I recently gave a presentation about all the legal issues the come up after you die. During the presentation, we talked a lot about probate and how that process works. For those of you who are new to the estate planning world, probate is the legal process by which you administer someone’s estate using their last will and testament. Throughout the presentation, the same question kept coming up – what happens if you die without a will?
What’s the Legal Lingo?
Many people may not know that if you die without a will, the laws of the state where you pass away will control how your property is distributed. The legal term for dying without a will is intestate. The laws that dictate how your property will pass are referred to as intestate succession laws.
What Assets are Involved?
Depending on what assets are left in your estate will determine what assets will pass under these laws. It’s important to remember that assets that are jointly titled (i.e., bank accounts and real estate) and assets with beneficiary designation forms (i.e., life insurance policies and retirement accounts) are usually not part of your estate and will pass to the individuals listed on those accounts or forms. Because of this, it’s important to know and understand what types of assets you have and how they will pass after your death. It’s also important to review your beneficiary designation forms on a regular basis.
Who’s in Charge
When you die intestate, there’s no will available to name an executor. Because of this, the state intestacy laws will outline a list of people who are eligible to serve in that role. When you die intestate the person that is appointed to manage and distribute your estate is called the administrator. This person is typically entitled to a fee for making sure that your estate is administered and your assets are distributed.
Who Gets What? Basic Rules of Intestate Succession
While every state’s intestate succession laws differ, only blood relatives and those that are legally adopted can inherit from someone who dies intestate. Which means you need a will if you want to share your estate with a friend, unmarried partner, or charity.
In general, if you die with a spouse, the spouse gets the largest share with the children sharing the remainder. If you die without a spouse, but with children, your children will share your estate. More distant relatives can inherit if there are no spouse or children remaining.
If you die without any spouse, children, or family members than your property with “escheat” to the state. However, this situation only every arises on a very rare occasion because of the intestacy laws are designed to make sure that your assets pass to anyone your related to no matter how remotely you may be related.
The Downside
As mentioned before, there are lots of things that intestacy leaves out and many situations that may not be accounted for. For example, if you have a disabled child, the intestacy law does not consider special needs planning that will likely need to be done upon your death. It also does not consider planning for leaving assets to minor children. There are many other special circumstances and situations that need to be considered in an estate plan that state law could never account for.
Your family’s circumstances are unique and could benefit from a tailored estate plan, rather than a “one size fits all” estate plan that state law outlines in its intestacy succession rules. Your family members and loved ones may all have differing needs that can be clearly addressed in an estate plan that is designed to suit your situation.
If you are in need of a tailored estate plan or need advice on how to handle your assets after your death, contact us at (914) 840-2529 or (703) 791-9618 to speak with one of our estate planning attorneys.
