Elder Law and Estate Planning: The Rules of Intestacy




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Intestacy, or “What Happens if You Don’t Have a Will?”

Contrary to the implications of the advertisements of some estate planning attorneys, dying without a will is not inherently catastrophic. While wills (and will substitutes, such as trusts) are strongly recommended for many people for a variety of reasons, all states have rules governing distribution of the assets of a person who dies without a will. A person who dies without a will is said to die “intestate” and the rules that deal with this scenario are the “rules of intestacy.”

While the rules of intestacy vary from state to state, the common thread is that they all call for the distribution of the deceased’s estate to the “next of kin.” The first in the line of succession is always the spouse of the deceased, the children of the deceased or both. 

Where the deceased is survived by both spouse and children, some states call for the deceased’s property to be distributed split equally among the spouse and children.[1] Other states give the spouse at least some sort of preference over surviving children under the theory that there is more of a moral and cultural obligation to support one’s spouse than to support one’s adult children. (Minor children, it is presumed, will be supported by the surviving spouse.)

New York, for example, allocates the first $50,000 of the deceased’s property to the surviving spouse and provides that the remainder be split, one-half to the surviving spouse and the other half equally amongst the children.[2]

The Uniform Probate Code[3] has a different approach. A uniform (or “model”) act or code is a series of rules written by experts in a field, which are recommended by these experts for adoption by states. They are not inherently binding on anyone and do not have the force of law except to the extent that they are adopted by states as their own laws. Some uniform rules have enjoyed universal adoption (such as the Uniform Commercial Code), while some have been largely ignored (such as the Model Penal Code). The Uniform Probate Code has enjoyed a medium level of success, having been adopted in full by 17 states and in part by many others. To ensure that you know which rules to apply in your own state, you should search for your own state’s probate laws.[4]

The Uniform Probate Code gives the surviving spouse a strong preference in intestate distribution. Under the Code, where the deceased is survived by spouse and children, all of whom are also children of the spouse, the spouse receives the entire estate.  Presumably, this is based on the theory that the surviving spouse has as strong an incentive to provide for the mutual children as did the deceased.

If the deceased is survived by a spouse and children who are not also children of the spouse, the Code gives the first $150,000 to the surviving spouse and the remainder to the split, one-half to the surviving spouse and the other half amongst the children.[5] (There are also some more farfetched scenarios covered by the Code slightly differently.)

If there is only a surviving spouse and no children, the general rule is that the spouse collects the entire estate, though the Code does give a small percentage of the estate to the decedent’s surviving parent(s) even when there is a surviving spouse.[6]

If there are surviving children and no surviving spouse, the children inherit the entire estate, in equal shares.  If one of the children is deceased but had surviving children of his or her own, those children would inherit his or her share. For example, if Deceased had three children, Alan, Barry and Chloe, but Barry is pre-deceased, having left 4 children of his own, Barry’s 4 children would split Barry’s 1/3 of the estate equally (i.e., each of Barry’s children would inherit 1/12 of the entire estate). This type of distribution is known as a “per stirpes” or “by representation” distribution.[7]

If the deceased has no surviving spouse or descendants, state laws will assign the order of the “next of kin.”

Typically, the order is:

(1)  Parents of the deceased

(2)  Children of the parents of the deceased (i.e., siblings; and if the siblings are not alive, and nieces and nephews)

(3)  Grandparents of the deceased and then their descendants (aunts and uncles and then cousins)[8]

Note that each class of relatives only receives anything if no classes of higher priority survive.  For example, if the decedent has a surviving sibling, then the deceased’s grandparents, aunts, uncles and cousins are out of luck. However, within a class of relatives, the children of a pre-deceased relative will typically receive his or her share. For example, if Molly is survived by her living sister, Rachel, and the children of her deceased brother, Michael, Molly’s estate will be split with one-half going to Rachel and the other half split among Michael’s children.

If a person has no surviving relatives (states vary in how distant a relative can be considered a next of kin), the person’s assets will “escheat” and go to the state. While this is extremely rare, this does place greater urgency upon a person with no known relatives to dispose of property during lifetime or through a will.[9]

For purposes of these rules:

·         Adopted children typically have full rights as though they were natural children.  However, they must be legally and formally adopted. Foster children or children living with the deceased but not formally adopted do not receive rights under intestacy. Conversely, adopted children are not generally considered the children of the natural parents, once adopted.

·         Step-children do not have the status of children unless they are formally adopted.

·         Half-siblings are also typically considered siblings and have full inheritance rights, equal to those of full siblings.

Because of the US Supreme Court’s 2015 ruling in Obergefell v. Hodges[10], same sex married couples have full spousal rights to inherit in every state. In states that recognize common law marriage (most do not), common law married couples also have full spousal inheritance rights.  However, in a relationship where there is no state-recognized marriage, even if there is a long-term relationship (even if, for example, the couple lived together for many decades and raised children together), the surviving member of the relationship will have no rights under the rules of intestacy. This also intensifies the needs for couples in long term non-marriage relationships to provide for each other by will or other method.

Note also that the rules of intestacy make no provision for spouses of heirs. For example, a son-in-law of the deceased would receive nothing under the rules of intestacy. If there are no other living relatives, a deceased’s assets would escheat to the state before going to a son-in-law.

It is important to emphasize that these are just the default rules.  People can control who will receive their assets after death through a validly executed will or by distributing assets during their lifetime. These rules apply only insofar as the deceased’s assets are not properly disposed by will or other device.  While there are some limitations on what a will can do (which are covered in other presentations), the law gives great latitude to people to dispose of their assets as they see fit.  The rules presented here are merely the best efforts of states to apply a fair and consistent set of rules to govern the distribution that was not accomplished by the deceased.



Footnotes

[1] Georgia, for example. See O.C.G.A. § 53-2-1 (Georgia does stipulate, though, that the spouse’s share must be at least 1/3 of the estate)

[2] N. Y. Est. Powers & Trust Law § 4-1.1

[4] Here is a useful resource to find the probate laws of every state: https://www.everplans.com/articles/state-by-state-probate-laws

[5] UPC § 2-102 

[6] See id.

[8] See, e.g., N. Y. Est. Powers & Trust Law § 4-1.1

[10] 135 S. Ct. 2071 (2015)