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We pay our taxes every year. But most of us don’t do what we should to prepare for the end of life.
In fact, a recent survey indicated that 60% of Americans have not done any estate planning. If they unexpectedly pass away, there will have left no direction as to what to do with their remaining possessions.
So what happens when someone dies without a will? Let’s take a closer look.
It Depends on Where You Live
A person who dies without leaving a last will and testament is said to have died “intestate.” Their estate then falls under the authority of the probate court. Each state has its own laws on what should happen to a person’s possessions under these circumstances.
It Depends on What Was Left Behind
The laws governing these situations are usually more or less complex depending on the size of the estate.
Small estates are those where the deceased person owned no property, and their assets were valued at less than $100,000. This scenario is often the case for an older person who already sold their home to cover medical care, or for a young person who had not yet accumulated assets.
In these circumstances, surviving family members can file a Declaration of Small Estate to collect and divide remaining possessions. Anyone applying for heirship who is not a surviving spouse or child will have to complete an affidavit declaring their relationship to the deceased person.
If the deceased person owned a home and/or assets exceeding $100,000, the process for dealing with their estate becomes more complex.
It Depends on Who the Survivors Are
The rules governing the distribution of a home or assets differ significantly depending on whether the deceased person was married, had a domestic partner, or had surviving children.
When a person dies without a will, there is a hierarchy of relationships that determines how the state will be divided. This hierarchy generally goes as follows: spouse, children, parents, siblings, descendants of siblings.
In other words, by default, the property goes to the person’s spouse. If they do not have a spouse, it goes to their children, and so forth.
There are some exceptions to this. For instance, if a person who dies is unmarried and childless, their estate will go to their parents if both parents are living. If, however, only one parent is living, it will be divided among the surviving parent and siblings.
If any of the above relatives does not survive the deceased person, their possessions will be divided and split between relatives on the mother’s side and on the father’s side of the family.
Again, the rules differ if a spouse or partner survive the deceased person. In some cases, the handling of the estate might be much easier. It depends on how the assets were owned.
For instance, many couples have joint ownership of vehicles, houses, and even bank accounts. Any asset that was owned jointly will immediately become the property of the surviving spouse.
But what about pieces of property or bank accounts that were solely in the deceased person’s name? In this case, it depends on whether the deceased person had children.
If the deceased person was childless, their spouse would usually inherit all of their property, regardless of any other surviving relatives (such as parents and siblings). If there are surviving children, they will generally also receive a portion of the estate.
What if We Never Got Married?
Marriage rates in the United States are on the decline, with more couples choosing to simply live together rather than tie the knot. Many feel that marriage is “just a piece of paper.” But what happens if you die without it?
Unfortunately, the rights of a live-in partner are much less than those of a spouse when someone dies without a will. If the couple had children together, the estate will go to the children. Otherwise, it goes to parents and siblings.
At this juncture, an unmarried partner has essentially three avenues to claiming property from the estate:
- Claiming ownership of joint property
- Working with the children, parents, or siblings to gain access to the property
- Pursuing legal action
Most states do not recognize the rights of an unmarried partner to an estate, available avenues for legal action may be limited.
What Does “Divided Evenly” Mean?
You may have noticed that, in several cases, the protocol is to divide assets “evenly.” But what does mean, exactly? How do you divide a house, a vehicle, and cash evenly?
In this scenario, it depends on the ability of the survivors entitled to the property to work together and reach an agreement. If the survivors are not able to reach an agreement, legal action must be taken to determine the distribution of the property.
What Happens When Someone Dies Without a Will? Don’t Let Your Family Find Out
As we’ve seen, the answer to “What happens when someone dies without a will?” is not simple.
You may not have any control over this situation if you are dealing with the passing of a loved one. But you do have the opportunity to make sure your family does not have to deal with it. If you haven’t drafted a will yet, now might be the time to start.
Of course, estate planning is even more complicated if you’re a business owner. Learn more here about getting your business financials in order.