Creating an Estate Plan Doesn’t Have to be Hard,
But Not Having One Can be Very Hard on Your Family!
If you die without a will in Pennsylvania, your assets will pass to your closet living next of kin pursuant to state “intestate succession” laws. Here are some basics on how intestate succession works in Pennsylvania.
Which Assets Are Affected?
Only those assets that would be passing through your estate are affected. Namely, those things that you own in your name alone with no joint owner and no other type of beneficiary designation. So it’s still possible that many of your valuable assets will not be impacted by intestate succession. For example:
♦ life insurance proceeds
♦ property you have already transferred into a trust
♦ funds in an IRA, 401(k), or other retirement account
♦ securities held in a transfer-on-death account
♦ payable-on-death bank accounts, or
♦ property you own with someone else in joint tenancy or tenancy by the entirety.
The above-mentioned assets will all still pass to pass to the surviving co-owner or to the beneficiary you designated, regardless of whether or not you have a will. However, those assets that are still in your name alone (real estate, bank accounts, stocks, etc.) will be affected.
So Who Gets What in Pennsylvania?
If You Die Without a Will, Here’s What Happens:
children but no spouse
children inherit everything
spouse but no descendants or parents
spouse inherits everything
spouse and descendants from you and that spouse
spouse inherits the first $30,000 of your intestate property, plus 1/2 of the balance
your descendants inherit everything else
spouse and descendants from you and someone other than that spouse
spouse inherits 1/2 of your intestate property
descendants inherit everything else
spouse and parents
spouse inherits the first $30,000 of your intestate property, plus 1/2 of the balance
parents inherit remaining intestate property
parents but no spouse or descendants
parents inherit everything
siblings but no spouse, descendants, or parents
siblings inherit everything
Pretty Complicated Right? But That’s Just the Beginning
The Spouse’s Share in Pennsylvania
In Pennsylvania, if you are married and you die without a will, what your spouse gets depends on whether or not you have living parents or descendants — children, grandchildren, or great-grandchildren. If you don’t, then your spouse inherits all of your intestate property. If you do, 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 1/2 of the balance.
Example: Mary is married to Tom, and her father is still alive. Mary owns a house in joint tenancy with Tom, and Tom is also the named beneficiary of her retirement account. When Mary dies, Tom will automatically inherit the house and any of the remaining retirement funds; those things are not intestate property. However, Mary also has $350,000 worth of additional property that would have passed under a will if she had made one. Tom 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 1/2 of the balance.
Example: Mark is married to Cathy, and they have two grown children.Mark and Cathy own a large bank account in joint tenancy, and Mark took out a life insurance policy naming Cathy as the beneficiary. When Mark dies, Cathy receives the life insurance policy proceeds and inherits the bank account outright. Mark also owns $450,000 worth of property that would have passed under a will, so Cathy 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: Robert is married to Jennifer and also has a 16-year-old daughter from a previous marriage. Robert owns a house in joint tenancy with Jennifer, plus $200,000 worth of additional, separate property that would have passed under a will if Robert had made one. When Robert dies, Jennifer inherits the house outright and $100,000 worth of Robert’s property. Robert’s daughter inherits the remaining $100,000 share of his property.
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 from your spouse. (20 Pa. Cons. Stat. § 2106.)
Children’s Shares in Pennsylvania
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 important things to keep in mind.
Adopted children. Children you legally adopted will receive an intestate share, just as your biological children do.
Foster children and stepchildren. Foster children and stepchildren you never legally adopted will not automatically receive a share.
Children placed for adoption. Children you placed for adoption and who were legally adopted by another family will not receive a share. However, if your biological children were adopted by your spouse, that won’t affect their intestate inheritance. (20 Pa. Cons. Stat. § 2108.)
Other relatives placed for adoption. A relative other than your child — for example, your grandchild — who was legally adopted by another family may receive a share of your estate if the relative would otherwise be entitled to inherit from you and you have “maintained a family relationship.” (20 Pa. Cons. Stat. § 2108.)
Posthumous children. Children conceived by you but not born before your death will receive a share. (20 Pa. Cons. Stat. § 2104.)
Children born outside of marriage. If you were not married to your children’s mother when she gave birth to them, they will receive a share of your estate if (1) you and their mother get married later, (2) you acknowledged your paternity, or (3) your paternity is otherwise proved under Pennsylvania law. (20 Pa. Cons. Stat. § 2107.)
Children born during your marriage. Any child born to your wife during your marriage is assumed to be your child and will receive a share of your estate.
Grandchildren. Your grandchildren will receive a share only if their parent (your child) has died before you do.
This can be a tricky area of the law, so if you have questions about your relationship to your parent or child, get help from an experienced attorney. If you want to read the law itself, you’ll find a link at the end of this article.
So, Will the State End Up With Your Property?
If you die without a will and don’t have any family, your property will “escheat” into the state’s coffers. However, this very rarely happens because the laws are designed to get your property to anyone who was even remotely related to you. For example, your property won’t go to the state if you leave a spouse, children, grandchildren, parents, grandparents, siblings, neices, nephews, or cousins.
After reading all of this, you’re probably starting to understand the importance of having, at the very least, at least a basic estate plan in place. If you’ve been thinking about getting your estate planning together, quit procrastinating and give us a call today at (412) 381-7370 to schedule your free legal consultation or visit us online at www.americanwillsandestates.com
