Rules and Regulations
If a person dies without a Will, the Intestate Process begins with the Orphan's Court appointing a Personal Representative or Administrator to receive and manage any legal claims against the Estate, pay creditors, and manage the Estate's expenses. Estate expenses range from the decedent's (person who has died) unpaid bills, loans, administrative fees, costs, and payments to the Administrator of the Estate for services rendered.
After the Court appoints the Administrator and the expenses are paid, the assets will be distributed according to the Laws of Intestate Succession.
Having knowledge of the laws of Intestate Succession can be a valuable tool in the Estate Planning decision-making process.
If you die without a Will in Pennsylvania, your assets will go to your closest relatives under the State's “Intestate Succession” Laws.
Which Assets Pass by Intestate Succession?
First, only assets that would have passed through your Will are affected by Intestate Succession Laws. Usually, that includes only assets that you own alone, in your own name.
Second, it is crucial to understand that many kinds of assets need not, and are not, passed through a Will and therefore, are not affected by Intestate Succession Laws, including the following:
In most instances, these assets pass to the Surviving Co-owner or to the Named Beneficiary in the 'contracts' or 'documents' relevant thereto, whether or not there is a Will. To determine who inherits the assets, you will need to locate the documents in which the Co-ownership or Beneficiary designation was established.
Who Gets What in Pennsylvania?
Under Intestate Succession, who gets what depends on whether or not you have a Spouse, Living Children, Parents, or other close Relatives when you die.
In Pennsylvania, if you are married and you die without a Will, what your Spouse receives depends on whether or not you have living Parents or Descendants, i.e., Children, Grandchildren, or Great-grandchildren. If you have no living Descendants, your Spouse inherits all your Intestate Property or Assets.
If you have living Descendants, they and your Spouse will share your Intestate Property, as follows:
If you die with Parents but no Descendants - Your surviving Spouse inherits the first $30,000 of your Intestate Property, plus fifty (50%) Percent of the balance of the Assets in your Estate.
Example: Mary is married to John, and her father is still alive. Mary owns a house in joint tenancy with John, and John is also the named beneficiary of Mary's retirement account. When Mary dies, John automatically inherits the house and any remaining retirement funds; those things are not Intestate Property. Mary also has $350,000 worth of additional Property that would have passed under a will if she had made one. John inherits $190,000 worth of that Property – that is, $30,000 plus $160,000 worth of the remaining $320,000. Mary's father inherits $160,000.
If you die with Children or other Descendants from you and the surviving Spouse - Your surviving Spouse inherits the first $30,000 of your Intestate Property, plus one-half (50%) of the balance of the Estate's Assets.
Example: Bill is married to Karen, and they have two grown Children. Bill and Karen own a large bank account in joint tenancy, and Bill took out a life insurance policy naming Karen as the beneficiary. When Bill dies, Karen receives the life insurance policy proceeds and inherits the bank account outright. Bill also owns $450,000 worth of Property that would have passed under a Will, so Karen inherits $240,000 worth of that Property – that is, $30,000 plus $210,000 of the remaining $420,000. The two Children inherit $105,000 each.
If you die with Descendants who are not the Descendants of your surviving Spouse - Your Spouse inherits 1/2 of your Intestate Property.
Example: Bob is married to Jane and also has a 12-year-old daughter from a previous marriage. Bob owns a house in joint tenancy with Jane, plus $200,000 worth of additional, separate Property that would have passed under a Will if Bob had made one. When Bob dies, Jane inherits the house outright and $100,000 worth of Bob's Property. Bob's daughter inherits the remaining $100,000 share of Bob's Property.
Note: These rules do not apply if your Spouse has “willfully neglected or refused to perform the duty” of supporting you for at least one year. They also do not apply if you die in the State of Pennsylvania during divorce proceedings with your Spouse. (20 Pa. Cons. Stat. § 2106.)
If you die without a Will in Pennsylvania, your Children will receive an “Intestate Share” of your Property. The size of each Child's share depends on how many Children you have and whether or not you are married. (See the table above.)
For Children to inherit from you under the Laws of Intestacy, the State of Pennsylvania must consider them your Children, legally. For many Families, this is not a confusing issue, but it's not always clear. Here are some situations that might arise:
Step-children are the children of your partner or spouse; you have not adopted them. (If you have adopted them, your adopted children are legally your children, with the same legal connections to you as children born to you.)
There is no legal tie between you and your step-children; your step-children are not considered your legal heirs. In terms of will-making, you have no obligation to leave anything to your step-children. While most state laws do not require anyone to leave property or assets to their children, they do have laws that:
But these laws do not apply to step-children. In effect, your legal relationship with your step-children is equivalent to someone with no familial relation - like a friend or neighbor.
The flip side is that if you want to ensure your step-children receive something when you die, you must make a Will or Trust and name them specifically. If you die without a Will, your step-children receive nothing of your Estate.
If you make a Will that leaves gifts to "my children," your non-adopted step-children will not be included in that group. Again, even if you might think of them as your children, they are not legally considered to be your children. Making gifts to categories of people opens up the possibility of confusion and is generally not advised.
See my Blog on this issue: Step-Children and Your Estate.
If you want to make sure that your step-child receives an inheritance, consider the following.
First, if you want to leave a gift to a step-child, you certainly can, just as you would leave a gift to anyone else. Step-children can always inherit under your Will if you name them. Using your Will, you can leave your step-child a percentage of your entire Estate, or you can leave specific gifts - like $5,000, your computer, or your golf clubs.
If you have other children, when you make your Will, do not use terms like ''issue,'' ''descendants,'' ''children,'' or ''heirs” to refer to them. Those terms are always subject to confusion, and they are additionally complicated for blended families with step-children. Instead, name each child and each step-child using their individual names.
In addition to (or instead of) using a Will, you can also leave gifts to your step-child using a number of other Estate Planning tools. For example:
Of course, you'll need to keep in mind that any gift you leave to your step-child will reduce the amount of property available to your other beneficiaries - your other children and your spouse. For some people, this can be an area of concern. See “Leaving an Explanation of Your Decisions” below.
If you die without a Will and do not have any Family, your Property will “escheat” into the State's coffers.
This old Common Law Doctrine transfers the Property of a person who dies without Heirs to the State. It serves to ensure that Property is not left in "limbo" without recognized ownership. This rarely happens, however, because the laws are designed to get your Property to anyone who was even remotely related to you.
For example, your Property will not go to the State if you leave a Spouse, Children, Grand-Children, Parents, Grand-Parents, Siblings, Nieces, Nephews, or Cousins.
It should be noted that before the Decedent's Estate is distributed, the Decedent's Debts, Taxes, Funeral Expenses, and Expenses of Administration are paid first, which is similar to what would happen if there was a Will. What remains is what makes up the Decedent's "Distributable Estate."
As noted, Joint Tenancy Property, Life Insurance payable to Beneficiaries other than the Estate, Bank Accounts Payable-on-Death to specified individuals, and other assets that have been decided under a form of contract beforehand will pass in accordance with their terms and will not be part of the Decedent's Estate to be distributed by the Laws of Intestate Succession.
The Keystone State is among one of several States that still assess a separate State Inheritance Tax on certain Property owned by Pennsylvania residents and Real Estate and Tangible Personal Property located in Pennsylvania that is owned by a non-resident.
For deaths occurring on or after June 30, 2012, working family farms and some related agricultural commodities are exempt from the Pennsylvania inheritance tax.
Note: State Laws are subject to change at any time, usually through enacting new legislation but sometimes through higher court decisions and other means. You should contact a Pennsylvania Estate Planning Attorney or Tax Attorney or conduct your own legal research to verify the State Law(s) you are researching.
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