Navigating Wills and Trusts is vital at any age.
Why is it important to have a will?
Preliminarily, when an individual passes, it is not uncommon for the bereaved family to seek the advice of an attorney. Typically, the first question an attorney would ask is if the deceased had any Will or Trust.
While the answer might be as simple as a “yes” or “no”, the ramifications can be great. Let’s begin by reviewing what happens if the deceased passes without a Will or Trust.
First, before we begin any analysis concerning whether the deceased party has a will, it is important to note that any assets or property which are being held jointly are typically given in full to the surviving party. The most common examples include joint bank accounts with rights of survivorship and property held as joint tenants with rights of survivorship or as tenants by the entirety.
Once those assets have been distributed, the remaining estate would be referred to as the residuary.
Intestate Shares and Dividing the Residuary
Pursuant to EPTL 4-1.1, the division of an estate’s residuary is determined by the living relatives and their relationship to the deceased. The order and amount of distribution is:
If the deceased has: | Then: |
a spouse and children | The spouse inherits the first $50,000 plus half of any remaining residuary. The children then inherit the remining half |
a spouse and no children | The spouse inherits everything |
children, but no spouse | The children inherit everything in equal shares |
parents but no spouse or children | The parents inherit everything |
siblings, but no spouse, children, or parents | The siblings inherit everything |
That is not to say everyone in the list is entitled to an intestate share. In fact, it is quite the opposite. You start at the top of the list, once you find the heading that matches the deceased’s remaining family, you stop and only that tier inherits as described.
For example, let’s assume that the deceased has a residuary estate worth $100,000 and a spouse, two children, three siblings, and both parents.
- Since the deceased has a spouse and children, we would stop at the first tier in the chart above and see that the spouse would inherit $50,000 plus half of the remaining residuary. Meaning that the spouse would receive $75,000 and the three children would split the remaining $25,000 equally.
- The parents and siblings would receive nothing.
Another example would be that the deceased has a residuary estate worth $100,000, no spouse, no children, one parent, and four siblings.
- Since the deceased has no spouse and no children, we would stop on the fourth tier and the parents would inherit the entire $100,000.
- The siblings would receive nothing.
Based upon the nature of EPTL 4.1-1, it is easy to see how your estate may not be distributed in a manner consistent with your wishes.
On top of that, It is important to note that there are many caveats to the above rules. And next time, we will dive into some of those complexities, which will include: adopted children, grandchildren, divorced spouses, and step-children.
Next Time: More on Wills and Trusts
In this series of blog posts, we'll cover some caveats to the intestate share, the benefits of having a will vs. intestate, reasons for a trust, and more. Check the blog regularly for updates, and see you back here soon!
