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What Does Intestate Mean?

Intestate means that someone dies without leaving a valid will. It’s also referred to as intestacy. For example, the phrase “he died in intestacy” means the person died without a valid will determining who or what receives their assets.
Those assets, property and money the decedent owned, make up the deceased person’s estate. When someone dies in intestacy, their entire estate is called an intestate estate.
After an intestate death, the deceased person’s intestate estate goes into a process called intestate succession.

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How Intestate Succession Works

Intestate succession is when a probate court determines the beneficiaries of an intestate estate. Probate courts handle legal matters related to wills and estates. 
All estates enter the probate process after someone’s death. First, a court-appointed administrator compiles the deceased person’s assets and debts. They list things such as the decedent’s bank accounts, real estate holdings, and unpaid bills.
Next, the administrator uses the estate’s assets to pay off any debts, such as credit card and mortgage debt. In most cases, an estate’s heirs inherit assets left after the administrator pays the deceased’s bills. 
If there’s no valid will, though, the estate falls into intestate succession. In intestate succession, a probate court, through its appointed administrator, determines an intestate estate’s heirs. 
They start by identifying the decedent’s legal heirs. Legal heirs for an intestate estate are the deceased person’s family members. State law determines who inherits what from the estate.
Typically, intestate succession works by the decedent’s surviving spouse inheriting half of the intestate estate. If they have surviving children or grandchildren, the administrator splits equally among them the estate’s remaining half. If no children or grandchildren survive, the surviving spouse may inherit the entire estate.
Grandchildren inherit if their parent is deceased at the time of intestacy. For example, Jane’s father was his parents’ only child. He dies before both of his parents. They pass away without a valid will, leaving Jane the sole inheritor of her grandparents’ estate.
The probate court administrator often determines inheritance based on family order. If no spouse, children, or grandchildren survive, then next in line is usually parents and siblings. Nieces, nephews, aunts, uncles, and cousins come next.
The intestate succession process doesn’t include unmarried partners or friends the deceased person knew. That’s why having a will is the surest way you can provide for a loved one after you pass away, especially if they’re not your legal heir.

Property Included In Intestate Succession

As mentioned above, dying without a will puts a decedent’s estate in intestate succession. This process identifies the deceased person’s assets and legal heirs. 
But intestate only applies to property not designated to an heir or beneficiary. For example, a person’s life insurance policy usually lists one or two beneficiaries. If the holder of the policy dies, the people listed as beneficiaries on their policy receives the policy’s payout. 
Or, let’s say you own real estate with a business partner. You both, or the name of your co-owned company, are listed on the property’s deed. If you pass away, your business partner inherits the property.

Know Your State Law

It’s essential to note that intestate succession laws vary by state. 
For example, in some states, such as Texas, an intestate estate’s divided among heirs following community property law. Community property states that a married couple jointly owns assets acquired during their marriage. If one-half of the couple dies, the surviving spouse inherits those assets. If both spouses die, survivorship, or inheritance, passes to their surviving children.
Some states’ intestacy laws dictate how an intestate estate’s managed based on where the decedent lived. Others do so by where the deceased person owned property. 
And states handle what’s called separate property differently. Separate property is when a member of a married couple owns property to which their spouse has no legal claim. Often this is real estate someone buys before marrying their spouse.
In California, an intestate estate’s separate property goes to the surviving spouse if there are no other surviving heirs. If there are, such as surviving children, the separate property’s divided between the surviving spouse and the other heirs.
Because intestacy laws differ by state, you should work with a probate attorney for your estate planning. Probate attorneys are lawyers with expertise in wills and estates. And they should know the intestate succession laws where you and your property’s located.

What Real Estate Investors Should Know About Intestate

Real estate investors should plan their estates. Having a will is the surest way to ensure your loved ones are protected if you pass away. And estate planning can save your heirs time, effort, and pain at what might already be a difficult time.
Because intestacy laws are varied and complicated, investors should hire an attorney. A probate lawyer can help you draft a will that executes your wishes and keeps your assets from entering intestate.