Understanding Intestacy: If You Die Without an Estate Plan

What is Intestacy?

When a person dies without having a valid will or other estate plan, their property passes by “intestate succession” to heirs according to state intestacy laws. In other words, if a person does not have a will or other estate plan, the state intestacy laws dictate how to distribute a deceased person’s estate. All fifty states have intestacy laws of some sort, although they vary among the states. So dying without a will means the probate court determines who inherits your estate, including personal property, bank accounts, real estate, and the like, through a court-supervised probate process.

The purpose of intestate succession laws is to distribute the decedent’s estate in a manner that closely represents how the average person would have designed their estate plan if they had one. However, these laws can differ dramatically from a decedent’s wishes for distribution. For instance, someone may prefer to leave assets to charities or friends. However, intestacy laws do not provide for these distributions.

Furthermore, intestacy laws do not take into account your family dynamics. For example, if you are single, with no children, and die without a will, your assets go to your living parents. But what if your mother was the only one who raised you and had no contact with your father? Is it fair that your mother only receives half of your assets?

Intestacy Under the Uniform Probate Code

The Uniform Probate Code (the Code) is the starting point for many states’ laws. Nevertheless, the laws of different states vary significantly from each other and from the Code itself. However, the Code represents the best reference for a general discussion.

Under the Code, close relatives inherit before distant relatives. The classes of relatives whose members receive property under the Code include the following:

• your surviving spouse,
• your descendants (children, grandchildren, etc.)
• your parents
• the descendants of your parents (siblings, nieces, and nephews)
• your grandparents
• the descendants of your grandparents (aunts, uncles, and cousins).

The Code treats adopted descendants the same as biological descendants. Under this structure, if no relative exists, the property then “escheats” (goes by default) to the state.

Share Of Surviving Spouse

Under the Code, the decedent’s surviving spouse receives an intestate share. However, the share amount depends on whether you have descendants or children from a prior relationship. The intestate share your spouse may receive be as follows:

• The surviving spouse receives the entire intestate estate if no descendent or parent of the decedent survives the decedent. So, if you don’t have children or living parents, your spouse gets your entire estate.
• The surviving spouse receives the entire intestate estate if all of the decedent’s surviving descendants are descendants of the surviving spouse and there is no other descendent of the surviving spouse who survives the decedent. So if you and your spouse have children and no stepchildren exist, your spouse inherits your estate.
• The surviving spouse receives the first $300,000 plus three-fourths of any balance of the intestate estate, if no the decedent has no descendants but has a surviving parent. So if you don’t have children but living parents, your spouse receives some of your assets, and your parents also receive part of your estate.
• The surviving spouse receives the first $225,000 plus one-half of any balance of the intestate estate if all of the decedent’s surviving descendants are descendants of the surviving spouse, and the surviving spouse has one or more surviving descendants who are not descendants of the decedent. This means that if you have children with your spouse, but you also have stepchildren (children of your spouse), your spouse shares the estate with your children.
• The surviving spouse receives the first $150,000, plus one-half of any balance of the intestate estate, if one or more of the decedent’s surviving descendants are not descendants of the surviving spouse. Therefore, if you have children that are not your spouse’s, your spouse shares the estate with your children.

These provisions illustrate how state laws for who inherits your assets may not potentially be the best for your family’s situation. Remember that your state’s intestacy laws may differ from the Uniform Probate Code, so check your state’s laws.

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How to Avoid Intestacy

For most people, the idea of the state distributing their assets, real property (real estate), and other treasured belongings, is a strong motivator to take prompt steps to start estate planning.

By creating your will, you will be able to:

• Control who receives your assets, property, and real estate.
• Nominate a personal representative to administer your estate.
• Nominate a guardian for any minor children.

A will ensures that you have taken care of your loved ones in the manner you choose upon your death.

In addition to making a will, you should check for assets that are not a part of the will, for example, life insurance policies, bank accounts, retirement, IRA, 401k, and investment accounts. Make sure you have the proper beneficiary designations on these accounts. Checking if estate taxes apply to your estate is also a good idea. You can create a living trust to reduce estate taxes.

If you want the peace of mind to distribute your estate to those you choose, we can help. Start this rewarding process of creating a will using state-specific forms.