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How Does Dying Intestate Affect Your Estate?

8-Minute Read
Published on June 9, 2020
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You’ve probably heard many times that you need a will to protect your assets after you die. If you die without a valid will or any will, you will not have control over what you leave behind. Instead, a probate court gets control of all your assets. When your will goes to a probate court in intestacy, the court will distribute your assets according to the state law rather than your decedent’s wishes.

Writing a will can be emotionally taxing. However, dying intestate, or without a valid will, can have negative repercussions for your estate.

What Is Intestate?

Simply put being intestate means not having a will before you die. When this happens, the state takes responsibility for dividing up your assets among your descendants via a probate court. Each state has different laws regarding how a person’s assets are divided.

The laws of intestate succession vary significantly depending on if you have children, are married, and what your assets are. Most of the time, your property will be distributed based on state law to your heirs, which typically include your spouse, children and grandchildren.

What Is Intestate Succession?

Intestate succession is the set of default laws dictating who receives what of a deceased person’s assets. Each state defines intestate heirs by their relationship to the deceased. However, there are some commonalities in most states. The spouse is usually first in line, followed by children. Typically, someone further down the line such as grandchildren will not inherit anything if the successors ahead of them are still living.

The most popular commonality is that a surviving spouse, even if they are estranged, will inherit all the deceased’s estate if there are no children or grandchildren and at least half of the estate if there are. If a child dies before their parent’s death, the child’s children, or the deceased’s grandchildren, will inherit the child’s share. Adopted and biological children are treated the same by probate courts.

After a spouse and children, the parents and siblings are typically next in line. Parents and siblings typically do not receive a share of the deceased’s estate if the spouse and children are still living.

After parents and siblings, family members such as aunts, uncles, nieces, nephews, and cousins are eligible to receive portions of the estate. If there are no living relatives to inherit an estate, the state will receive the value of the estate.

How Does Probate Court Handle An Intestate Estate?

When someone dies who has a will, they will have appointed an executor, or someone who oversees the distribution of the assets. When someone dies intestate, the probate court appoints an administrator to compile the person’s assets. They will then pay any outstanding debts and contribute the remainder to the deceased’s beneficiaries. These beneficiaries will differ depending on state law, so it’s important to investigate your state’s intestate law if you have specific questions.

The assigned administrator will track down any relatives of the deceased and designate their inheritance regardless of their existing relationship with the deceased. This means that, if someone dies and does not have a spouse but has two children, one of whom is estranged, the children will still both receive 50% of the estate.

When the administrator sells the assets, they sell real estate in a probate sale, even if it was shared with a loved one, if that loved one isn’t a surviving spouse. For example, if a child was living with their parent, the house will still be sold in a probate sale. If a spouse was living in the home, the house will not be sold.

Does All Property Pass Through Probate Court In Intestacy?

Some property belonging to the deceased can avoid probate court, even if the person died intestate. For example, if the deceased owned a house with a partner that was not a spouse, but it was owned by both parties, the surviving partner would own the house upon the person’s death.

Additionally, if there are assets with named beneficiaries, those assets will go directly to them rather than through probate court. The most prominent example of this is a life insurance policy.

If the deceased has a trust with a property named in it, whether it is irrevocable or revocable, it is also exempt.

The Importance Of A Will

Death is not an easy topic to discuss. However, if you’ve ever had to deal with someone’s estate that did not leave a clear will, you’ll see why having a valid will is so important. If you want your assets to be allocated to specific family members, friends, or causes that you care about, it’s important to have a valid will. Otherwise, if you die intestate, your estate will be divided according to state laws.

Your family members are the only people who can inherit your estate under state laws. If they die before you, the state will receive the full value of your estate.

If you are in a partnership but are unmarried, your partner will not be protected by intestate succession laws. Additionally, if you have stepchildren or other important people in your life, they will not receive a portion of your assets after you die if you do not have a valid will.

Many people think that they don’t have large enough assets to justify leaving behind a will, or that they’re too young to need one. However, anyone with assets should create a will. Even if you do not have large assets, you can help to save your family a headache in the future by protecting your assets early on as having a will expedites the asset distribution process.

Intestate FAQs

There are plenty of questions that arise when someone dies intestate. The following are common questions and situations that people run in to, including the answers to these questions. If you need specific questions answered regarding your state laws, it is wise to contact an estate planning professional or an estate lawyer to get contextualized answers.

Why Might A Will Be Declared Invalid?

Sometimes, someone has a will and is declared invalid. There are several reasons that a will might be deemed invalid. Each state has strict laws on what constitutes a valid will. Failure to comply with those requirements leads to invalidation. This is all to prevent fraud.

One of the most common reasons a will would be declared invalid is if it was improperly executed. Typically, at least two people who are not named in the will must be witnesses to a will being signed. Some jurisdictions also require that the will be notarized.

Another reason a will is invalid is if it was replaced by a later will. When an individual writes a new will, it overrides any previous wills written. If the assets of a person have been distributed based on a previous will and a new will is found, the assets must be redistributed as dictated in the new will.

If a will was signed under the influence, fraudulently, or under an altered state of mind, a will is invalid. One example if this is that at the end of life, some individuals are on medications or have conditions that render them incapable of understanding the document being executed. Another example is if someone was receiving undue influence to sign the will. Additionally, if someone is under the influence of drugs or alcohol when they sign the will, it is deemed invalid.

Finally, if a will does not have the required content, it will be invalidated. Every will must contain provisions to ensure that the signer understands the reason for everything in the document. The provisions vary from state to state but generally include evidence that the signer knows they are signing a will and that they are designating where their assets will go following their death. There is typically also a provision that appoints an executor to the person’s estate.

What If I Live in A Community Property State?

Community property is everything a married couple owns together and is usually property acquired while married. The purpose of community property is to protect a spouse and their rights. It typically includes all money earned, debts, and property acquired between them.

For example, if a person owned a house before getting married, it is not considered community property. However, if a couple purchased a home together, it is considered community property. The exception is that when a spouse was gifted something or inherited assets, these assets are not considered community property.

There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In these states, your spouse will inherit all your community property if you die, plus some of your personal property, even if you have children. Your spouse’s portion of the separate property depends on if you have living parents, children or siblings.

What About Friends, Companions, and Other Loved Ones?

When an administrator divides up an intestate person’s assets, they do not take in to account the deceased’s non-familial relationships. Even if these people were mentioned in an invalid will, they will not be taken into consideration because the will is invalid.

There are a few repercussions that should be noted here. First, if the deceased is unmarried but living with a partner, that partner will have no claim to the inheritance. Therefore, if a person wishes to provide for their partner postmortem, they must have a valid will in place.

Additionally, some people choose to include friends, caretakers or other loved ones in their wills. If someone wants to provide for loved ones who are not legally part of the family, they will need to include them in a will that is drawn up by a competent attorney so that the companions are not left out.

What About the Causes Or Activities That Were Important To The Decedent?

Many people will leave portions of their estate to a charity or cause that they care about. Like close friends or loved ones being excluded from a person’s estate unless stated in a valid will, charities will also not receive any payment if the person’s estate is allocated by a probate court.

You may want to allocate property or other assets to an organization, and this can be difficult to write into a will without proper legal assistance. Therefore, it is especially important to discuss these issues during your lifetime with an estate attorney. They will be able to include these causes in a will and make sure that your wishes are respected after you die.

Without a valid will, a probate court will not have the power to allocate money toward charitable causes, even if you have made your wishes known with a will.

Summary: The Importance Of Planning Ahead

It’s vital to have a will if you want your assets to go to your family, friends or causes you care about after you die. Even if you don’t have large assets, you can save your family a lot of time and headache by specifying your wishes in a valid will.

It’s just as important to ensure that your will is valid. Many people choose to revisit their wills in regular conversations with their lawyers or financial advisors. If you don’t have a team of professionals around you, you can still have a notary validate your will.

As you pay off your debt, save and invest, you will also likely be making life decisions such as having children, getting married and more. You should take the time to speak with an attorney who specializes in estate planning to ensure that the people in your life are protected after you die.

As you explore succession planning and other financial topics, be sure to check out our Learning Center. There, you will find resources to help you learn about personal finances, find the financial professionals who can help you make big decisions, and other tools.

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