If a person dies without a will (“intestacy”) in New York State, what happens to their estate is determined by two things:
- The nature of their assets
- The composition of their family
Direct Transfer Assets
Some property passes automatically to specific heirs, regardless of whether or not a will is in place:
- Property that is jointly titled—such as real estate and joint bank accounts—passes to the joint tenant/joint owner.
- Property that has designated beneficiaries—such as life insurance policies and some retirement accounts—passes to the named recipient.
While automatic transfer is usually a reasonable and efficient way to pass on eligible assets, there are circumstances when this is less desirable, for example, when beneficiaries are minor, have disabilities or are incapable of managing affairs. When a person dies intestate, these circumstances are not considered and the assets pass automatically with no safeguards or restrictions.
A Family Affair
For most assets, New York’s intestacy law determine who will receive the decedent’s assets, in what order and in what proportion. This is almost entirely limited to blood relatives. New York State law generally favors a decedent’s surviving spouse and lineal descendants (such as children and grandchildren). If the decedent is unmarried and has no lineal descendants, their assets will be distributed to parents, siblings, nieces/nephews and grandparents, in the order of priority provided by the statute. For instance, if an intestate decedent is survived by a spouse and children, the surviving spouse will receive the first $50,000 of assets and the remaining estate must be distributed one-half to the spouse and the other half to the decedent’s surviving children. For tax-privileged assets, such as retirement plans and pensions, the order of inheritance provided by the plan or fund’s intestacy provisions or federal law will often control their disposition.
This means that without a will, a deceased New Yorker has no say in how their assets will be divided at death. If a decedent has no will and no living relatives as provided under the intestacy law, their assets will generally be considered abandoned property and pass to the State.
Such a lack of planning can be particularly disastrous for unmarried couples or for decedents who want to leave assets to charitable or unrelated beneficiaries because the law prevents such beneficiaries from inheriting from a decedent in the absence of a will. Without a will to expressly direct property to them, these intended beneficiaries will not be able to inherit a decedent’s assets.
An Administrative Hurdle
In cases of intestacy, a court-appointed administrator is deemed the estate’s personal representative, charged with collecting monies owed to the decedent/estate, paying or disputing any debts, liquidating assets and distributing proceeds. New York State’s administration statute will determine which family member or creditor is eligible and has priority to apply to become the administrator of a decedent’s estate in the absence of a will. The applicant will typically have to provide proof of their relationship to the decedent and their eligibility to the court to be appointed the administrator of an estate. Moreover, without a will to dictate otherwise, an individual applying to be the administrator of an intestate decedent’s estate may also have to post a bond to ensure that the creditors of the decedent’s estate will be paid. Therefore, dying without a will in New York will frequently cause the appointment of an administrator to take more time and cost more money, which comes out of the estate’s assets.
Why Risk It?
Put simply, if you die without a will, you lose all say over what happens to your property (aside from certain direct transfer assets with a legal co-owner or designated beneficiary). People may receive larger bequests than you intended, people or organizations you wanted to remember may get nothing at all, and, in some circumstances, the State of New York may be able to claim everything. Having a will expresses – and safeguards – your wishes. Most wills can be created quickly and at modest cost. Please contact Holm & O’Hara LLP, if you have any questions or concerns about creating your estate plan or administering an estate entrusted to your care. One of our experienced and conscientious attorneys will be glad to help you and your family.
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