You have undoubtedly heard from well-meaning friends and family members how important it is to have at least a basic estate plan in place. For most people, this means executing a Last Will and Testament. If you don’t know why it is so important, however, you probably won’t be inclined to get started on your plan. Although there are several reasons why having an estate plan in place is important, the simplest to explain is the desire to avoid dying intestate. Once again though, unless you understand what happens if you do die intestate, that reason will be unlikely to inspire you to execute a Will. With that in mind, it only makes sense to learn more about what happens if you die intestate.
Understanding the Terminology
To begin with, you need to understand the terminology. A “testate” estate refers to the estate of a “Testator” who left behind a valid Last Will and Testament upon death. An “intestate” estate refers to the estate of someone who did not execute a Will prior to death. Your “estate” refers to everything you own, or have an ownership interest in, at the time of your death, including tangible and intangible assets as well as real and personal property. The “Executor” is the person named in your Will to oversee the probate of your estate. If a decedent dies intestate, any adult can volunteer to oversee the probate process. If the court approves the individual, he/she is known as a “Personal Administrator” in most states. Finally, a “beneficiary” is someone named in a Will or trust to receive gifts or benefits from. the estate of a decedent. An “heir” is someone who stands to inherit from an estate under the states intestate succession laws in the event the decedent dies intestate.
The Probate Process
When you die, your estate will be required to go through the legal process known as “probate.” Probate is intended to serve numerous purposes, including:
- Authenticating a Last Will and Testament if one was left behind
- Identifying and locating all estate assets
- Identifying and locating heirs of the estate in the case of an intestate estate
- Notifying creditors and allow them the opportunity to file claims against the estate
- Paying any taxes owed by the decedent and/or estate
- Transferring the remaining assets to the intended beneficiaries and/or heirs of the estate
Gifting vs. Inheriting
When you create an execute a Will, the primary objective for most people is to make gifts to beneficiaries of your estate assets. In essence, your Last Will and Testament allow you to create a roadmap to be followed after your death. If you die intestate, however, the State of North Dakota effectively creates that roadmap using the state’s intestate succession laws. Because the State doesn’t like situations where the ownership of assets is unclear or in conflict, the State requires all property to be transferred to new owners when someone dies, hence the reason for the state’s intestate succession laws.
If You Die Intestate, Who Gets Your Assets?
Each state has its own set of intestate succession laws, meaning the fate or property left behind in an intestate estate will vary by state. Typically, however, intestate succession laws dictate that only a spouse and close relatives, such as children, siblings, and/or parents, will inherit estate assets. In the event the decedent is not survived by a spouse and/or close relatives, intestate succession laws look to more distant relatives, such as grandchildren, grandparents, aunts/uncles, and/or cousins, to distribute estate assets. Because the goal is to ensure that no property is left without a new legal owner, the law will continue to move farther out in your family tree to find heirs. Although it does not happen often, the intestate succession laws even address a situation wherein the decedent is not survived by any legal heirs. In that case, estate assets “escheat” to the State of North Dakota, meaning the assets become the property of the State to be used for the common good.
If the idea of letting the State of North Dakota or Minnesota (or any other state) decide what happens to your estate assets when you die doesn’t sit well with you, there is a very simple way to prevent it from happening – execute a Last Will and Testament!
If you have additional question or concerns regarding a the fate of your estate assets if you die intestate, contact the experienced North Dakota and Minnesota estate planning attorneys at German Law Group by calling 701-738-0060 to schedule an appointment.