With most things in life, it is cheaper and easier to be proactive rather than reactive. Creating an estate plan before your death has the potential to save your estate a considerable amount of money and headaches for your family.
What happens if you die without a proper estate plan (a will or a trust)?
If you do not take the proactive step to create a will, a trust, or some other legal method to transfer your assets when you die, then your state law and a Judge will determine what happens to your property and your minor children, if you have any. This process is handled in Probate court, and it can be a lengthy and very expensive process. Some states have set fee schedules, while others simply require the fees to be reasonable.
Typically, all assets (after creditors or anyone else makes claims on your estate), would go to your closest living relative, often a spouse or children. To be clear, "closest" does not refer to geographic location. You could live next to your niece or nephew, but your brother or sister may be able to inherit your assets. If no relatives can be found, then your assets will go to the state.
The state (a judge) would also determine who would care for minor children.