Intestate

Intestate is a legal term that describes the status of a person who has died without a valid last will and testament. When this happens, you essentially forfeit your right to decide who inherits your hard-earned assets and property. Instead of your wishes guiding the distribution, the government of your state or country steps in. A probate court will oversee the process, following strict, impersonal formulas known as intestacy laws to divide up your estate. This public and often lengthy process can lead to outcomes you never would have chosen, potentially bypassing close friends, unmarried partners, or beloved charities. For an investor who spends a lifetime meticulously building wealth, dying intestate is like carefully constructing a masterpiece and then leaving its fate to a complete stranger who doesn't know you or what you valued.

As an investor, your primary goal is to build and preserve wealth for the future—for your retirement, your family, and your legacy. Dying intestate is a critical, and entirely avoidable, risk to that legacy. It's the ultimate unforced error in personal finance. All your diligent research, portfolio management, and long-term planning can be seriously undermined by this single oversight. Imagine your carefully selected stocks being liquidated at an inopportune time to pay court fees, or your shares in a family business being passed to a relative with no interest in running it. The distribution of your assets will follow a rigid legal script, one that has no knowledge of your relationships or the specific needs of your loved ones. It disregards your intentions and can inadvertently create the very financial instability you worked so hard to prevent.

When an estate is intestate, the legal system takes control. The process generally unfolds in a few key steps:

1. **Court Appointment:** A probate court officially appoints a person, known as an //administrator//, to manage the estate. This person functions like an [[executor]] but is chosen by the court, not by you.
2. **Inventory and Appraisal:** The administrator must locate, inventory, and appraise all your assets, from your investment accounts and real estate to your personal belongings.
3. **Debt and Tax Settlement:** Before any [[heirs]] receive a penny, the administrator uses the estate's assets to pay all outstanding debts, taxes (including potential [[estate tax]]), and administrative expenses.
4. **Distribution by Law:** The remaining assets are distributed according to the state's intestacy laws. These laws provide a rigid hierarchy of relatives (e.g., spouse, children, parents, siblings) who are entitled to inherit.

This one-size-fits-all approach is blind to the nuances of your life. A lifelong partner to whom you were not married might receive nothing, while a distant relative you barely knew could inherit a substantial portion of your wealth.

Leaving your financial affairs to the laws of intestacy is fraught with problems that can have a lasting impact on your family.

• Total Loss of Control: You have zero say in who gets what. The beneficiary you wanted to provide for might be completely cut out.
• Family Disputes: The impersonal nature of the law can create resentment and conflict among family members, especially in blended families or situations where relationships are complex.
• Excessive Costs and Delays: The probate process for an intestate estate is often more complex, public, and time-consuming than for an estate with a will. Legal and administrative fees can shrink the total inheritance available to your heirs.
• Guardianship Crisis: For parents of young children, this is the most terrifying risk. Without a will, you cannot name a guardian for your minor children. The court will be forced to make this deeply personal and life-altering decision on your behalf.

Value investing is fundamentally about managing risk and making intelligent decisions to secure long-term value. Estate planning is the ultimate application of these principles to your own life. Just as you wouldn't invest in a business without understanding its long-term strategy, you shouldn't leave your own life's work without a clear plan. Creating a will, and perhaps a trust, is a low-cost, high-impact action that provides an enormous “margin of safety” for your family's future. It is the final, crucial step in your financial journey, ensuring that the value you spent a lifetime creating is transferred efficiently and purposefully. To neglect it is like discovering a wonderful company trading far below its intrinsic value and simply walking away. It is an opportunity you can't afford to miss.