Intestate Succession – What You Need to Know
When someone dies, it is often a stressful, sad time. This time of grieving can be made a little easier with an estate plan in place. Without it, it is said that the person dies intestate.
If you are dealing with this scenario, the following information may help you navigate the situation a little easier. Just remember that each state has its own intestate succession laws. For specific questions, you may want to talk to an estate planning attorney, especially if you are concerned about getting your share of the estate.
The Probate Process
It’s important to understand that the estate will likely need to go through the probate court whether a valid will exists or not. The court must determine the validity of the will if one exists and approve the person appointed to act as the executor of the estate. If there is a will, the executor will distribute the assets according to those instructions. In an intestate succession, the executor follows state rules for distribution.
In either situation, the executor must perform certain tasks, which include taking inventory of the estate, informing and paying creditors, and filing and paying any taxes. Probate is similar for all estates with the exception that intestate succession laws must be followed if no will is presented.
What is Intestate Succession?
An estate is considered to be intestate when there is no will or trust. Another situation is where a will is presented and determined to be invalid. Perhaps it is because the person wasn’t mentally competent at the time of the signing. If the court deems the will to be invalid and no other will is presented, the estate will be handled intestate.
When no will is found, the court will rule that the property must be distributed according to the intestate succession laws of that state where the decedent lived and had property. This includes personal property, real property, and money held in accounts.
Who Gets the Estate in Intestate Succession
Each state has specific rules for how much an heir receives and in what order, but intestate succession generally follows a specific order. It’s usually the decedent’s surviving spouse first with children second. If there are no spouse and children, parents are next in line to inherit, followed by siblings, then grandparents. Any other relatives are last. If there are no relatives, the estate transfers to the state.
Adopted children are usually treated as biological children in intestate matters as the decedent’s heirs. However, stepchildren aren’t included as relatives. In a few states, they are listed but only after all other relatives are considered.
Assets Not Included in intestate Succession
Not all assets of an estate are included in intestate succession. If an asset has a payable on death (POD) or transfer on death (TOD) with a named beneficiary, it goes to that person regardless of the line of beneficiaries in the state law.
Bank accounts, retirement accounts, and life insurance proceeds are examples of POD or TOD. Your vehicle may have someone listed as TOD, which would allow it to bypass the probate process and go straight to that heir.
Some states allow real property to pass directly to a named heir. Real property includes the decedent’s home and any other real estate they owned. However, most states don’t allow this direct passage for real estate unless there is a joint owner or tenants in common with rights of survivorship. Community property with right to survivorship in states is also handled the same way.
Any assets listed in a living trust would not be subject to the intestate laws of the state. This includes real estate, investment accounts, and even personal property. The trust is deemed to be a separate living entity and the named trustee will receive the assets.
How Property is Divided Intestate
State laws are similar in how property is divided when someone dies without a will. In general, all people with the same relationship will inherit the intestate estate equally. For instance, all siblings of the decedent would inherit an equal share of the estate. If there are two brothers and one sister, each would get 1/3 share of the decedent’s estate property.
If there is no surviving spouse, the children of the decedent would inherit the entire estate equally as well. The same is true of grandchildren.
In the situation where two of three children are still living and the third child who has passed away has two children, those two would split the one-third share that would have gone to their parent.
How the Surviving Spouse and Children Inherit
One major difference in intestate succession among the states is with the spouse and adult children. Some states allow the surviving spouse to inherit the entire intestate estate while other states split the inheritance between the spouse and the children.
Another issue is when the decedent had children with a previous partner before marrying the person who would become the surviving spouse. In this situation, the spouse would inherit a portion of the estate with the children inheriting the rest. In Alabama, the spouse gets half, and the children split the other half.
If the children belong to the surviving spouse in Alabama, the distribution is just a little different. The surviving spouse receives the first $50,000 of the property and half of the rest. The children inherit the rest of the decedent’s estate.
If the decedent had a spouse and parents in Alabama but no children, the spouse would receive the first $100,000 and half of the rest of the estate. The parents would inherit the rest.
In California, the spouse inherits all community property and part of any separate property along with children, grandchildren, and parents, if they are still living. This state also allows for your siblings to inherit with your spouse if the parents aren’t still alive. They would split the separate property with your spouse equally. California doesn’t allow a spouse who is legally separated to be a beneficiary to the property.
In Texas, the spouse inherits all community property and one-third of separate property. The children inherit everything else. If the children didn’t belong to the surviving spouse, they also receive half of the community property. If the decedent had parents and siblings to survive them, the parents would receive half the estate and the siblings would split the other half.
As you can see, state intestate succession laws are similar but unique. It’s best to work with an experienced probate attorney who can help you understand your state laws.
Defining Community Property
Two terms often used in the probate process are community property and separate property. Separate property generally refers to the property you owned before your marriage.
Community property is considered any property purchased during your marriage. Inheritances received during the marriage from other family members are considered separate property. Any gift given to one person in the marriage is also separate property.
Children Born Outside of Marriage
If the decedent had children who were born outside of any marriage, they may be entitled to receive an inheritance as part of the intestate succession. They will need to show evidence of paternity to the probate court.
This may be in the form of a document that shows the decedent acknowledged the relationship, a birth certificate, or a DNA test. Paternity must be established in some way with clear and convincing evidence for the court to allow the children to receive their portion of the inheritance.
Other Aspects of Intestate Laws
Intestate succession must account for various situations where someone can lay claim to an estate. For instance, half-relatives are counted the same as whole relatives. If you have a half-sister, she will inherit a share equal to your whole-blood siblings.
Survivorship period is another term considered in intestate succession situations. State law requires the beneficiary to survive the decedent by a certain period for their family to receive that portion of the property. In Texas, it is 120 hours. If you and a sibling were in an accident and died at the same time, the sibling’s family may not be entitled to the inheritance. If that sibling lives for a couple of weeks after the decedent’s death before passing away, their children will receive that portion of the decedent’s intestate estate from the aunt or uncle who passed away first.
Advancement is another term you may hear in intestate succession. An advancement is an asset given to the beneficiary before the death of the decedent as part of their inheritance. For example, a person may have decided to give a piece of property to one of their children while they were still living with the idea that the other children would receive their share after their death. An advancement must be proven to the court. Otherwise, it is considered a gift rather than part of their inheritance.
If someone doesn’t follow the line of intestate succession, it will be difficult, if not impossible, to receive any inheritance without a will. If you have family members or other people in your life who you want to inherit a portion of your personal property, you will need to have a will in place. An estate planning attorney can help you set up a will or trust to ensure the heirs you wish to receive a share of your estate actually get it and avoid the challenges of intestate succession.