You've heard countless times that you should have a will. But have you ever wondered what will happen to your property if you should die before you get around to making one?
The short answer is that the State of Ohio has a law, known as an intestacy statute, which dictates how your property will be distributed. Intestacy laws generally attempt to distribute your property as the state imagines most people would do if they had actually made an estate plan. It's a very "one size fits all" system, and like all things that are "one size fits all," it often doesn't fit a particular individual's needs very well.
A surviving spouse would inherit everything if the decedent left no children (or their lineal descendants, such as grandchildren or great-grandchildren). The surviving spouse would also take everything if there were children, grandchildren, or great-grandchildren, so long as those descendants were descendants of both the decedent and the surviving spouse.
From there it gets a little more complicated. People who are divorced or widowed often remarry, leaving a second spouse and children from a first marriage (who may or may not have a cordial relationship with a stepparent). Depending on the number of stepchildren, and whether the surviving spouse had any biological or adopted children together with the decedent, the spouse would take a fixed amount ranging from $20,000 to $60,000, and then from one-third to one-half of the remainder of the estate.
If a decedent leaves no spouse, and no children or other lineal descendants, the estate goes equally to the decedent's parents, or to the surviving parent if the other died before the decedent. If the decedent's parents died first, the estate goes to siblings of the decedent in equal shares. No distinction is made between full and half-siblings for this purpose.
If a decedent has no spouse, no children or lineal descendants, no surviving parents or siblings or siblings' lineal descendants, the estate would go to the decedent's grandparents, if by some chance one or all of them were alive. If not, the decedent's estate would go to their lineal descendants: the aunts and uncles or cousins of the deceased. If no one alive answers to that description, the estate would go to whomever was next of kin.
If the decedent had no surviving relatives at all, the money would escheat (revert) to the state.
What if someone belonged to a group entitled to inherit from the deceased, but that person died first—say, one of the deceased's children, or one of his siblings? That person's share would go to his or her lineal descendants per stirpes.
Per stirpes is a Latin phrase meaning "by the branch." It means that each branch of a family would get an equal share. Let's say Bob had no spouse, but three kids: Anne, Billy, and Carol. Anne dies before Bob, leaving behind her two children. Under Ohio's intestacy laws, Billy and Carol would each take one third of the estate. Anne's two children would divide the one-third share she would have taken if she were alive.
If intestacy law will divide up your property, you may think that the money you would spend on an estate plan would be wasted. In almost any scenario, you would be wrong about that. First of all, an estate plan is more than just who gets your property; it includes medical directives, powers of attorney, and other documents to give effect to your wishes if you're incapacitated.
Second, having an estate plan in place will expedite the distribution of your assets, making life easier for your loved ones in the days, weeks, and months after your death. For instance, without an estate plan, no real property can be sold without the consent of all the heirs unless an expensive and time-consuming land sale proceeding is instituted.
Third, while intestacy laws say who gets how much, it doesn't specify who gets which items. Failure to have an estate plan means that your heirs may wind up fighting over certain assets, leading to strained relationships and extra costs to settle the estate.
Fourth, if you expect to have an estate with extensive or complex assets, estate planning will include planning to minimize any estate tax your heirs would have to pay.
Last but not least, an estate plan allows you to customize the distribution of your property: to leave funds to a charity whose work you support, or to remember a more distant relative or friend who would not have received any of your estate under the intestacy statute.
Remember, the intestacy statute is a last resort, not a substitute for an estate plan. You'll feel more secure about your future, and your family's, if you have an estate plan designed for your specific needs.