DEFINITION of 'Intestate'

Intestate refers to dying without a legal will. When a person dies in intestacy, determining the distribution of the deceased's assets then becomes the responsibility of a probate court.

An intestate estate is also one in which the will presented to the court was deemed to be invalid.

BREAKING DOWN 'Intestate'

When an individual dies, his or her assets are divided among the beneficiaries listed in his or her will. In some cases, the testator or deceased does not leave a will which should contain instructions on how his or her assets should be distributed after death. When a person dies without a will, he is said to have died intestate. To have died "in intestacy" means a court-appointed administrator will compile any assets of the deceased, pay any liabilities, and distribute the remaining assets to those parties deemed as beneficiaries.

The probate process for an intestate estate includes distributing the decedent’s assets according to state laws. The probate courts begin the process by appointing an administrator to oversee the estate of the deceased. The administrator functions like an executor (legal representative named in a will), receiving all legal claims against the estate and paying off the outstanding debts, such as unpaid bills.

The administrator is tasked with locating the legal heirs of the deceased which would include surviving spouses, children, and parents. The order in which heirs inherit from a decedent's estate when he has no estate plan is called "intestate succession." The probate court will assess what assets need to be distributed among the legal heirs and how to distribute them. The probate laws in most states divide property among the surviving spouse and children of the deceased. For example, a resident of Arizona, New Mexico, California, Texas, Idaho, Nevada, and Washington who dies without a valid will, will have his estate divided according to community property laws in the state. Community property laws recognize both spouses as joint property owners. In effect, the distribution hierarchy starts with the surviving spouse who almost invariably receives at least half the decedent's estate. She may receive the entire estate if the decedent leaves no living children or grandchildren. If unmarried or widowed at time of death, assets will be divided among any surviving children, before any other relative. If no next of kin can be located, the assets in the estate will become the property of the state.

Close friends of the deceased will not normally be added to the list of beneficiaries under a state’s probate laws for intestate estates. However, If the deceased had a joint account with right of survivorship or owned property jointly with another, the joint asset will automatically be owned by the surviving party (or parties).

To ensure that your friends and loved ones receive the contents of your estate upon your passing on, it is extremely important to make a will, or have a will made on your behalf by an estate lawyer qualified to do so.

RELATED TERMS
  1. Intestacy

    Intestacy refers to the condition of an estate of a person who ...
  2. Deceased Account

    A deceased account is a bank account, such as a savings or checking ...
  3. Administrator

    An administrator is a court-appointed individual who handles ...
  4. Dower

    A dower was a common law that entitled a widow to a portion of ...
  5. Adjusted Gross Estate

    Adjusted gross estate is the net worth of a deceased person’s ...
  6. Succession

    Succession describes the inheritance of power or property from ...
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. Managing Wealth

    Skipping-Out on Probate Costs

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

    Why and How You Should Keep an Estate Out of Probate

    Including certain documents and designations in your estate planning can help your beneficiaries avoid the costs and headache of probate.
  4. Investing

    Joint Tenancy: Benefits and Pitfalls

    This arrangement allows beneficiaries to access your account without having to go to court. Learn about the benefits and pitfalls to joint tenants with rights of survivorship (JTWROS).
  5. Retirement

    3 Secrets You Didn't Know About Estate Planning

    Three estate planning secrets every advisor and saver needs to know.
  6. Managing Wealth

    Don't Count On An Inheritance

    If you're fortunate enough to receive an inheritance at all, it might not be nearly as large as you expect.
  7. Retirement

    Estate Planning: 7 Things Everyone Should Do

    Regardless of your age or whether you have a lot of money, there are seven things everyone should do to prepare their estate.
  8. 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.
RELATED FAQS
  1. When are beneficiaries of a will notified?

    Learn when the beneficiaries of a will must be notified, and understand how this requirement varies depending on whether ... Read Answer >>
Hot Definitions
  1. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  2. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  3. Current Assets

    Current assets is a balance sheet item that represents the value of all assets that can reasonably expected to be converted ...
  4. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
  5. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  6. Cost of Debt

    Cost of debt is the effective rate that a company pays on its current debt as part of its capital structure.
Trading Center