To the kids equally?
Doesn’t everything go to my kids in equal shares? Why do I need an estate plan?
Does everything go to your children? Maybe. Maybe not. When there is not a will, the inheritance is based on the family situation. So you can’t use assume that probate will work out the same way that it did for one of your friends.
But let’s assume for a second that all of your kids will inherit property equally. Think about the family home that will be inherited by three children. For purposes of my example, we will think that all three kids are married. When the homeowner parent dies, the three kids that (in my example) inherit the house are going to immediately have to deal with real estate taxes, insurance, maintenance, utilities, and other expenses. What if one of the kids wants to buy that house from their siblings? Is this transfer considered a gift from a tax law perspective? Does the potential buyer child have the financial resources to make the purchase? What if most, but not all, of the kids want to sell the house? How would you deal with the hold out child or the hold out spouse? Will you need the probate court’s approval to sell the house? How early in the probate administration will the house be able to be sold? Will the kids be able to take advantage of a hot real estate market? Or will they have to wait for the process to play out?
In an estate plan, you can clarify that you want everything that you want to happen with the disposition of your property. It’s not always best to leave everything equally to everyone. That is like kicking the can down the road.
So everything might go to the equally to your kids. But that’s a very oversimplified analysis.