A common question estate planning attorneys get is, “What happens if I die without an estate plan?”
In a sense, everyone has a default estate plan through their state’s laws of intestacy. The laws of intestacy of the state where the deceased is domiciled are the state laws that control.
What are laws of intestacy?
The term, “laws of intestacy” refers to the state laws that govern who receives what is left in a deceased person’s estate after the debts are paid. These are default rules, and the deceased and their family have no say in how they are applied. They are applied by a probate judge, according to their reading of the law and the estate itself.
What about New Jersey?
In New Jersey, our laws of intestacy are at New Jersey Statute, Section 3B:5-1 Most people assume that, if you are married, your surviving spouse gets everything, or, if you are unmarried, everything goes to the surviving children. That is not always the case. This is why it is so important to estate plan because it puts you in the driver’s seat, not some random judge.
What happens if there is a surviving spouse or partner?
The intestate share, or the amount of the estate left after its debts are paid, will entirely go to the surviving spouse or domestic partner if the deceased’s parents have already died and the deceased had no descendants (children by birth or adoption) at death. Alternatively, if all of the deceased’s descendants are also descendants of the surviving spouse or domestic partner (the other parent), and the deceased’s parents have died, then that spouse or partner will receive the intestate share.
A living parent
If there is a living parent, then the calculation becomes complicated. First, 25% of the intestate will automatically go to the surviving spouse or partner. That 25% cannot be less than $50,000, but it also cannot be larger than $200,000. Then the remaining 75% is split, with 25% going to the surviving parent, and the remaining 75% to the surviving spouse or partner.
For example, on a $2,000,000 estate, after debts are paid, the living spouse would receive $200,000, plus $1,350,000, and the parent would receive the remaining $450,000. And, intestate law only gets more complicated, which is why crafting an estate plan is so important.