You may have heard the term “laughing heir” used by an estate planning lawyer, the media, or by courts. The legal definition of a “laughing heir” is a distant relative with inheritance rights without a close degree of kinship to the decedent. At common law, laughing heirs described relatives who didn’t bereave a decedent’s death like closer relatives. Many states enacted laughing heir statutes that limit the rights that distant relatives have when a decedent dies intestate or without a will. At common law, if a decedent died intestate, the next living relative was entitled to his inheritance, regardless of the degree of kinship. Thus, at common law, the decedent’s state would find the closest surviving relative of the decedent to pass his inheritance. If the decedent died without a surviving spouse, children or close descendants, laughing heirs could inherit his estate.
To prevent far removed laughing heirs from inheriting a decedent’s assets, some jurisdictions passed a laughing heir statute that limited a laughing heir’s rights to a certain level of kinship. Thus, in these jurisdictions, remote laughing heirs have no inheritance rights. Instead, a decedent’s estate passes or “escheats” to his state. In these cases, states limit the inheritance rights of remote laughing heirs in favor of their escheat laws. In states without laughing heir statutes limiting the inheritance rights of remote relatives, laughing heirs have priority over the state to an intestate decedent’s estate.