If you die without a Will, the Commonwealth of Pennsylvania has a default plan in place that determines who receives your assets. Dying without a valid Will is called intestacy, so distribution of assets without a valid Will is controlled by the intestacy statute. Some people believe that if you die without a Will, all of your assets go to the Commonwealth of PA. That is not accurate. The intestacy statute includes an order of preference for who receives assets and at the bottom, if there are no relatives covered by the statute who qualify to take the assets, they go to the Commonwealth.
Not surprisingly, the intestacy statute is designed to distribute assets in the way that our legislators believe most people would want their assets distributed if they had a Will. This may be accurate for some people, but one size does not fit all. For example, if you are married and have no children and no living parents, your spouse receives all of your assets. That is probably what most people (but not everybody!) would want to happen. However, if you are married and have a surviving parent, but no children, your spouse receives a portion of your assets and your parent(s) receive the rest of your assets. Further, if you are married and have children, your spouse receives a portion of your assets and your children receive the rest of your assets. Based on my experience, most people would not choose to enact either of those scenarios.
The intestacy statute also provides for unmarried individuals, with their children being the primary beneficiaries and then spreading out to other family members. Based on my experience handling estate planning for unmarried individuals, their wishes can vary greatly from what the intestacy statute provides because every family is unique.
The intestacy statute does not include unrelated individuals such as unmarried partners, stepchildren, foster children, godchildren and friends. If you want any of your assets to go to unrelated individuals, you need to specify those instructions in a valid Will!
So there is a plan for your assets if you die without a valid Will. It’s just not your plan and you have no say in the matter.
The intestacy statute only covers assets that would otherwise be controlled by your Will. This does not include assets with beneficiary designations, such as life insurance and retirement accounts. Assuming you have designated beneficiaries for those assets (please check and do so right after you finish reading this riveting blog post), they are distributed according to the beneficiary designation.
If you live or work in the central Pennsylvania area, including Mechanicsburg, Carlisle, Harrisburg, Hershey and surrounding communities and would like to discuss the intestacy statute or any other family law or estate planning or administration issue, please contact me.