When someone dies intestate (i.e. without a valid will), state laws determine how their assets are distributed. Intesta­­­­cy laws vary by state but generally prioritize spouses, children, and other close relatives. However, the process is far from straightforward. Without a designated executor, the court must appoint an administrator to manage the estate and distribute assets according to the law—though this may conflict with the deceased’s presumed wishes.

The appointment of an estate administrator in the absence of a valid will can be contentious, especially if family members vie for the role. Without a will, family members have limited influence over who the court appoints, especially when consequent disputes are likely. Settling an intestate estate is often a much longer and more arduous process than administering a well-crafted will.

Settling an intestate estate is often a much longer and more arduous process than administering a well-crafted will.

Without explicit instructions, the administrator must identify and locate all potential heirs, even those who make seemingly frivolous claims. For example, when the rock star Prince died intestate, 45 individuals came forward claiming part of his $157 million estate. Verifying the authenticity and eligibility of each claimant can be very time-consuming, particularly in large or estranged families. Delays leave grieving family members in limbo, emotionally drained and unable to access funds to cover the significant costs of unnecessary litigation. The process can drag on for years. Legitimate heirs, through no fault of their own, can suddenly become targets and easily face a mountain of legal expenses.

These emotional challenges may also bring unresolved tensions to the surface for families during the distribution process, which can lead to resentment and long-lasting rifts. All the while, court and legal fees, as well as administrative costs, can significantly diminish the estate’s value. In some cases, assets may need to be at the discretion of the court to cover these expenses, devastating some heirs who expect to inherit specific items or properties. Pablo Picasso’s estate cost $30 million to settle, including the sale of priceless art at the discretion of the French court, because he died intestate.

 

THOSE WHO SHOULD HAVE KNOWN BETTER

If you have procrastinated about creating or updating your will, don’t despair. Even notable historical and public figures have died without wills. The results, you will soon see, include prolonged disputes, financial loss, and irreparable family damage.

Abraham Lincoln: Given his background as an attorney, Abraham Lincoln should have understood the importance of having a will, yet he never created one—even during his presidency when he received over 10,000 death threats. He kept some in his White House desk in an envelope labeled “Assassinations.”

Perhaps Lincoln believed his estate was too simple to require a will, or like many, he may have simply procrastinated. His estate, valued at approximately $110,000 in 1865 (equivalent to $85 million today), included properties in multiple states, presidential papers such as drafts of the Gettysburg Address, the Emancipation Proclamation, the Second Inaugural Address, the House Divided Speech, and 146 other letters, writings and speeches. His widow, Mary Todd Lincoln, claimed ownership of those papers, while Lincoln’s son, Robert, argued they belonged to the estate, for him to sell to the highest bidder.

When the estate of Abraham Lincoln was finally settled by an Illinois court, Mary Todd Lincoln received $80,000 (equivalent to almost $1.6 million in 2023) as well as a $3,000 annual stipend (equivalent to $72,000 in 2023 dollars). Her lavish lifestyle and turbulent disposition, though, led to financial instability. Historians speculate she may have suffered from bipolar disorder, which compounded the challenges of managing the estate. A will instituting a regular income stream with spending limitations would have been an appropriate measure to safeguard Mary and her lifestyle. But, unfortunately, Abraham never implemented a will.

Howard Hughes: The eccentric billionaire Howard Hughes died without a valid will at the age of 70 in 1976, leaving a $2.5 billion fortune and no immediate family. Claimants came out of the woodwork, and several wills were deemed forgeries. After 34 years, the courts eventually named 200 of Hughes’s far distant relatives among the reportedly thousands of claimants. The estate was eventually divided among his 22 cousins.

He didn’t know some or even the majority of these people. At one point prior to his death, he reportedly said he didn’t want his money to go to his distant relatives. His legacy could have been directed to causes he cared about, such as the Howard Hughes Medical Institute, if he had planned properly.¹

Martin Luther King, Jr.: The Civil Rights leader’s estate was worth about $250,000 when he was assassinated in 1968, leaving historically significant items like the briefcase he carried on his last trip, his Nobel Peace prize and his personal Bible but no estate plan. More than 50 years after his death, his family was still fighting in the courts over his estate and his legacy.

In the aftermath of the assassination, the King family became well known for their very public legal battles. Unfortunately, the public perception was that some family members were milking the legacy for all it was worth. MLK’s oldest son, Dexter Scott King, the CEO of the for-profit Estate of Martin Luther King Jr. Inc., sought to terminate the nonprofit MLK Center’s use of King’s intellectual and physical property. He allegedly wanted to sell the Bible and medal to a private buyer. Many Atlanta citizens were stunned at the thought of selling items from the civil rights struggle, believing these items belonged to the movement—not to the King family. If a judge ruled in the estate’s favor (i.e. Dexter King), the Center would have had to strip “Martin Luther King Jr.” from its title and no longer exhibit his artifacts. King’s legacy as a champion of peace was overshadowed by his family’s public disputes. It’s impossible to foresee powers set in motion when dying without a will. ²

 

THE ANATOMY OF PROCRASTINATION

Creating a will is like launching a ship across a vast ocean with all your loved ones onboard. There’s no map and your heirs have limited sailing experience. However, you don’t get to go along, even with all your vast navigating experience. Your sailing days are over. Ready or not, it’s time to leave. Now they are on their own.

While many people procrastinate creating or updating their wills, the consequences of dying intestate are far worse.

While many people procrastinate creating or updating their wills, citing fear of complexity or indecision, the consequences of dying intestate are far worse. For some, the process seems far too complicated. Others are saddled with fear of making wrong decisions about—what, when, how much, and to whom. Since no one can predict the needs and opportunities of the succeeding generation(s), the number of imponderables leaves many unable to process the various wealth transfer options. I am surprised how often I hear someone say, “I’ll just let my kids work it out.” However, dying without a valid will is a surefire way of preventing your surviving heirs from being able to “work it out” amongst themselves. It then becomes a matter for the courts, not the kids.

Approximately two-thirds of Americans don’t have a will³, and those with designated gifts to charity represent a small fraction of that number.  As a professional gift planner, most of your visits are with your major donors. These are very important people to your organization. Because you know the results of dying intestate, you’ll do all you can to help them create a will and estate plan, whether or NOT a charitable gift to your organization is included.

Approximately two-thirds of Americans don’t have a will.

There’s an overriding and unavoidable reality that trumps all fear and indecision. No matter how well your heirs have gotten along in the past, their love for you will eventually grow cold, often turning into resentment over the mess you have brought down upon them—all for the lack of a will. Ultimately, failing to plan for your estate risks alienating loved ones and allowing the courts to determine your legacy. Taking the time to create a will and encouraging donors to do the same is a simple act that can save heirs from unnecessary hardship ensuring assets are distributed according to the desired wishes.

Eddie Thompson, Ed.D., FCEP
Founder and CEO
Thompson & Associates

“If we merely aim for the industry standard, then our goal is mediocrity. Emulating the average nonprofit, we are destined to live with all the problems the average nonprofit faces. So, we suggest you aim to be exceptional in your approach to fund development.”  —Eddie Thompson

copyright 2024, R. Edward Thompson