The event of death can take a loved one by surprise. When a person dies without a Will, the laws of probate intervene. Probate is the legal process by which the rules of intestate secession guide the distribution of property assets to surviving relatives. In most states, the rules of intestate secession require that assets are distributed to the closest living family member surviving the deceased. Laws of intestacy dictate the rules of property transfer and other benefits that would customarily be designated to named beneficiaries by an estate during probate. Customary rules specify surviving spouses as priority for just enrichment from an estate, followed by children, parents, and siblings should no beneficiaries be named in a last will and testament prior to a decedent’s death.
Depending on the state, rules of intestacy guide the transfer of assets from “the Decedent’s estate when there is no will. For example in New York, “distributees” are surviving relatives with inheriting rights as provided for under, New York Consolidated Laws, Estates, Powers, and Trusts Law, which mandates “the spouse inherits the first $50,000 plus half of the balance,” followed by the children who inherit the remainder (EPTL § 4-1.1). According to New York estate law, parents retain 100 percent an estate if not children or spouse is surviving. Probate rules accord siblings full estate rights if no spouse, children, or parents is surviving.
The conditions of intestate succession differentiate the terms of the parent-child relationship depending on the state. Apportionment of estate assets and property applies where more than one surviving child. Adopted children generally have the same rights as natural born children. However, foster children and stepchildren are typically not considered direct surviving relative beneficiaries. Children born outside of wedlock are accorded equal rights to estate as children of married parents by law. Finally, grandchildren are the direct heirs of a grandparent’s estate if the parent who is the child of the decedent has died before the estate is effective.
The value of life insurance proceeds and other specified assets are not transferred directly to beneficiaries under rules of intestacy. Retirement funds such as 401(k), IRAs and securities managed by a transfer-on-death accounts are another instance where intestate succession does not apply without probate intervention. The same with joint tenancy accounts and any property transferred from a living trust to a beneficiary prior to the owner’s death. A probate court can escheat the value of property assets to state coffers should there be no surviving person meeting rules of intestacy. Other exceptions are half relatives, post humous relatives, and foreign nationals where probate transfer or estate assets is not automatically considered.
Probate courts tend to allow someone determined to be the “closest distributee” to file for estate transfer. If the relative is given the right to administer the estate, yet declines to petition, renunciation and waiver must be signed to transfer rights to the next surviving relative(s). Renunciation and waiver of distribute rights does not dissolve the intestate share of an estate’s assets, solely the authority to administer asset transfers. Planned giving specialists working with estate contributors to nonprofit charitable giving strategies, should have knowledge about rules of intestate succession affecting heirs in their state.
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In the United States, laws of intestacy dictate the rules of property transfer and other benefits that would customarily be designated to named beneficiaries by an estate during probate.
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