If you die without a will or trust, the state determines who will be your ultimate heirs. This distribution plan can be found in the intestacy statutes of each state. The applicable state can be either the location of your legal residence (personal property), or the state in which your assets are located (real property). In Arizona, for example, the law requires that without a valid will or trust in place, only one-half of the community property goes to the surviving spouse if there are children who are not also the children of the surviving spouse.
Estate Planning Attorney
In Arizona, if you die without a will or trust several things might happen. We must look to the assets you own, to see where your assets will go.
If you own assets jointly with someone else, as joint tenants with rights of survivorship, the assets pass to the survivor.
If you own assets as community property with rights of survivorship, the assets pass to your surviving spouse.
If you own life insurance, the proceeds of the life insurance pass to the beneficiary listed on the policy.
If you own an annuity, the proceeds pass to the beneficiary listed on the annuity policy.
If you own an IRA or other retirement account, your account passes to the beneficiary on the policy.
If you own a bank account which is payable on death (pod) to one individual, the account passes to that individual upon your death.
If you own a car, or other asset worth less than $50,000 (or whatever the statutory amount is in your state) the asset can pass to your "heirs at law" with a small estate affidavit. Heirs at law means the law of default.
Generally, if you don't have a will or trust, anything else is subject to probate via the law of default, otherwise known as the law of intestacy. A probate is opened in the county in which you lived. The assets are distributed the way state law decides. If you don't want the assets to go to the individuals who take under the law of intestacy...oh well. If you are deceased, it is probably too late to do anything about it.
Another point of interest. Even though joint ownership and beneficiary designations avoid probate, the assets may not go to the individuals you want to be your beneficiaries. There may also be tax trips in the distributions which can be avoided by proper planning.
Remember, estate planning is all about control. If you plan your estate you will keep control. If you don't do your planning, odd are, you will lose control.
These answers are for educational purposes only and do not pertain to any specific individual or situation. For a full evaluation of what would happen in your particular situation, see your professional advisor.
Estate Planning Attorney
After obtaining the answer from the attorney above, it looks as though now you are probably looking for a solution to the underlying question of "what should I do?" Ask yourself this question: What would your situation look like today if you died? Then, decide how important it is to you to put a plan in place so that the most efficient and inexpensive result will occur at your death. Go see a lawyer who will (1) listen to you and (2) provide a helping hand in planning your estate.
DISCLAIMER: This answer does not create an attorney-client relationship nor will the answer provided be considered confidential. The attorney providing the answer has not been retained to represent the indidivual who has asked this question. This answer is not legal advice and must not be relied upon in making any legal decision or legal action. It is necessary to seek out the advice of an attorney before you take any legal action.