Dying without a will is more common than you may think, but it can be problematic for your loved ones as it often causes delays in the distribution of your assets. Most notably, the process can delay the disbursement of financial accounts and physical assets, including real estate. Currently, there are state laws in place to streamline this process and mitigate the potential for any discrepancies amongst family members.
These laws are called the rules of instancy, and they are used to settle your estate if you die without a will. If your will is invalid, your family may also have to rely on intestacy rules. Below, we’ve summarized what happens when you die without a will in Massachusetts, and consider other situations and instances in which the probate process may differ.
So, what happens if you die without a will?
How an estate is settled when there is no will is dependent on whether you have children, parents, or other close relatives at the time of death. We’ve summarized these scenarios below.
What happens to your estate if you die with a spouse but no children?
If you die without children but do have a spouse, then your spouse will be the first to inherit the property. This is one of the most straightforward outcomes as no other third parties are involved; however, your spouse may have to probate the estate. This element of the process depends on the presence or existence of a joint ownership agreement.
What about if you have children and a spouse?
If you and your spouse have children, then the spouse will still inherit the property. However, the spouse must have no descendants from anyone other than that spouse.
If your spouse has descendants from another relationship, then your spouse will inherit the first $100,000 and ½ of the balance. In addition, their descendants will inherit ½ of your estate.
If you have a spouse but descendants from another relationship, your spouse inherits the first $100,000 of your property plus ½ balance. Your descendants will get ½ of your estate.
What happens to your estate if you have a spouse and parents but no descendants?
In this case, your spouse will inherit the first $200,000 of the property plus ⅔ of the balance, and your parents will inherit everything else.
If you have no parents, spouse, or children but have siblings, your siblings will likely inherit everything.
What if I have siblings but no spouse, children, or parents?
Your children will likely inherit everything, though this depends on whether they are biological or from another marriage.
What if I have no family?
If you die without a will and you have no family or named beneficiary, then your estate will go into “escheat.”
In this scenario, the state claims ownership. Escheat is considered to be rare, as intestacy laws ensure that anyone remotely related to you will get your property.
For instance, if you die without children, parents, siblings, or spouse, but you have great-grandchildren, they will inherit the property. The same goes with any distant cousins.
Probate and intestacy cases go before the court
While the scenarios outlined above provide information around what will likely happen with your intestacy case, it is ultimately up to the court’s discretion to allocate assets equitably. While some may be fine with this, others may not be, and that is why it is ideal to plan ahead for your final day, and create a will and testament that works for you.
Intestacy laws ensure that there are outcomes for every single scenario to ensure that an estate is never in ownership limbo, including:
- Adopted children: Intestacy laws views adopted children as your biological children, meaning that they will inherit everything if they are entitled to it.
- Foster children or stepchildren: Your foster or stepchildren do not have a claim to your estate under Massachusetts intestacy laws.
- Children placed for adoption: If you put a child up for adoption and another family legally adopted them, they will not inherit anything. If, however, your spouse has adopted children, this won’t affect their inheritance.
- Posthumous children: If you were expecting a child, but they weren’t born before you died, they will receive a share if they survive longer than 120 hours.
- Children born outside of marriage: Your children from another relationship will only inherit if you have declared your maternity or paternity to your partner at the time of death.
When will I need to deal with property transfer?
There is a legal process of transferring the contents of an estate property after someone has died. Typically, you will need to transfer the estate if:
- The descendant’s will is invalid.
- If you need to change ownership of real estate or personal property (i.e., bank accounts, stocks) that are only in the descendant’s name and there is no right of survivorship
- If you need to pay the descendant’s debts of the estate or property
- If you get the deceased’s medical records
There are a few exceptions, however, including:
- If there is joint ownership, i.e., the deceased and their spouse both owned the property, then their spouse is entitled to ownership of the estate
- A bank account, retirement fund, or proceeds from a life insurance policy names a beneficiary
- The property is held in a trust by the descendants
Why can it take so long to settle an estate?
Typically, the personal representative has three years of when the descendent passed away to probate the estate, though again, there are a few exceptions to the rule:
- Voluntary admission, which is a simplified probate procedure that applies to estates with little assets and no real estate
- When the heirs are yet to be determined
- If there is an additional probate proceeding
Once the ownership is declared, it can take 4 to 8 weeks to finalize on average — depending on contributing factors and court determination.
Inheritance tax and estate tax in Massachusetts
While there is no inheritance tax in Massachusetts, your heirs could be subject to estate tax if your estate is worth more than $1 million. However, if you inherit a property in Massachusetts, you must pay Capital Gains tax if you decide to sell it.
How much you pay depends on the difference between the appraised value of the house and the selling price. How much you earn and the length of time you’ve owned the home will also impact the final balance.
For instance, say you live in San Francisco, you’re single, and your annual income is $7,000,000. You suddenly learn that a long-lost relative has died, and due to intestacy law, you inherit the property.
You learn that the property’s initial value is $50,000, and after adding value for over a year and you decide to sell it for $550,000, you need to pay a total of $190,500 capital gains tax.
If you decide to sell it for the same price, but the length of ownership is less than a year, you will need to pay $275,500.
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