Many assume that Grandma has a will hidden in her filing cabinet or dresser drawer. However, families are often shocked to learn there never was a will. What happens if Grandma dies and there is no will?
Each state has different guidelines for what happens if you die without a will. Understanding the basics to make the appropriate plans for your estate is essential.
Intestate: What Does It Mean?
Perhaps you’ve heard the term intestate when you’ve previously talked about estate planning, but do you know what it means? Intestate is what happens when someone dies before creating a will. Intestate processes determine who will inherit someone’s assets when they die. Intestacy is different from state to state, so it’s important that you have proper estate planning handled.
If there is no will when someone dies, their assets will be frozen until the courts go through all the estate details. Then, state intestacy laws come into play. Intestate laws are used to determine how the person’s assets will be distributed. This is a very time-consuming process but can be avoided with simple estate planning.
What Happens to Your Money If There Is No Will?
The state intestacy laws decide where your money goes if you die with no will in place. When intestate laws are invoked, the estate goes into probate court. The court will appoint someone to be the representative who oversees the distribution of your things.
The probate process begins by stopping creditor claims against the estate. This reduces how long creditors have to file a claim against the estate. The personal representative must first pay off debts with the assets you have. Then, whatever is left is awarded to your heirs.
Who will get your things if you die without a will? Each state has a different set of intestate rules, so your location decides how your property will be divided. Typically, a spouse will get the first priority of inheritance. Then, it’s children, grandchildren, parents, and siblings.
Another question to consider is who oversees dividing everything between the heirs. The order of priority usually applies in this situation too. The surviving spouse is the first choice for the personal representative, followed by children, grandchildren, parents, and siblings. If there is more than one person at the same priority level, the court may decide to name them co-administrators or choose to only have one administrator.
What Happens to Your Children If There Is No Will?
If you don’t have a will when you die, or you haven’t named your children as the beneficiaries of your estate, your children’s rights are in the hands of the court. Parents must prioritize estate planning for the sake of their children.
A judge will factor a child’s best interests into assigning guardianship if there is no will in place when the parents die. Truthfully, this can be extremely difficult because a judge does not know the family dynamics. Often, a relative will voluntarily take the responsibility of raising their family member’s children. However, if you want a say in raising your children, you need to create a will that states your wishes.
Property and Taxes: What Happens Without a Will?
Estate taxes vary between the states, but here are some of the basics you should know.
Federal law requires any estate worth more than $11.58 million is taxed by 40 percent. If the estate is worth less than that, it is typically exempt from federal taxes. However, state taxes are different, especially if you haven’t written a will before you die.
Some states require taxing an estate worth more than $1.6 million at a rate of up to 16 percent. Other states use a formula to divide the taxes between your heirs. Also, dying without a will could forfeit the marital deduction for your spouse. If it were documented in your will for your spouse to inherit, they would inherit your entire estate tax-free.
Relationship Status and Dying Without a Will: What You Should Know
We’ve discussed some general information about what happens if someone dies without a prepared will, but there is more to know based on relationship status at the time of death.
- Several things can happen if you’re single and die with no will. First, your children will inherit everything unless you have a will that specifies differently. If you don’t have children, your parents (if they’re still alive) will be in charge of your entire estate. However, if you have no children and your parents preceded you in death, your siblings will inherit equal shares of your estate. If you are a rare case with no surviving spouse, children, siblings, or nieces and nephews, your extended family on your mother’s and father’s side will divide your possessions equally.
- If you’re married and die with no will, your spouse will get at least a portion of your estate. Remember, each state has different rules, so how your heirs inherit can vary drastically if you die with no will.
- Your state may not legally recognize a domestic partnership. Most states will give a domestic partnership the same rights as a spouse depending on the ownership of the property. It’s important to check your state’s regulations about allotting assets when someone dies.
Think of a will as your final way of expressing your wishes when you pass away. With appropriate planning, you can dictate how you want things divided. Each state has different laws regarding inheritance, and each one is designed to do what is in the best interests of your heirs. However, the only way to ensure that the right things go to the right person is to create a will before it’s too late.