifically, these directives are not legally binding; however, they can still serve as vital guidance for the person you choose as your health care proxy.
Missed Opportunities for Protecting Assets and Loved Ones
In Massachusetts, estates valued at more than $2 million are subject to a state-level estate tax. On the federal level, the estate tax threshold is $13.99 million.
If you anticipate owing any kind of estate tax, your estate planning lawyer can help you develop personalized strategies to minimize your tax burden. These strategies can include charitable donations and giving gifts to family members.
Even if you don’t think you’ll owe estate taxes, prudent estate planning can still shield your assets and ensure that your loved ones are cared for. For example, if you want to leave your home or other valuable assets to your children but are concerned about creditors or probate delays, your lawyer can help you set up a trust or other legal protections.
Estate planning can seem logistically complex, but if you don’t take the time to do it, you’ll leave your loved ones exposed to legal and financial risk after your passing.
Family Conflicts and Emotional Strain
Having an estate plan is financially advantageous. However, one of the most significant benefits of planning is reducing the emotional strain and uncertainty your family faces during key life moments, like a serious illness, injury, or death.
Many people rely on informal plans or verbal agreements with loved ones, but these can be misunderstood, disputed, or ignored when emotions are high. Without clear legal guidance, family members may disagree about who should inherit what, how assets should be managed, or how to carry out your wishes.
A thorough, up-to-date estate plan provides clarity and legal authority, giving you and your loved ones a sense of security and helping them navigate grief. Family disputes over inheritances can lead to lifelong divides, and that’s a legacy no one wants.
The Bottom Line: Estate Planning Is Worth It
Estate planning may feel overwhelming at first, but taking the time to create a clear, thoughtful plan brings lasting benefits. By putting your wishes in writing, you help protect your loved ones and provide them with security and peace of mind. Working with an estate planning law firm can make the process manageable and give you confidence that your plan is solid.
