You know that Estate Planning is important - but have you ever really thought about why? If you’ve put off creating or updating your Will, Trust or other parts of your Estate Plan, we want to remind you that having a complete plan is the only way to fully protect your loved ones and your legacy.
When you take the time to create an Estate Plan, it means you won’t die intestate. Intestate succession can add tremendous stress to the already-difficult time your grieving loved ones are facing. Learn:
What is Intestate Succession?
Intestate succession is basically what happens when someone passes away without a valid Will or some other legal declaration. The result? A court distributes property according to current state laws rather than using the decedent's plan (or input from those closest to him or her). Later, we’ll review some specific examples of how this may look.
***For a more thorough understanding of intestate succession, read our complete guide to Dying Without a Will.
***Get even more information about What Is Intestate and learn how the process differs from probate in our additional guide we’ve written about the subject.
Intestate Heirs & Property: Who Gets What?
While intestate succession will vary from state to state, there’s often a common order of succession that takes place. With some slight variations, the order of succession will be something along the lines of:
Your next of kin
If no next of kin, escheat (or transfer) to the state
Keep in mind, every state has its own rules, so the above may slightly vary.
If you have a blended family or other special dynamics, your Estate Plan becomes even more important. Adopted children, step children or an heir who did harmful wrong or criminally caused your death could alter the order and call for special circumstances.
And finally, it’s important to note that not all assets are subject to intestate succession laws. Assets in a Trust, those that are payable on death (or TOD) accounts and policies that have direct beneficiaries named could avoid state laws and bypass the probate and/or the intestate process.
Intestate Succession Examples
Jenny died intestate in California. Jenny was divorced and had two adult children. Based on California intestate succession laws, her children will inherit everything.
However, there is a caveat here: a good rule of thumb is to think about assets Jenny owns in her own name - most often these would not pass based on the rules of intestate succession. So, as long as proper beneficiaries were designated, the following would not be passed through per California intestate succession laws.
Assets put into her Living Trust
Her life insurance proceeds
Her IRA, 401(k) or other retirement accounts
Any payable on death and/or transfer on death (TOD) accounts
Any property she owned as joint tenancy, or any community property with right to survivorship
Any vehicle that’s held by a TOD registration
Everything listed above will automatically go to either the beneficiary she named on that account, or the surviving co-owner of a property.
Bill died intestate in Texas. Bill was married but had no children. According to Texas intestate law, Bill’s wife would receive everything except the following:
Property transferred into his Living Trust
His life insurance proceeds
His IRA, 401(k) or other retirement accounts
Any payable on death bank accounts
Property he owned with his wife in joint tenancy
Important Intestate Succession Terms to Understand
Understanding intestate succession can be somewhat confusing. Knowing the terms that are typically used can help.
Intestate - When you die without a Will, you have died intestate. Alternatively, if you die
with a valid Will, you have died testate.
Domicile - Your permanent, legal home.
Descent - How real property is distributed; property passes by descent.
Distribution - How personal property will pass after you die.
Distributee - The receiver of property.
Descendants - Your bloodline: father, child, grandchild.
Next of Kin - Living people standing at the same closest degree of a blood relationship.
Decedent - Someone who is deceased.
Consanguinity - Blood relationship between two people.
Lineal Consanguinity - Blood relationship in a direct line from one another.
Ascending Line - Daughter, mother, grandmother, great-grandmother.
Descending Line - Son, grandson, great grandson.
Collateral Consanguinity - Blood relationship within the ancestors, but do not descend from one another: Aunt, niece vs mother, daughter.
Escheat - When property returns to a state if a decedent has no heirs.
Dower - Provisions a law made for widows to receive husband’s property upon his death.
The best way to avoid dying intestate and adding to your family’s stress is to prioritize your Estate Planning now. Having either (or both) a Will or Trust is the best way to do this. Starting with a Will is easier than you think and takes most people only 15 minutes! Create your Will today.