What Happens If You Don’t Have an Estate Plan?

Why estate planning matters

Estate planning isn’t just for the ultra-wealthy—it’s for anyone who wants to make sure their loved ones are financially secure. If you have minor children, family members with special needs, or young heirs who may not be financially savvy, setting up a structured plan is essential.

Without an estate plan, your assets could be distributed in ways you never intended, creating unnecessary stress for your heirs. Worse, young or inexperienced beneficiaries could mismanage a large inheritance, spending too quickly or making poor financial choices.

That’s why estate planning, especially the use of trusts, is one of the best ways to ensure your beneficiaries are protected and your legacy is preserved.

What happens without an estate plan?

Without a proper estate plan, courts may appoint guardians for minors, but there’s no guarantee the funds will be managed the way you intended. Young heirs who inherit a lump sum all at once may not know how to handle it responsibly, leading to impulsive spending or risky financial decisions.

For loved ones with special needs, receiving an inheritance outright could jeopardize their eligibility for essential government assistance like Medicaid or Supplemental Security Income (SSI). Additionally, assets may be tied up in probate, delaying access for months or even years.

A well-structured estate plan helps avoid these risks, ensuring that your loved ones receive financial support in a responsible and protected way. At Guerra Wealth, we specialize in helping families set up estate plans that align with their goals.

How trusts provide structure and control

One of the most effective ways to protect your heirs is through trusts. Unlike a traditional inheritance, a trust allows you to specify how and when assets are distributed, rather than leaving everything in a lump sum.

For example, instead of a young heir receiving a large inheritance at 18, a trust can distribute funds gradually—such as providing for education, housing, or other needs over time. This prevents reckless spending and ensures financial stability.

A special needs trust can also provide long-term financial support for a disabled family member without affecting their eligibility for government benefits. This ensures they receive the care they need while maintaining financial security.

Setting up a trust may seem complex, but it doesn’t have to be. Our team at Guerra Wealth can guide you through the process to ensure your assets are handled exactly as you wish.

Types of trusts to consider

Different types of trusts serve different purposes. Here are a few options that can help protect your beneficiaries:

• Revocable Living Trust – Allows you to maintain control of your assets while ensuring a smooth transfer after your passing.
• Testamentary Trust – Created as part of a will, this type of trust is ideal for ensuring minors receive structured financial support.
• Special Needs Trust – Provides financial security for a disabled beneficiary while keeping government benefits intact.
• Spendthrift Trust – Helps prevent irresponsible spending by limiting direct access to funds.

Choosing the right trust depends on your family’s needs. If you’re unsure which option is best for you, schedule a consultation with Guerra Wealth—we’ll help you make the right choice.

Preventing overspending & financial mismanagement

When a young or inexperienced heir receives a large sum of money, the temptation to spend it quickly can be overwhelming. Some common risks include making impulsive luxury purchases, taking on risky investments, or loaning money to friends and family without considering long-term consequences.

Trusts eliminate these risks by distributing assets in a controlled way, ensuring that beneficiaries receive financial support without mismanaging their inheritance.

If you want to make sure your legacy is used wisely, talk to our team at Guerra Wealth about creating a customized estate plan.

Estate planning is about more than money

At its core, estate planning isn’t just about passing down wealth—it’s about protecting your loved ones and giving them financial stability. A well-structured plan can:

• Ensure minors and dependents are financially secure.
• Prevent large inheritances from being mismanaged.
• Provide for special needs beneficiaries without disrupting government benefits.
• Offer peace of mind knowing your family will be cared for.

Taking the time to put an estate plan in place now means your family won’t have to face unnecessary financial stress later.