April 6, 2021
We often speak about the importance of having a last will and testament to provide for, among other things, the orderly disposition of your assets when you pass away. Some people, however, decide that they do not want to write a will. It could be because they feel that their estate is too small. There is no size requirement when writing a will. Your will is intended to ensure that your assets go to the people that you want to receive them, regardless of whether your estate is worth $10,000 or $10,000,000. In fact, smaller estates become more problematic an expensive to administer when there is no will. Another myth that many believe is that they really don’t need a will since “everything will go to their spouse, anyway.” The problem is that under Pennsylvania law (as well as other states’ laws), that isn’t exactly how it works. Yes, it is true that jointly held property with a spouse transfers upon death by operation of law to the surviving spouse, but that is only true if the asset is titled in the name of both spouses as either tenants by the entireties or as joint tenants with right of survivorship. Property or assets held in the name of the decedent alone will not transfer at death to the surviving spouse and must pass through probate.
As stated above, a will provides for the orderly distribution of your assets to the persons that you name as your beneficiaries. But what happens if you do not have a will? Who will receive your assets? Who will be responsible for administering your estate? We will leave that last question for a later article. For now, let’s talk about how the assets in your estate will be distributed.
How the assets will be distributed if you die Intestate
When you die with a will, your estate will be a “testate estate,” meaning that there is a last will and testament that directs distribution and administration of your estate. If you die without a will, your estate will be administered as an “intestate estate.” If you die intestate, without a will, the state, not you and not your family, will decide how your assets will be distributed by means of the Law of Intestate Succession. So, how does this law work? As complicated as the concept may seem, the law is laid out quite simply. If the decedent is survived by a spouse, the amount he or she will receive varies depending on which other relatives of the decedent also survive. The surviving spouse does not necessarily receive the entire estate! The law controlling what portion of the decedent’s estate the surviving spouse receives can be found at 20 Pa.C.S.A. § 2102. It can be summarized as follows:
- No surviving children. If the decedent was survived by his or her spouse and had no surviving children and no surviving parents, the surviving spouse receives the decedent’s entire estate.
However, if the decedent was survived by his or her spouse and one or both parents, but had no surviving children, the surviving spouse would be entitled to the first $30,000.00 of the estate, plus one-half of the remaining estate, if any. The decedent’s parents would receive the other half of the estate. Their individual share is dependent on other factors which are discussed below.
- Surviving children. If the decedent was survived by his or her spouse and had surviving children, all of whom were also the surviving spouse’s children, the surviving spouse will receive the first $30,000.00 of the estate, plus one-half of the remaining estate, if any.
However, if the decedent was survived by his or her spouse and had surviving children, at least one of whom was not also the surviving spouse’s child, the surviving spouse will only receive one-half of the estate. Under these circumstances, the surviving spouse would not be entitled to the first $30,000.00. The reason for the difference in these two scenarios is that the law presumes that the surviving spouse will care and provide for children of his or her own, but does not make the same presumption for children that are not his or hers. Regardless of how the child was treated by the surviving spouse during the decedent’s lifetime, the legislature did not want to take the chance that that child would not be provided for after the decedent’s death. In a time where second marriages and second families are common, having a will is even more important.
What if there is no surviving spouse?
The laws of Intestate Succession can be found at 20 Pa.C.S.A. § 2103, provide for the share of the estate, if any, that is not going to the surviving spouse or which passes if there is no surviving spouse. This section of the statute regulates the passing of the remaining share.
- Children. If there are surviving children, and no surviving spouse, the estate will pass to the children of the decedent.
- Parents. If no children survive the decedent, the decedent’s parents share the estate equally; if only one parent survives, the surviving parent takes the entire estate. Recall that, if the decedent was survived by a spouse, the spouse will take the first $30,000.00 and one-half of the remaining estate. So, in the event there is a surviving parent of the decedent, the surviving spouse will get $30,000.00 plus half the remaining estate and the surviving parent will receive the other one-half of the remaining estate. If both parents survive the decedent, they will share the remaining one-half equally.
- Brother, Sister, or their Children. If no children and no parents survive the decedent, then the estate will be distributed to the children of the decedent’s parents (the decedent’s siblings and their children).
- Grandparents. If no siblings survive the decedent, then the grandparents of the decedent shall receive, one-half to the paternal grandparents and one-half to the maternal grandparents, and their children.
- Uncles, Aunts, and their Children and Grandchildren. If no grandparents survive the decedent, the estate is distributed to the decedent’s uncles, aunts, and their children and grandchildren.
- Commonwealth. If no one mentioned above survives the decedent, then the entire estate passes to the Commonwealth of Pennsylvania.
So, as you can see, not having a will can create significant problems for your family. The administration of the estate also becomes much more complicated and much more expensive if you do not have a will that names an executor. If you want to protect your spouse, or your children, you need to have a will. No estate is “too small” to protect with a will. The cost of preparing a will (as well as other important estate planning documents like a living will or a power of attorney) is not high. Typically, a “simple” will (one that does not contain complicated trust provisions), power of attorney and living will for a husband and wife can be completed for less than $1,500 (sometimes much less). Of course, that is dependent upon the time required to prepare and revise documents. Numerous revisions during the drafting process can potentially increase the cost. If you would like to discuss an estate plan and the costs involved, please feel free to contact us online or call (412) 338-1184.