Ideally, before you pass away you have written a will to delegate who gets what part of your estate in the event of your death. Having a will gives you peace of mind about your estate is divided after you pass. With Orbit Wills we make it simple and easy to create your will and settle your affairs before you pass. But what if you die without a will? Who gets your money and property? And who gets to decide?
When you die without a record of your final will and testament, you are deemed to have died “intestate”. In this situation, your state intestacy laws dictate how your estate and assets are allocated to surviving “heirs” (in addition to any children, your surviving spouse parents, siblings, and other family are considered heirs). Any real estate, personal possession, and other property are included in this distribution. Since intestate sussesion laws are different between states, your property in another state will be subject to that state’s laws. Because there is no named executor in this situation, the state will suggest a person(s) who is equipped to become one. This list usually includes spouses, grown children, and close family. One of the people on this short list may be called upon by the court if there is an instance when your estate must go into probate.
How your assets are disturbed upon your death as deemed by intestate succession laws can vary significantly based on your marital status and whether or not you have dependents.
Distribution of Assets
When a single parent passes away without a will, their entire estate goes to their child. If they have more than one child, their estate is split into equal shares and distributed among their children. If someone who is single but childless dies without a will, their estate would go to their parent(s) instead. In the case that both parents are deceased, the estate would then be given to any surviving siblings in equal shares. If there are no surviving heirs (children, grandchildren, parents, siblings) the estate is divided evenly between the father and mother’s side of the family.
How the estate of a married person without a will is allocated depends of whether their assets were joint (marital) or separate property. Though succession laws vary by state, typically if the assets of the deceased were martial property then they are given to the surviving spouse. If, however, they were separate property, those assets would go in shares to the spouse, children, parents, and other heirs. The exact way these shares are divided varies from state-to-state.
Additionally, If a married person dies without a will, the portion of the estate that goes to the spouse may be inedible for marital deduction. Marital deduction is the tax laws that allows the deceased to bequeath property or large assets with little to no taxation involved. When you die without and without named beneficiaries of your assets, the money you leave may be heavily taxed upon your death.
Since the recognition of domestic partnerships varies from state-to-state it’s important to be aware of your particular state’s regulations. In many cases, domestic partners are afforded the same rights as as spouse. The distribution of assets in this context would depend on how those assets are owned. If one partner dies without a will and the assets from that partnership are joint community property, those assets would go to the surviving partner.
If the parent of an underage child dies without a will and there is no suitable spouse to care for them, the guardianship of that child is determined by the courts. They will of course aim to provide that child with the best possible caretaker. However, the courts may not always be aware of preexisting family dynamics, and thus may unwittingly rule against the best-interest of the child.
Assets such as life insurance policies and retirement accounts usually don’t fall under succession laws. This is because insurance policies and banks accounts typically ask for a pre-selected beneficiary to those assets. Since those funds already have a designated beneficiary they are excluded from the assets that are divided. Because of this, it’s extremely important to keep the beneficiaries of your assets up to date.