If you pass away without a Will, each state will apply its “laws of intestacy” to determine who will get what. Essentially, it is an Estate Plan that the State has created for you.
In Colorado, if you pass away without a will, the order of distribution is:
(1) Surviving Spouse; (2) Descendants; (3) Your Parents; (4) Your Siblings; (5) Surviving Grandparents; and (6) Relatives on whichever side of your family has the most survivors.
Essentially, your money could end up going to relatives that you have never met, or more commonly, relatives you don’t want to provide for. Instead of letting the State decide where your hard-earned money goes, create your own Estate Plan where you decide.
If you pass away without a will, it can mean probate for your love ones.
Even if the Intestacy Statute does not seem so bad, remember that in order for those people to receive those funds, your Estate goes through an expensive and lengthy probate process where the money is really going toward court costs and attorney fees. Additionally, in the unlikely situation that all of your family members predecease you, the State will get those assets. However, in your Will, you can put a church, charity, or non-profit organization in place to avoid that!