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Preparing for the worse sounds exciting, but settling everything before your death is another story. Most of the time people aren’t mentally prepared to die. This can be one of the reasons why others die intestate. It’s a legal concern that anyone may encounter, but hardly do anything about it.
Several queries related to estate distribution with no legal will are left unanswered. And if you’re looking for some reliable sources about intestate estates, you’d come to the right place! In this article, we’ve curated the most frequently asked questions about intestacy laws.
What do intestate and intestate estates mean?
When referring to an individual, intestate refers to a situation when a decedent (i.e., a person who has died) passed away without leaving any valid legal will. Dying without a will is called “dying intestate.”
When referring to assets, intestate is used to describe the properties of a decedent that aren’t effectively and legally disposed of by a valid will. These said intestate assets or properties of a decedent are called intestate estates or simply estates.
Who can inherit and settle the intestate estates?
A decedent’s living spouse and the children are the first in line heir-at-law to invariably inherit the intestate estates. The closer a person to the decedent, the more likely he or she becomes the heir-at-law. This method is under a legal order called intestate succession.
Even if a decedent creates an inheritance plan that leaves nothing to his/her spouse, his/her spouse can still take a portion of the decedent’s estate as an inheritance. The decedent’s children will get half of the intestate estates, while the other half would be inherited by the surviving spouse.
Adopted children and the children born after a decedent’s death are considered heirs. However, step and foster children aren’t considered heirs, unless the deceased step-parent labels them as beneficiaries in his/her legal will.
If the decedent doesn’t have children, the surviving spouse can inherit all the intestate estates. In other states, however, if the surviving spouse doesn’t have living children, grandchildren or great-grandchildren, the parents of the decedent can share with the intestate estate.
Charities, friends, boy/girlfriends, or live-in unmarried partners aren’t considered heirs. They’re typically considered as beneficiaries, as long as they’re mentioned in the will. However, if there’s no will, they’ll receive nothing, regardless of how they’re emotionally close to the decedent.
Ultimately, if no heirs-at-law are identified, the decedent’s estates will end up being “escheat” to the state.
Are there any estates that aren’t passed by will?
Yes. There are a lot of assets and properties that aren’t directly distributed to any heirs or beneficiaries, even if there is a legally valid will left by the decedent. Here are some of them:
● Assets (e.g., vehicles, real estate, stocks, and other securities) held in or with a transfer-on-death (TOD) account, deed, or title document
● Estates held in a living trust
● Estates held in community property with right of survivorship
● Estates held in joint tenancy
● Estates held in tenancy by the entirety
● Funds in any retirement saving plans, like individual retirement account (IRA) or 401(k)
● Funds in a payable-on-death (POD) bank account
● Life insurance proceeds
Also, good news! Debts, be it as simple as cash loan or as heavy as mortgage loan, can’t be inherited by any heirs or beneficiaries. The decedent’s estate is responsible for settling his/her debts if there are any.
If the decedent didn’t leave enough money, the estate is insolvent. In other words, the debts are wiped out in nearly all circumstances. However, if the decedent left all his/her fortunes to you, but asked you to pay his/her debts (or take care of his/her family) in return, you can say no. There’s a need for you to talk with the estate executor regarding this.
What does an estate executor exactly do?
Even if you’re the heir-at-law or beneficiary, you will not do much on the estate settlement. It will always be administered by a lawyer who will act as an “estate executor” or “estate trustee” on the probate court, the legal process by which estates are transferred into the ownership of living heirs and beneficiaries.
If a person dies intestate, it would be the responsibility of a probate court to determine the distribution of the deceased’s properties and assets, even if the deceased family members are still alive. As mentioned earlier, these estates are legally distributed through the most eligible heir-at-law under intestacy laws or intestate succession laws.
Additionally, the main responsibility of an executor is to take legal actions on the intestate estates and make sure to distribute the estates to the rightful heir-at-law. The executor, which is also called “estate trustee” should do the following:
● Collecting information of a decedent’s estate planning documents, like the locations of the estates and the locations of heirs and beneficiaries;
● Ensuring estate fiduciaries (e.g., guardians, trustees, and powers of attorney) have formal authority to act;
● Resolving disputes and settling claims;
● Paying debts and taxes;
● Distributing inheritances; and
● Accounting and closing the estates.
While there are probate courts in every state, every jurisdiction has its framework of intestate succession laws. Some jurisdictions parcel out the intestate estates more to the decedent’s closest relatives, such as a living spouse or children. That’s why consulting state law is deemed necessary.
Furthermore, an estate trustee or executor has to abide by various legislations, including:
● Estates Act
● Estates Administration Act
● Family Law Act
● Rules of Civil Procedure
● Succession Law Reform Act
● Trustee Act
An executor also needs to gather important personal documents of the decedent including:
● Proof of Death (e.g., provincial death certificate or funeral director’s statement of death)
● Birth Certificate
● Marriage Certificate
● Statements and Copies of Assets (e.g., bank statements, insurance policies, mortgages, deeds, guaranteed investment contracts (GICs), and the like)
Typically, the above-mentioned documents will be handed to the estate trustee by the decedent before his/her death. Otherwise, they might be in the hands of the decedent’s spouse or children (if they’re adults), or the decedent’s parents.
Surrendering the decedent’s documents is more likely the only situation when heirs or beneficiaries can give a hand to the executor. Also, the executor has to obtain the personal information of the heirs and beneficiaries, including complete names, present addresses, birth dates, and social insurance numbers.
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This content is brought to you by Tiffany Wagner.
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