Category: Personal Finance

Keywords: children, state, spouse, surviving, inherit, partners, death, married, child, property

Landing Page URL: https://newsletter.homeactions.net/landing_page/18476/146188

Article Summary:

Are you settling an estate for someone who didn’t leave a will? This can lead to problems, but they’re not insurmountable. Click through to become familiar with intestate succession laws that control who inherits property if no will exists.

Full Article

Did a close relative die and not leave a will? You will face some complexities, but you can get through them if you know the rules.

How will the estate be distributed in the absence of a will? To start with, many assets aren’t passed by will, such as:

• Life insurance proceeds.
• Real estate, bank accounts and assets held in joint tenancy/community property with the right of survivorship.
• Property held in a living trust.
• IRAs, 401(k)s and retirement plans — assuming a beneficiary was named.
• Payable-on-death bank accounts.
• Stocks or other securities held in a transfer-on-death account.
• Real estate or vehicles held with a transfer-on-death deed or title document.

State law provides a list of folks who are eligible to fill the role of executor. Most states make the surviving spouse or registered domestic partner the first choice. Adult children usually are next on the list, followed by other family members.

If you’ve been chosen to serve as an executor, you’ll follow the intestate laws for inheritance rules: spouses, registered domestic partners and blood relatives inherit. Unmarried partners, friends and charities get nothing.

The surviving spouse gets the largest share, splitting the inheritance with the children. If there are no children, the spouse often receives all the property, although there may be exceptions based on state law. More distant relatives inherit only if there’s no surviving spouse and there are no children. If no relatives can be found, the state takes the assets.

All states have rules that bar certain people from inheriting, based on past actions. For example, someone who criminally caused the death doesn’t profit from it. A parent who abandoned or refused to support a child or committed certain crimes against a child cannot inherit from that child.

Further difficulties

There are some thorny questions you may find yourself wondering about. For example, if the couple had separated before the spouse died or if divorce proceedings had begun, the issue of whether the surviving member is still considered a surviving spouse may have to go before a court.

What about common law marriage? Not every state recognizes this; check your state’s laws regarding this semi-legal partnership. However, there is no longer any confusion about same-sex married couples; their situation is exactly the same as any other married couple, in every state.

Interestingly, couples registered as domestic partners or civil union partners and not married may not have all the rights and responsibilities of married people.

Let’s turn to children — many state statutes use the term “issue” to describe who inherits in the absence of a will, meaning direct descendants. Legally adopted children inherit, but what about stepchildren? It depends on the circumstances of the relationship. Foster children? They normally do not inherit as children of foster parents. Adoption situations can further complicate the situation. In the case of underage children requiring a guardian, a judge will have to make a decision.  

The bottom line? Work closely with legal and financial professionals if you find yourself in such a situation.