DEFINITION of 'Heir'

HeirA person who inherits some or all of the estate of another person who has died. An heir receives property according to the laws of the state in which the property is probated when a person dies intestate (without a valid will). The rules of descent and distribution determine to whom property transfers when a person dies without a will. The heir(s) who inherit(s) the property are typically children, descendants or other close relatives of the decedent.

BREAKING DOWN 'Heir'

In the event there is more than one heir with the same relation to the deceased (such as two children), they will share equally in the estate. For example, if the father of two children dies intestate and there are no other living relatives, each of the two children (who become heirs to the estate) will receive property equal to half of the estate. The part of a deceased person's estate that is given to an heir is known as an inheritance.

An inheritance can involve cash, stocks, bonds, real estate and other personal property such as automobiles, furniture and jewelry.

While heir refers to a person who receives the property of another person who has died intestate, the term heir is commonly used to describe beneficiaries as well - those who are entitled to property left by will, trust, insurance policy or some other arrangement. In fact, however, not all heirs are beneficiaries, such as the case with an estranged adult child who is intentionally left out of a will. Likewise, not all beneficiaries are heirs. For example, a person can designate a friend or companion to receive property. In this case, the friend is not an heir (he or she would not be the recipient of property if left intestate because he or she is not a child or direct relative); however, the friend is a beneficiary as designated through the deceased person's will or other arrangement.

A female heir is often referred to as an heiress, particularly if the inheritance involves substantial wealth.

RELATED TERMS
  1. Estate Tax

    An estate tax is a tax on an inherited piece of an estate if ...
  2. Personal Property

    Personal property is a type of property which can include any ...
  3. Inheritance Tax

    Inheritance tax is a tax imposed on those who inherit the estate ...
  4. Probate

    A probate is the legal process in which a will is reviewed to ...
  5. Legatee

    A recipient of all or part of a deceased person's estate. A legatee ...
  6. Next Of Kin

    Next of kin is a person's closest living blood relative and may ...
Related Articles
  1. Managing Wealth

    Want Your Will to Prevail? Don't Die Intestate

    If you die without making a last will and testament, you are said to have died intestate. What happens to your assets in this case?
  2. Retirement

    4 Reasons Estate Planning Is So Important

    Estate planning isn't fun, but without it, the consequences can be devastating for your heirs – or at least, not what you intended.
  3. Financial Advisor

    How "Death Tax" Waivers Work

    Although the specific rules vary by state, an estate or inheritance waiver relinquishes an heir from the right to receive assets distributed from a decedent.
  4. Managing Wealth

    Skipping-Out on Probate Costs

    Don't let bad estate planning lead to unnecessary costs and stress for your inheritors.
  5. Retirement

    Why It's So Important to Update Your Estate Plan

    As rules and exemptions tied to the estate tax change, so should your estate plan. Here's why updating it is so important.
  6. Financial Advisor

    Estate Planning Tips for Financial Advisors

    Estate planning is not a set-it-and-forget-it proposition. Here are some tips for you and your clients.
  7. Financial Advisor

    Top Estate Planning Tips for 401(k)s and IRAs

    Here's how to avoid estate planning pitfalls when it comes to leaving IRA and 401(k) assets to heirs.
  8. Managing Wealth

    How to Maximize Inherited Retirement Accounts

    Leaving a retirement account to heirs takes planning for the giver and the receiver.
  9. Managing Wealth

    Your Estate: The Best Assets to Leave to Family

    When it comes to estate planning, there are three main factors to consider when distributing assets: liquidity, sentiment and tax planning.
RELATED FAQS
  1. Are estate distributions taxable?

    Discover how estates are taxed, why estate distributions are generally tax-free, and circumstances that may require an heir ... Read Answer >>
Hot Definitions
  1. Return On Equity - ROE

    The profitability returned in direct relation to shareholders' investments is called the return on equity.
  2. Working Capital

    Working capital, also known as net working capital is a measure of a company's liquidity and operational efficiency.
  3. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  4. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  5. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  6. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
Trading Center