Intestate

Intestate Intestacy Estate Division Inheritance Laws Wills Trusts Estate Planning Probate
A person who dies without having made a will. The estate, in these circumstances, is divided according to the rules of intestacy. The division depends on the personal circumstances of the deceased.
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Definition

Intestate: A legal term referring to a person who dies without having made a legal will. When a person dies intestate, their estate is divided according to the rules of intestacy. These rules vary by jurisdiction but typically provide a hierarchy for how the deceased’s estate is distributed among surviving relatives.

Examples

  1. Example 1: John dies without a will. According to state intestacy laws, his estate is divided between his surviving spouse and children.
  2. Example 2: Mary, who has no surviving spouse or children, dies without a will. Her estate is transferred to her parents under the rules of intestacy in her jurisdiction.

Frequently Asked Questions

What happens if someone dies without a will?

If someone dies without a will, their estate is distributed according to the intestacy laws of their jurisdiction. Generally, the estate will first go to close relatives such as spouses, children, or parents.

Who inherits the estate if there is no surviving spouse or children?

If there is no surviving spouse or children, the estate is typically divided among more distant relatives like parents, siblings, or even aunts and uncles, depending on the jurisdiction’s laws.

What is a fixed statutory legacy?

A fixed statutory legacy is a portion of the estate that is automatically allocated to the surviving spouse or partner before the remainder of the estate is divided.

Can stepchildren inherit under intestacy rules?

Rules vary by jurisdiction, but typically only biological and legally adopted children are entitled to inherit under intestacy rules. Stepchildren usually do not have rights to the estate unless specifically mentioned in a will.

Does the estate go to the state if no relatives are found?

Yes, if no surviving relatives are found, the estate may escheat, or revert, to the state.

  1. Interest-in-Possession Trust: A type of trust where the beneficiary is entitled to income produced by the trust property for a specific period or for life.
  2. Probate: The judicial process through which a will is validated, and an estate is administered.
  3. Estate Planning: The process of arranging for the management and disposal of a person’s estate during their life and after death.
  4. Executor: A person appointed to administer the estate of a deceased person.
  5. Trustee: A person or entity that holds and manages assets in a trust for the benefit of beneficiaries.

Online References

  1. Nolo’s Guide to Intestacy
  2. American Bar Association’s Information on Dying Without a Will
  3. FindLaw on Intestacy

Suggested Books for Further Studies

  1. “The Executor’s Guide: Settling a Loved One’s Estate or Trust” by Mary Randolph J.D.
  2. “Nolo’s Essential Guide to Wills & Estates” by Denis Clifford Attorney
  3. “Beyond the Grave, Revised and Updated Edition: The Right Way and the Wrong Way of Leaving Money to Your Children (and Others)” by Gerald M. Condon

Accounting Basics: “Intestate” Fundamentals Quiz

### What does "intestate" refer to? - [ ] A type of trust - [x] A person who dies without a will - [ ] A probate procedure - [ ] A method of estate planning > **Explanation:** Intestate refers to a person who dies without having made a will. In such cases, the estate is distributed according to intestacy laws. ### Who typically receives the estate first when a person dies intestate? - [x] Spouses and children - [ ] Charities - [ ] Friends - [ ] Government > **Explanation:** When a person dies intestate, the estate typically first goes to the surviving spouse and children according to the jurisdiction's laws. ### What happens to an estate if there are no close relatives available? - [ ] It is given to friends - [ ] It remains unclaimed - [x] It may escheat to the state - [ ] It is divided among the deceased's colleagues > **Explanation:** If no close relatives are available to claim the estate, it may escheat to the state according to the intestacy laws. ### What is a fixed statutory legacy? - [ ] A debt the deceased owed - [ ] A type of insurance - [x] A portion of inheritance automatically given to the spouse - [ ] A charitable contribution > **Explanation:** A fixed statutory legacy is a portion of the estate that is automatically allocated to the surviving spouse or partner before the remainder of the estate is divided. ### Are stepchildren typically entitled to inherit under intestacy laws? - [x] No, they are not usually entitled - [ ] Yes, always - [ ] Only if they petition the court - [ ] Only if there are no other relatives > **Explanation:** Stepchildren are not usually entitled to inherit under intestacy laws unless mentioned in a will or legally adopted. ### What does the term 'probate' refer to? - [ ] The writing of a will - [x] The judicial process of validating a will and administering the estate - [ ] The creation of a trust - [ ] The distribution of gifts > **Explanation:** Probate refers to the judicial process through which a will is validated, and an estate is administered. ### Who is a trustee? - [ ] A devisee - [x] A person or entity that manages a trust - [ ] A state official - [ ] An heir > **Explanation:** A trustee is an individual or entity that holds and manages assets in a trust for the benefit of the beneficiaries. ### If a person dies without a will and without any living relatives, who inherits the estate? - [ ] Friends - [x] The state - [ ] Charity organizations - [ ] The deceased’s creditors > **Explanation:** In such scenarios, if no living relatives are found, the estate may revert to the state (known as escheat). ### What term refers to the process of arranging the management and distribution of a person’s estate? - [ ] Intestacy - [x] Estate Planning - [ ] Probate - [ ] Trust Administration > **Explanation:** Estate planning refers to the process of arranging for the management and disposal of a person’s estate during their life and after their death. ### Can adopted children inherit under intestate rules? - [x] Yes, they are treated as biological children - [ ] No, only biological children - [ ] Only if stated in a will - [ ] Only under certain conditions > **Explanation:** Adopted children are treated as biological children under intestacy rules and therefore inherit in the same manner.

Thank you for embarking on this journey through our comprehensive accounting lexicon and tackling our challenging sample exam quiz questions. Keep striving for excellence in your financial knowledge!

Tuesday, August 6, 2024
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