If you die without having made a will explicitly stating how you wish your assets to be distributed, the law states that you died intestate. In this situation, the status of your will is intestate and this could lead to complications. Each state has laws on how to deal with this sort of situation.
Appointment of Administrator
Typically, a probate court is responsible for oversight of the process whereby a deceased person’s assets are distributed. This court ensures that the deceased’s debts, taxes and other such liabilities are satisfactorily settled. In the case of those who died leaving behind a valid will, the probate court typically appoints the person that the will names as an executor to handle this process. This person is then responsible to the court for resolving the deceased’s financial affairs according to the wishes indicated in the will. However, in the case of an intestate death, the probate court will appoint an administrator to take over the task of distributing the deceased’s estate and resolving her financial affairs.
Typically, the deceased’s spouse takes over the role of administrator. In case the spouse declines or is deceased, one of the intestate person’s children could take over as administrator. If no immediate relative is available, the court could appoint any other suitable person to handle this process. (See also: Why You Should Draft A Will.)
Settle Financial Affairs
The administrator of an intestate estate has to follow certain procedures. This includes taking stock of the deceased’s assets and determining their market value. In the case of items without a readily determinable market value, such as a painting, the administrator should get a professional appraisal to determine their market value.
Those to whom the deceased owed money, such as creditors and household staff whose salaries are due, should put in their claims for the money. The estate is also responsible for any taxes the deceased owed. After settling such liabilities, in a specified order of precedence, the administrator should then distribute the deceased person’s residual estate. There is also a legal order of precedence to determine how the administrator is to distribute these assets.
Who Gets the Assets?
In case there is a surviving spouse and no children, the spouse typically gets the deceased’s residual assets. If there is no surviving spouse and the deceased had children, the assets are typically divided equally among the children. In case any of these children is also dead but has children of his own, then these grandchildren of the deceased can claim their father’s share of the estate and divide it among themselves. What if there is a surviving spouse as well as children? There are various ways of resolving this situation depending on whether the spouse is also the biological parent of the surviving children or not. In case the deceased did not leave behind a spouse, children or grandchildren, the assets go to his parents if they are still alive. If the deceased’s parents are not alive, the assets go to her siblings, or their descendants, in an equal division. In case a deceased left behind no identifiable family members, the assets typically go to the state.
Asset Distribution May Not Reflect the Deceased’s Wishes
Under this legal scheme of distribution, there is no place for the expression of the deceased’s specific wishes. For instance, if you had wanted to leave behind a sizable bequest to a long-time friend, or to a faithful housekeeper or caretaker had been a part of your household for many years, the legal procedure for an intestate will cannot read your mind about such preferences. And if you had become estranged and wanted to specifically cut a close relative out of your will, that wish too will not be honored. Moreover, your favorite charities will not get any amounts you wished to gift to them. If you make a will, you can spell out your wishes so that your assets go where you intend them to.
The Bottom Line
An intestate person is one who dies without making a will that states how her assets are to be distributed. There are legal processes to address this sort of intestate will situation. Generally the state court appoints an administrator to settle the deceased’s financial affairs and distribute any residual assets to his relatives in a certain order of precedence. Considering that this sort of legal procedure may likely not reflect the deceased’s own preferences in this matter, it is much better to make a will that explicitly states your preferences than to die intestate. Estate planning may also help your estate avoid the expense of the court and probate process. (See also: Ethical Wills Share Final Thoughts With Heirs.)