You have undoubtedly heard how important it is to have an estate plan in place. At a bare minimum, you know you need to execute a Last Will and Testament; however, do you know why it is so important? Like many people, you may not be motivated to get an estate plan in place unless you know the consequences of not having one in place. If you died tomorrow without at least a basic Will in place your estate would be considered an “intestate” estate. Conversely, if you die with a Last Will and Testament in place, your estate is considered a “testate” estate. What happens if you leave behind an intestate estate?
Testate vs. Intestate Estates
Although no one wants to think about the possibility of their own untimely death, for a moment let’s imagine that a tragic accident causes your death tomorrow. In the absence of a valid Last Will and Testament the New York State laws of intestate succession will dictate how your property is distributed after your death. The reason for this is that the government does not want assets to lack proper ownership or to become the subject of protracted litigation trying to decide who owns them. Therefore, if you fail to decide ahead of time who will receive your assets upon death the State of New York will decide for you using the existing intestate succession laws.
Who Will Oversee the Probate Process?
Almost all estates are required to go through the legal process known as “probate.” Someone must be appointed to oversee the probate of your estate. If you had executed a Will, you would have been able to decide yourself who will be the Executor of your estate; however, since you died intestate, almost anyone may petition to be the “Personal Representative” of the estate. If no one volunteers the court will have to appoint someone who is not involved in your estate at all. The Executor/PR has a long list of important duties throughout the probate process, including:
- Starting the probate process
- Identifying, locating and valuing estate assets
- Identifying and locating legal heirs of the estate
- Notifying creditors
- Reviewing creditor claims and paying approved claims
- Defending your estate during any litigation
- Preparing and paying taxes
- Transferring assets to the new owners
Who Will Get Your Estate Assets in an Intestate Estate?
When a decedent dies without leaving behind a Will (or other estate planning documents) the New York intestate succession laws govern the distribution of assets owned by the decedent at the time of death. Under the New York intestate succession laws only close family members will inherit from your estate. Typically, this includes a spouse, children, parents and/or siblings unless none of them survive you. In that case the law will look to more distant blood relatives. Close friends and causes dear to your heart will receive nothing from your estate. Your favorite niece to whom you promised your doll collection will likely receive nothing. Worst of all, sentimental assets or family heirlooms could be sold in order to liquefy assets to satisfy the intestate succession distribution requirements. Your family home, for example, might have to be sold because only your three children survived you and the law requires your assets to be split equally among them.
In essence, dying intestate means you agree to let the State of New York decide who will administer your estate, who will inherit from your estate, and which assets those legal heirs will receive from your estate. If that doesn’t sit well with you, as is the case with most people, the simple solution is to sit down with an experienced New York State estate planning attorney to discuss the creation of an estate plan. With an estate plan in place you can rest easy knowing that your wishes will be followed with regard to the future of your state assets.
For additional information, please join us for a free seminar. If you have additional questions or concerns regarding Medicaid planning, contact the experienced New York estate planning attorneys at The Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.