Estate planning is a must for all responsible adults, but when you evaluate survey results, you find that most people are not prepared for something that is definitely going to happen. Unfortunately, some people pass away without a will or a trust, so their wishes are not known.
If you were to pass away without a will or a trust, the condition of intestacy would be the result. The way the property would be distributed would depend on a number of factors.
Property that was in your direct and sole personal possession at the time of your passing would become probate property at first. The probate court would sort things out, and a personal representative would be appointed to administer the estate.
Creditors could come forward during the probate process seeking satisfaction. Once final debts were paid, the court would use the intestate succession laws of the state of Pennsylvania to transfer assets to your closest relative or relatives.
There is a particular pecking order that is used when an intestacy case is being handled. In Pennsylvania, if there were children surviving but no surviving spouse, the children would inherit all of the probate property. If there was a surviving spouse but no children or parents, the surviving spouse would inherit everything.
In many cases there is a surviving spouse and children from the decedent and that surviving spouse. Under these circumstances, the surviving spouse would inherit the first $30,000 and half of the remainder, and the children would inherit the rest.
These are a few examples, but the intestate succession laws address every different scenario.
Transfers Outside of Probate
If you died intestate, there are certain types of asset transfers that would not be subject to the probate process and the intestate succession laws.
Insurance policy proceeds would be paid to the beneficiary directly, and the probate court would not be involved.
When you open a bank account or a brokerage account, you are usually given the opportunity to add a beneficiary. This is called a payable on death or transfer on death account.
When this type of account has been established, the beneficiary would assume ownership of the assets after the death of the primary account holder. Intestate succession laws would not come into play.
There is also the matter of joint tenancy. If you own property, you could add a co-owner that is called the joint tenant. After your passing, the joint tenant would assume ownership of the entirety of the property outside of the probate process.
Take Action
There is no reason to die without a will or trust. If you are currently unprepared, send us a message through this page to set up a free consultation: Southampton PA Estate Planning Attorneys.
- What Is a Qualified Personal Residence Trust? - July 24, 2015
- Will Medicaid Take My Home? - July 22, 2015
- 2015 Estate Tax Exclusion Adjustment Released By IRS - July 18, 2015
