If you've ever wondered what happens if you die without a will, the short answer is that somebody else or some law will likely make that determination — and this may not appeal to you. The more complete answer is that it depends on your unique situation.
The outcome of dying without a will is typically largely determined by the state you live in because state law generally governs inheritance rules, taking into account your marital status and whether you have any children. If you're not sure what happens when you die without a will, it's important to look into your state's laws, but here is some general information to keep in mind.
Selection of an Estate Administrator
If you die without a will, the first matter that a probate court will likely address is to appoint an administrator of your estate, according to the American Bar Association. In a will, you designate an "executor," which is a similar role; the administrator or executor distributes any applicable assets you've left your beneficiaries. The main difference is that executors specifically follow the instructions you've left in your will (within the bounds of the law).
The court itself may act as the administrator or appoint a trustee. More typically, however, the court designates a surviving spouse, or responsible adult child, if it is confident that person can handle the responsibilities.
Some Common Situations for Asset Distribution
Dying without a will doesn't mean that administrators can do whatever they want with your assets, however. Their function is mainly to pay off your debts from your remaining funds, then follow asset distribution principles that are commonly spelled out by state laws. How your assets are distributed often depends on your family configurations, but again, varies by state. Here are some of the common scenarios:
- If you're married with children: Assets generally go to your surviving spouse. If you have children from a previous spouse, assets may be split between your most recent spouse and children.
- If you're married without children: Assets generally go to your spouse. However, some assets acquired prior to your marriage, called "separate property," could wind up divided among other family members.
- If you're single without children: If your parents are alive, your assets often go to them. If you have siblings, your estate may be divided up among them.
- If you're single with children: Assets are typically divided equally among your children. If any have died before you but had children of their own, the portion of your estate that would have gone to that child may be divided among their children.
Some Assets That Typically Aren't Included in Wills
If you die without a will, some assets are not affected. Again, you should check with your own state's laws before making any assumptions, but here are some examples:
- Retirement plans: You may designate a beneficiary (or beneficiaries) when you open a retirement account. Those individuals you designate will receive those funds automatically. You can change your beneficiaries at any time.
- Death benefits from a life insurance policy: You may select a beneficiary upon purchasing a life insurance policy. Therefore, death benefit proceeds are not affected by either an administrator or a will.
- "Transfer on death" securities and "payable on death" bank accounts: You select a beneficiary, or beneficiaries, for these accounts when you designate them as accounts that transfer when you die.
- Revocable trusts (also called living trusts): You transfer your assets into this trust. You can act as the trustee, but also designate a "successor" trustee to determine what happens with whatever is in the trust when you die.
- Joint tenancy assets: These assets (often a home or bank account) automatically go to the joint tenant upon your death.
No matter what your circumstances are, dying without a will isn't ideal because you miss the opportunity to clearly define your wishes. If you don't have a will, you may want to seek the expertise of an estate attorney who understands your circumstances and the laws in your state.