Unintended Intestacy

Don’t let this happen to you…

I recently met with a client whose husband had passed away. During the course our meeting, the Widow handed me his Last Will and Testament that had been created from a generic form over a decade ago! Unbeknownst to the Widow, neither she nor or her deceased husband had ever completely filled in the dispositive section of Will. Simply, stated while the Will named
executors and guardians, in fact, there were no provisions relative to whom and how the assets of the estate were to pass. As a result, the husband died with a partially intestate estate.

Intestacy or partial intestacy occurs when a person dies without a valid Will or an incomplete Will document. In the absence of bequests or a residuary provision in the Will, the husband’s estate, any assets not otherwise owned jointly, will pass according to the Pennsylvania Intestacy Laws. Of course, this news came as big shock to the Widow. It is not so much that Widow
doesn’t want to share with her children, but that was not the intended plan when she and her husband executed the Wills.

In an effort to possibly save money or thinking “my estate is simple” or “my assets are small” a generic, incomplete form was used by the decedent and a partial intestate estate was created. In this case, since there is surviving spouse, the Widow, and living children, will be heirs in accordance with the Intestacy Laws. Where there may have been no inheritance tax due, now the estate may be paying as little as 4.5% or as much as 15% in inheritance tax to the state. Again, this is an unexpected consequence of a poorly drafted Will document.

The unintended consequence of the partial intestacy is of concern in that the Widow was unaware, there are minor and adult children, so trusts or other minor’s accounts have to be created, and finally, the placement of assets with children who may not otherwise be ready to receive a large
sum of money. In this case, the Widow may be sharing one-half (1/2) of the estate with her children. The issue becomes one of planning. One of the most important services an estate planning attorney offers is that of advice. Take the time to meet with a qualified attorney to be sure your estate plan is up to date and complete so that assets pass the way you intended and not
by way of intestacy.

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