What is intestacy?
We hear the terms “testate” and “intestate”, but what do they mean? Why do we need to care about this? Buckle up, this is a long one.
When a person dies testate, that means they died with a will in place. So when a person dies INtestate that means they died with NO will in place.
So what does that MEAN?
The most straightforward explanation is that when one dies testate, they made a plan to direct how their estate will be divided and distributed. When one dies intestate, the person who died made no plan, and for any assets that must go through probate, the state’s default plan will apply.
Every state has an intestacy statute, sometimes called a statute of descent and distribution. Ohio’s can be found here. Governments don’t love it when someone dies without a will. Laws evolved over time to address this problem. Lawmakers in each state settled on what they thought the default option should be. In other words, these statutes are a one-size-fits-all plan to deal with the property of people who die intestate.
How does this work in real life?
Think of your estate as a bowl full of water. When you pass, that water must be poured into other cups until the bowl is empty. But not all cups are the same size, and they must be filled in a particular order.
In Ohio the person who handles a deceased person’s estate with a will is called an executor. If the person died intestate Ohio calls them administrators. Other states have other names for them, but long story short they are the ones who have to pour the water out of the bowl into the other cups. And they do it in the order they are directed to, either by a will or by the state’s intestacy statute.
Let’s start simply. If there is no will, and only a surviving spouse (meaning the couple had no children) the first “cup” to be poured into is the surviving spouse. The surviving spouse gets everything.
If there is no surviving spouse, but there are surviving children, the next cups are the children, who get equal shares. So if mom died a year ago and now dad dies, dad’s estate is divided equally between the children. The statute references “per stirpes”. This has legal meaning and will be explained more fully in a follow-up post that I will link. (It will also address Ohio’s anti-lapse statute, which is closely related to these topics.) For now, it is enough to know that the law addresses what to do if a child dies before their parent.
That doesn’t sound so bad…
Well let’s make it more complicated then. We’ve only talked about what happens if there’s only a surviving spouse OR only surviving children. What happens when both survive?
If all the deceased person’s children are also the children of the surviving spouse, then the surviving spouse still gets everything.
Ok, that’s well and fine but what if this is a blended family where not all of the children are the product of the deceased person and their surviving spouse?
This is where it gets tricky because the law makes different provisions where there is only one child versus multiple children and some or all of them are not the biological or adopted child/children of the surviving spouse. Let’s avoid getting too in the weeds. Just know that, depending on the status of the child/children, the surviving spouse will take a dollar amount off the top of the estate - either $20,000 or $60,000 - and then a certain portion of the remaining estate - either half or one-third.
Obviously, this may be problematic for modest estates because it could result in the surviving spouse getting everything and the child or children getting nothing.
Yikes, what next?
You’ve probably guessed this isn’t the end. If there is no spouse and no children and no surviving descendants of the children, i.e. grandchildren, then the estate goes to the deceased person’s parents equally if both survive, or all to the surviving parent.
If there is no spouse, no children, no grandchildren, and no parents living of the decedent, then the estate goes to the decedent’s siblings. If any sibling dies first, then that sibling’s share goes to that sibling’s children, so nieces and nephews.
And goodness gracious there’s still more levels of cups!
So if there’s no spouse, no children, no grandchildren, no parents, and no siblings and no nieces or nephews, the estate is split among any surviving grandparents or anyone who survives the grandparents – so think aunts and uncles and cousins.
The law then says if we’ve exhausted all these relatives, any next of kin is next in line. There is likely interpretation of what is meant by “next of kin” in cases the probate court has heard in the past, but for our purposes here, it is enough to say, blood relatives get priority.
And THEN stepchildren may inherit.
If there is absolutely no relative crawling out of the woodwork, the estate escheats to the state. Meaning, the State of Ohio takes everything. As you can see, the statute is written to put absolutely every conceivable cup before the state’s in this process!
One last tricky thing…
Intestacy laws aren’t limited only to those situations where there is no will at all. The intestacy statute can be applied in other situations.
For example, if one dies with a will, but the will is invalid and there is no other valid will, the intestacy statute will be applied.
And, even when there is a valid will, there may be pieces of the estate that are not addressed by the will. Think, someone made a will 15 years ago, subsequently acquired property, but never updated their will. If there is no provision in the will that captures the new property, or some other mechanism in place to transfer that property outside of probate, the intestacy statute will be applied to it.
The takeaway
If you don’t like the state’s default plan, make a will. I’m betting the majority of people who read this far understand their priority-order of inheritance would be different from the state’s one-size-fits-all plan. If you already have a will, keep it updated as circumstances change so that ALL of your estate is divided how you want.