What Happens If You Die Without a Will?

die without a willUnderstanding what would happen if you die without a will in North Carolina, or any state for that matter, is something that everyone should understand, but many people don’t.

What I want to do here today is explain exactly what happens in North Carolina if you die without a will in place, and then underscore some of the main problem areas that can arise as a result.

Have You Protected Your Kids from This Huge Hidden Danger?

What Does It Mean if You Die Without a Will?

If you die without a will, you are said to have died “intestate”. Because this is a relatively common occurrence, each state has developed their own set of statutes (or rules) to deal with what would happen to your property in this situation.

In North Carolina, this is called the Intestate Succession Statute and can be found in Chapter 29 of the North Carolina General Statutes.

If you live somewhere other than North Carolina, you will need to check the statute in your state.

My goal in this post is to help you understand what happens if you die without a will in place, and if you don’t like what would happen, to get you to start thinking about putting together an estate plan.

Who Get’s Paid Under the North Carolina Intestate Statute?

If you die without a will, and you have assets in your estate, then your personal debts and the costs to administer your estate (i.e. funeral expenses, cost of probate, burial expenses, etc.) will be paid first. This could also include lawyer fees.

The remainder of your assets will be divided based on how many heirs you have. Here is a brief rundown of the different situations that come up, and how your estate would be divided if you die without a will in North Carolina:

You Don’t have a Spouse or Children, but your Parents are still alive

This is probably the most frequent scenario, as many unmarried young adults don’t have “get a will” at the top of their list of things to do. If you have no heirs, but you have one or both of your parents that are still alive, then they will divide your estate equally. If only one of them is still living, then that parent will receive your entire estate.

You Leave Behind a Spouse and Parents, but no Children

This is another common scenario because many young married couples don’t think to get their wills drawn up either. If you die without a will in this situation, then your spouse will receive one-half (½) of any real estate that you owned personally, and the first $100,000 of your personal property, plus 50% of the remainder of your personal property. Your parents would receive the remainder.

You Leave Behind a Spouse, but You do Not have Children, and Your Parents have Pre-deceased You

Your spouse would take all of your real estate, and all of your personal property.

You Leave Behind a Spouse and One Child

This is where things start to get tricky, and the statutes change all the time. If you are reading this after 2016, you will want to check the statute above to make sure this information is still valid.

If you die without a will in place and you leave behind a spouse and a child, then your spouse will split equally any real property your owned with your child. In addition, your spouse would receive the first $60,000 of your personal property and would split the remainder with your child.

You Leave Behind a Spouse and Two or More Children

In this situation, your spouse will receive a one-third (⅓) interest in any of your real property, and your children would equally divide the remaining two-thirds (2/3) interest in the property.

Your spouse would also receive the first $60,000 worth of your personal property, plus one-third (⅓) of the remainder. Your children would split the remaining two-thirds (2/3).

You Leave Behind One or More Children, but No Surviving Spouse

If you have no spouse, but you do have children, then your kids would divide equally your real and personal property. This could happen in situations where your spouse pre-deceased you, or if you were divorced.

You Don’t have any Surviving Parents, and you Don’t have a Spouse or Children

In a situation where you don’t have any parents living, and you don’t have a surviving spouse or kids, then the intestate statute has an elaborate scheme for dividing up your real and personal property.

Essentially, the court would go up the line to find your paternal and maternal grandparents, who would split your estate if any of them were still alive. If you had no grandparent living, then the statute would leave your property to any living aunts, uncles, etc. Basically, they would be looking to see if you had any living relatives at this point.

If you don’t have any living heirs, then your property would “escheat” to the State of North Carolina.

What to Make of the Intestacy Statutes…

Upon first glance, this statutory scheme makes a lot of sense. It creates an orderly method to dispose of your real estate and your personal belongings and assets.

It provides for your children as well as your spouse. If you don’t have kids or a spouse it leaves everything to your parents.

Makes sense, right?

Well, yes and no.

In just thinking of my family, I can start to see a host of problems and issues, which I’ve detailed here below. Let’s go through each problem area, one-by-one.

1. You are Estranged from One or More of Your Parents

Let’s say that you and your parents aren’t on speaking terms. Maybe you haven’t been on speaking terms for quite some time. Maybe you NEVER knew one of your biological parents.

How would you feel about the parent that you knew and loved splitting your estate with a parent that you never knew? Or how would you feel if your spouse had to split your estate with that parent?

Which leads to the next problem with the intestate statutes…

2. Your Spouse Would Share Your Estate With Your Parents

This can be a big problem. I would venture a guess that most married couples would want their spouse to take their entire estate. But that’s not what the intestate statute says.

The statute would have your spouse divide up your home with your parents. Ugh.

So let’s say you are a newlywed and you bought a home prior to your marriage. You are the only person on the deed. Instead of receiving this property outright, your spouse will be a 50% owner of this property with your parents.

How would that feel to you? If you are like most people… not good.

Click here to learn more about estate planning in North Carolina.

3. You Aren’t Married, but You’ve Been in a Committed Relationship for a Long Time

Let’s say you are engaged, but you haven’t yet tied the knot. In this situation, your fiancé is SOL. They would receive NOTHING as your parents would take everything you owned, house and all.

If your parents didn’t like your fiancé, they could immediately (and literally), kick them to the curb, evicting them from your house.

Is that what you would want?

And even if you didn’t want to leave everything to your fiancé, your parents would take everything, leaving out your siblings, cousins, charities, and anyone else that you would have wanted to leave something to.

4. What about Blended Families?

A blended family is one where you are a step-parent to your spouse’s children, or your spouse is a step-parent to your children or both. Assuming no step-parent adoptions have taken place, then the step-children would not receive any inheritance via the intestacy statutes.

This was a bigger problem with LGBT couples prior to same-sex marriage being legalized with the US Supreme Court’s Ruling in 2015.

However, I’ve seen lots of situations where a parent has remarried after a death or divorce and their new spouse steps in to become a wonderful new step-parent. Without a valid will or a step-parent adoption, the step-children would receive nothing.

5. There is Nothing in the Intestate Statute that Provides a Guardian for Your Minor Children

Many couples first recognize the need for a will after they have children. They understand that passing on their property, while important, isn’t nearly as important as making sure that their children are properly taken care of after they are gone.

Unfortunately, the intestate statute has no mechanism for appointing a guardian for your children. If you die without a will, the courts will decide who will become the guardian for your children.

If you leave behind a spouse, this isn’t a major problem, as they would continue to care for your kids. But if your spouse had predeceased you, or if the two of you died simultaneously, then if you die without a will you would have no say in who will raise your kids.

Click here to learn more about choosing a guardian for your kids.

6. The Intestate Statute Leaves Property to Your Children Outright

Another main reason to have a valid will and trust in place is so that you can leave your financial assets (including life insurance proceeds) to the trust, as opposed to your children outright.

The reason for this is that a minor child cannot own property. Instead, the court would have to appoint someone to manage that property for the benefit of the minor child. The person appointed by the court would have to provide annual accountings of how the money was spent, down to the penny.

Although this may seem like a reasonable idea, the reality of the situation is much different. This is an expensive process, time-consuming and extremely stressful to the individual tasked with providing the accounting. Typically, this person would also be your children’s caretaker. Having to account for every penny of your children’s money, while also raising your kids, working, making sure the mortgage gets paid, etc., can be a daunting task.

This is one of the main reasons we recommend, as mentioned above, putting a will and a trust into place so that you have can pre-selected who you want to manage your children’s trust, including how you want that money spent, without court supervision.

7. Is “Equal” really Fair?

The intestate statute repeatedly refers to an equal division of your real and personal property. But does that really make sense?

Equal is not always “fair”.

You may have two children, one of which is an adult that you already paid to put through college, and the other is still in high school. Is it “fair” to give them each the same amount of money? You may want to give your younger child a bit extra to make sure they have enough money to pay for college.

8. Are Your Adult Children Prepared for a Financial Windfall?

You must also consider the consequences of giving large amounts of money and/or property to an adult child outright. In their early 20’s, even though your child is an adult, are they prepared emotionally to handle a large influx of money?

Are they financially responsible or do they lack financial self-control?

What if they recently married and their spouse is a spendthrift?

Do you want to protect your adult children from creditors and divorce?

In most situations, you may want to protect your adult children from themselves and place the money into a trust.

Click here to learn more about life insurance and estate planning, including 5 common mistakes people make.

9. Do You Want to Give Money to Charity?

Many people are active in their community and various volunteer organizations. Perhaps you have a sentimental attachment to your college or fraternity/sorority. Maybe you believe strongly in a certain cause.

Whatever those interests may be, they will not be considered under the intestate scheme in North Carolina. So if you have any charitable interests at all, you want to make sure to have a will drawn up that will address those areas and make sure that your wishes are addressed.

10. Other Potential Problem Areas and Special Circumstances

The North Carolina Intestate Succession Statute is very mechanical. And while it does a good job of conveying property in an orderly way, estate planning is not a “one size fits all” practice area.

Every person, every family, every individual is unique. What will work well for you and your family would be terrible for a different person and their’s.

There really is no excuse for failing to get a simple will drawn up. (I recently did a Facebook Live to talk about why some people may neglect this simple task).

So what are you waiting for? If you’ve read this far, go ahead and give us a call at (919) 460-5422 to discuss your needs. If you don’t have time to call right now, you can fill out this form, and a representative of our office will give you a callback.