If you were to die without any estate planning documents at all, the condition of intestacy would exist. In this post, we will explain the way that intestate estates are handled. When you learn all the facts, you will see why you should take action to prevent intestacy.
Probate
The probate court will provide supervision during intestate estate administration. It should be noted that a will would also go through probate, but this is a subject we will cover in another post.
Someone has to handle the estate administration tasks, so the court will appoint a personal representative or executor to act as the administrator. This will typically be the closest living relative that is fully capable and willing to assume the role.
During probate, the assets that comprise the estate will be identified and inventoried by the executor, and they will be prepared for distribution. The representative will pay final debts, and ultimately, the assets will be distributed and the estate will be closed by the court.
Intestate Succession
There is an intestate succession statute that is used by the court to determine how the assets will be distributed. Each state has its own rules, but the information we will provide here is for the state of Vermont.
We have a 120 hour rule in our state. If you are in line for an inheritance under the succession laws, you would have to live for at least 120 hours longer than the person that was leaving the intestate estate.
If there are surviving children but no spouse, the children would inherit the entire intestate estate. This would include adopted children and unborn children that were conceived before the parentâs death. Conversely, if there is a spouse but no descendants, the spouse would inherit everything.
The surviving spouse would be the sole inheritor if the only descendants are from the decedent and the survivor. When there is a surviving spouse that is not the parent of descendants of the deceased spouse, the assets would be evenly divided.
Parents would be the inheritors if there is no spouse and no descendants, and the siblings would be at the top of the list if there is no surviving spouse, parent, or descendant.
This would cover the vast majority of situations that can arise, but the laws extend beyond these relationships if necessary. In rare cases, there will be no living relatives at all. Under these circumstance, the state would ultimately assume ownership of the assets under escheat provisions.
Probate-Free Transfers
The intestate succession laws apply to asset transfers that pass through probate, but there are some types of transfers that are not subject to this process.
When you establish an account at a bank or brokerage, you can name a beneficiary. This is called a payable on death or transfer on death account. After your passing, the beneficiary would present the death certificate and the institution would release the funds without any court involvement.
The same thing is true for life insurance proceeds and property that is held in joint tenancy. The term âjoint tenancyâ describes the condition of joint ownership of real property.
Probate is time-consuming and there are costs involved that can consume a noticeable portion of an estate. It is a public proceeding, so there is a loss of privacy, and this is another negative.
People sometimes take steps to proactively avoid probate. The most widely utilized solution is the revocable living trust. Assets in the trust would be distributed to the beneficiaries, and probate would not be a factor.
Access Our Free Worksheet
We have developed an estate planning worksheet that you can use to gain a more thorough understanding of the process. It is free, and you can visit our worksheet page to get your copy.
Schedule a Consultation!
Our attorneys are ready to spring into action if you would like to take the right steps to avoid intestacy. The optimal approach will depend upon the circumstances, and we will work with you to devise a plan that is ideal for you and your family.
You can send us a message through our contact page to request a consultation appointment, and we can be reached by phone at 802-879-7133.
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