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What happens if a loved one dies without a will? Millions of us are bound to find out, because two-thirds of American adults lack willpower, according to a recent study by Caring.com.
If a person dies without a will or intestacy, the probate court decides who gets the deceased’s assets, said certified financial planner Vid Ponnapalli, founder of Unique Financial Advisors LLC in Holmdel, New Jersey.
“But as the court distributes the property, it’s ultimately up to the survivors to claim their rights,” he said.
For an intestacy situation, the probate court appoints an executor for the estate who will follow a process according to the laws of the state where the deceased lived.
“Generally, this process, first, is to identify the kinship, that is, the lineage, of the deceased,” Ponnapalli said. “This process can be time-consuming and require children to prove in court that they are your offspring.”
There is great uncertainty about what the courts will decide in the absence of a will, said Andrew Schwartz, senior vice president of Madison Planning Group in White Plains, New York.
“Equal and just are two different things,” he said. “In the courts, equal is equal [numerically].
“You don’t know how they’re going to allocate your assets,” Schwartz added.
He listed other ramifications of not having a will:
- Different heirs, different goals: For example, if a child or grandchild had special needs, the inheritance may disqualify their special needs fund.
- Addiction issues: “In this time of pervasive opioid issues, an heir could blow a legacy,” Schwartz said. “Without a will, how do we make sure we take care of them?”
- Long distances: Can family members go to court? Or do they need to hire a lawyer and/or financial advisor from that region or state?
- Location of deceased’s records: The family needs to find the deceased’s proof of residency and understand what account statements exist, who owns the accounts and how they are held – individual name, business, spouse, retirement, real estate, partnership, etc.
- Different state laws: For example, not all states recognize domestic partnerships or common law spouses.
Child custody uncertainty is another offshoot of the dying intestate, said Mark Dutram, CFP and president of Bayview Private Wealth in Destin, Fla. For example, if the deceased had custody of minor children, it would be up to the court to choose a guardian to care for them and a custodian to oversee their property, he said.
The emotional ramifications that plague the family of the deceased when there is no will are not the least, Dutram said.
“Your loved ones will already be in a state of trauma – the last thing you want is a complicated process for them to administer your estate,” he said. “The family will have to determine … what [the deceased] would have liked.”
“And friends and acquaintances can come out of the woodwork to receive the deceased’s belongings, such as vehicles,” Dutram added.
What to do if a loved one dies intestate
- Secure the house: Restrict access if necessary, change locks, film everything and forward mail.
- Contact the funeral home: Ideally, there should be a family representative for this. Obtain death certificates, but don’t let them fall into the wrong hands. Death certificates can provide access to many documents and/or personal property.
- At home, look for legal documents: Search for real estate deeds, insurance policies (is there any property attached?), bank statements, retirement accounts, tax returns (to see income and wealth). Also look for the names of a financial adviser, accountant, lawyer or other professionals who may know the deceased. The more you know, the better.
- Call the county court and ask for the surrogate court: They will explain the process and the forms to fill out. They usually require an original death certificate.
Often an individual can handle the process alone, but if there are conflicts within the family, a large number of assets, or certain types of assets (such as a business or intellectual property), you should hire a lawyer specializing in trusts and estates.
— Sabine Franco, managing attorney at The Ambitious Legacy Firm in Hempstead, New York