Intestacy: It Can Be as Dirty as It Sounds

Posted By : admin
Category : Estate Administration
24 - Oct - 2014

What happens to your stuff if you die without a will? In Indiana, the answer is “Intestacy.” If it sounds dirty, that’s because, as you’ll see from the following summary, the laws of intestacy can result in some very awkward and sticky estate situations.

Here’s a quick (and oversimplified) rundown of Indiana’s laws of intestate succession:

If you are married with at least one child or descendant of a predeceased child, then your spouse gets half and the other half is divided amongst the child/descendants.

Here’s where it starts to get squirrelly:
If you are married, but have no children, then your spouse gets three-fourths (3/4), and your surviving parent(s) get one-fourth (1/4).
People are usually pretty surprised by this one. In my experience, most folks would prefer that their surviving spouse receive all of their assets, but that’s not what the code dictates. Even more troubling it that this automatic transfer to parents can complicate, or ultimately torpedo, the parents’ estate or medicaid plans.

If you are married, with no surviving descendants or parents, then the whole estate goes to your spouse.

Now here’s where it gets really squirrelly:
If you’re married and the current spouse is not your first spouse, AND this current spouse has no children with you, AND you have children from a previous relationship, guess what happens…
The current spouse get one-half of the personal property, but only gets one-fourth (1/4) of the fair market value (minus liens or encumbrances) of any real estate you own.
This is another instance where the Code doesn’t manifest the intent of most ordinary folks. You can imagine the strange and awkward situations that result from this subsection when the children and their step-parent start divvying up the assets.

If you are unmarried, with a child or children, or descendants of a predeceased child, then the whole estate is shared by the children, as one might expect.

If you are unmarried and have no children (or descendants of children) then the estate is divided between your surviving parents (if any) and your surviving siblings (or children of deceased siblings).

If you are unmarried and have no children, surviving parents, or surviving siblings, then the estate goes to nieces/nephews. If there are no nieces or nephews, then it goes to your grandparents, and if no grandparents, then it goes to your aunts and uncles (and potentially cousins if their parent has predeceased you).

If none of those people exist, then the estate goes to the State of Indiana.

Obviously, this is a hyper-simplified explanation of the law of intestate succession in Indiana. You can check the actual code section here for greater detail. This summary should, however, give you a basic idea of what happens if you die leaving no will. There are myriad ways to obtain different results through planning, which can include wills, trusts, asset titling and transfer, etc. It’s an area rife with pitfalls, so please consult with an experienced attorney before proceeding. If you have questions, please feel free to contact Greg Halcomb at 317-575-8222, or contact us by email.