What happens if I die without an estate plan or will?
Most of us don’t think too often about what would happen to our assets when we’re gone, but it is important to remember that you are leaving behind not only assets and possessions. You’re also leaving behind loved ones to carry on your legacy and put the remaining pieces of your finances together. An estate plan makes those responsibilities that much easier for them. By creating a valid and executable document, you’ll be giving peace of mind to those you leave behind. They will have a clear record of your wishes and intentions. The last thing anyone would want is for their grieving loved ones to worry about if they are doing everything according to what you would have wanted.
If you pass without a will in place, your estate will default to the distribution process known as intestate succession. Each state will distribute the assets of the deceased with their own unique guidelines, so make sure you are familiar with your own state’s. This article will predominantly cover what happens in New Jersey.
Of course, avoiding intestate succession is the ideal situation to strive for. By working with Van Dyck Law and our experienced estate planning attorneys in New Jersey, you can put together an effective plan for transferring your assets and administering your estate — one that you can feel confident in. It is never advised to wait on this task, as a concrete plan now means security for your beneficiaries later.
Who Is The Administrator To The Estate When There Is No Will?
In New Jersey, the executor of your estate is referred to as the estate’s administrator. As to who becomes administrator when the decedent hasn’t designated one, that question has a lot of layers. The answer changes based on who has survived you and their relationship to you.
If you are survived by a spouse or a recognized domestic partner, they will take control of the distribution of your assets in New Jersey in most cases. But if you were not married or involved with a long-time partner during the time of your death, the next in line would be any surviving children you may have. If you have multiple children, the oldest does not necessarily take control. Let’s say you have three children, all three are eligible, they must decide amongst themselves who will be in control. In effect, two of them must renounce their duty as administrators and come to a consensus about who will take control. This can be a tense situation that leads to further complications with distribution, so it is best to avoid the issue altogether.
What if you left no children behind? The next in line would be parents, or any grandchildren if you have any and both of your parents have passed on. After that, any of your living brothers or sisters are entitled to claim administrator of the estate. The issue of renunciation comes up again with many of these groups.
Finally, if no other surviving candidate exists and no designation was made by the decedent prior to their death, someone who has a creditor claim to your estate may assume the role.
If you can avoid putting your loved ones in a tense or unclear situation, it will likely prevent many arguments about your assets in the future. You can also begin preparing your chosen administrator in advance to ensure your wishes are well understood and that they can be prepared to handle any administration costs or other duties.
Who Gets My Assets If I Do Not Create a Will?
In New Jersey, intestate succession follows a specific procedure during the course of probate. Foremost, all debts and estate administration costs must be settled before any assets are distributed. That would end up being the responsibility of the administrator of your estate. After all outstanding debts are paid off, the executor (administrator) can have your assets distributed according to the laws of intestate succession.
The law dictates that the following will inherit the entirety of your estate, either as an individual or split among the group:
- If you have a spouse that survives you, and children from the same union, then your surviving spouse will take over all assets of the estate.
- If you leave behind a spouse and children from another relationship, then the spouse is entitled to the first 25% of the estate (but not less than $50,000 or more than $200,000). After that, they are also entitled to 50% of what is left of the estate, and the surviving children will equally split the other 50%.
- If you are survived by grandchildren but no children, the grandchildren will receive whatever their parents were entitled to.
- If you leave behind a spouse and parents, but no children, your parents are entitled to 25% of the remaining estate, after your spouse gets the first 25% (and whatever is left after parents receive their share).
Note that many financial instruments and assets, such as health insurance policies, will automatically transfer upon death outside of the estate proper. Any jointly-owned property will be transferred to the surviving party, for example, any real estate or other property with a beneficiary designation will also automatically be transferred over. Further, all beneficiaries of retirement plans, life insurance policies, or other arrangements will automatically transfer upon death.
What Is The 120-Hour Rule?
The 120-Hour Rule is part of the New Jersey intestacy system. It states that an heir must survive you by at least 120 hours to be eligible to inherit. This would matter in an instance where say you pass on and leave a child and grandchild. Your child then passes a week after you do, so they are still eligible to inherit their share as a beneficiary, and it can be transferred to the grandchild. This system is a part of an even broader system called the parentelic system. It basically acts according to the distribution lineup that we summarized in the previous section.
There are three branches of this system.
- The first branch recognizes the heirs as the decedent’s children, grandchildren, and great-grandchildren.
- The second branch recognizes parents, siblings, nieces, and nephews, extending down to great-nieces and nephews.
- The third and final branch accounts for the decedent’s grandparents and their descendants such as aunts, uncles, and first cousins.
Find An Estate Planning Attorney in New Jersey Today to Build a Comprehensive Plan for the Future
In sum, if you decide to ignore estate planning altogether and let the state decide the fate of your assets, your family will be left with significantly more work to do following your passing. Some simple planning now can avoid later complications, arguments over earthly possessions, and distribution delays. While it seems like a simple thing to ignore, thinking it will just be easier to ‘go with the flow,’ there may be some big consequences for some people you deeply care about later.
By contacting an estate planning attorney, you are proactively taking the first step into protecting the future of your assets. At Van Dyck Law Group, we have decades of experience helping people like you secure the future of their estates. We’d love to help you too!
We offer a no-obligation consultation with an estate planning attorney. You can call (609) 293-2562 to schedule your appointment, or reach out and contact us online!