Intestacy: When You Die
Without a Will -
Why To Avoid
It
Many
persons who have accumulated
wealth during their lifetime
die without a valid will.
When this happens, the
decedent's property passes
by intestate succession to
the decedent's heirs at law
according to law. In other
words, if you don't have a
will, the state will make
one for you. All fifty
states have laws of this
sort. The North Carolina
Intestate Succession Act is
codified at Chapter 29 of
the General Statutes.
The
purpose of intestate
succession statutes is to
distribute the decedent's
wealth in a manner that
closely represents how the
average person would have
designed his or her estate
plan had that person had a
will. However, this default
can differ dramatically from
what the person really would
have wanted. Even where is
it is known what the person
intended, no exceptions are
made where no valid will
exists. Nor are there any
exceptions made based on
need or special
circumstances. As will
be explained below, in North
Carolina an intestacy can
create unintended (and
sometimes tragic)
consequences.
The North Carolina Intestate
Succession Act
Under
the Act, close relatives
take property instead of
distant relatives. The
classes of relatives whose
members receive property
under the Act include the
decedent's surviving spouse,
descendents (children,
grandchildren, etc.),
parents, descendents of
decedent's parents
(siblings, nieces and
nephews), grandparents, and
descendents of grandparents
(aunts and uncles and
cousins). Adopted
descendents are treated the
same as biological
descendents. If none of the
above-named classes of
relatives include any
persons qualified to take
the estate, the property
"escheats" (goes by default)
to the state.
The
North Carolina Act is
considerably different from
the Uniform Probate Code and
many other states’ acts.
The way in which a surviving
spouse is treated upon
intestacy should alone be
enough to entice most
individuals to have an
enforceable will prepared to
avoid the following
situations.
-
Share Of Surviving
Spouse
Under the Act, a surviving
spouse receives the entire
estate ONLY if the deceased
spouse is not survived by a
child or a parent. If the
deceased is survived by one
or more children or
grandchildren (who could be
step-children or
step-grandchildren of the
surviving spouse) and/or one
or more parents, the
surviving spouse will take
only a share. Children and
grandchildren are referred
to below as “descendants”.
The rules are as follows:
-
If there is one
descendant
surviving, the
surviving spouse is
entitled to the
first $30,000 of
personal property
and one-half of the
rest of the real and
personal property in
the probate estate.
-
If there are two or
more descendants,
the surviving spouse
takes the first
$30,000 of personal
property and only
one-third of the
rest of the estate.
-
If there are
no surviving descendants,
but the deceased is survived
by one or more parents, then
the surviving spouse is
entitled to the first
$50,000 of personal property
plus one-half of the balance
of the estate.
It
takes no imagination to see
the havoc that can be
created by an intestacy. An
individual leaving a young
family will subject one-half
to two-thirds of his or her
estate to continuing clerk
of court supervision until
minor children are 18
because a guardianship will
likely be necessary. If one
member of a childless couple
married for a long time dies
intestate with a surviving
parent, that parent will
take up to one-half of the
estate. The situation can
be even more critical in
second marriage/second
family situations.
Under the Act, if no spouse
survives but descendents of
the decedent survive, the
descendents take the entire
net estate by
"representation." (See
discussion of
"Representation," below.)
Under the Act, if a decedent
is not survived by a spouse
or descendents, the entire
net estate passes to the
decedent's parents equally
or, if only one survives, to
the survivor.
Under the Act, if a decedent
is not survived by a spouse,
descendents, or parents, the
entire net estate passes to
the decedent's siblings or
the descendants of any
deceased siblings (nieces
and nephews).
If there are no siblings or
descendants of siblings,
then the estate is divided
among the paternal and
maternal relations
(grandparents, aunts,
uncles, cousins) of the
decedent.
The "Net Estate" is the
amount left for distribution
to heirs after all debts,
family allowances, taxes,
and administrative expenses
have been paid. "Family
allowances" include a
$10,000 year’s allowance to
surviving spouses and $2,000
with respect to each
surviving minor child.
