Some people are concerned that the state government always takes a portion or even all of a deceased person’s property when there isn’t a valid will. Although the state may receive a portion of the intestate estate, this only occurs when there aren’t any qualified living heirs according to the appropriate state’s laws.
Determining Ownership
Every state has laws designed to ensure that all property has a legal owner following the most recent owner’s death.
Most of these laws are related to the deceased’s formally expressed wishes, such as post-death transfer by will, trust, or joint ownership. These are the preferred instructions and, when otherwise valid, will always be used to determine who will own the deceased’s property.
In the absence of such instructions, each state also has laws that establish a system for determining who will become the owner of this intestate property. All intestate laws define circumstances under which the property will be given to the state government, but are mainly focused on the deceased’s relatives when trying to determine who receives the property.
Escheat
Property that is given to the government because it does not have a legal owner is said to escheat. Fortunately, the escheatment of property is always the ‘last resort’ of each state’s intestate laws. There must be an absence of every living relation who may qualify as the deceased’s heir before any property is given to the state.
Final Qualified Heir
The intestate laws of every American state are different, meaning that the likelihood of escheatment differs with each state. A minority of states, just eighteen, will try to find any living relation before allowing the property to escheat.
Thirty-two states define a final level of relation that is qualified to take the intestate property, without which, all intestate property is given to the state. (Alabama, Alaska, Arizona, Arkansas, Colorado, Florida, Hawaii, Idaho, Indiana, Iowa, Kansas, Maine, Maryland, Michigan, Missouri, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Washington, West Virginia, Washington D.C., and Wyoming)
Among these thirty-two states, the last level of relation that may qualify as an heir also differs. For instance, the fourth degree of relation, as determined through the grandparents, is the last level that may qualify as an heir according to New Hampshire’s intestate laws. This means that the intestate property will escheat if the deceased does not have any relations closer than a first cousin, even though there may be living relations as close as a first cousin once-removed, great aunt, or second cousin.
An even greater minority of states, just twelve (Arkansas, California, Florida, Kansas, Kentucky, Missouri, Nevada, New Mexico, North Dakota, Rhode Island, Utah, Virginia), look to the heirs of the deceased’s most recent spouse before allowing the intestate property to escheat.
Determining Escheatment In Each State
To learn when intestate property will escheat in any given state, simply open each state’s Intestacy Evaluator™ and answer each question as though there aren’t any living relations. When you have reached the question pertaining to the final level of relation that qualifies as an heir, the Intestacy Evaluator™ will automatically provide an answer that indicates the estate will escheat.
Avoiding Escheat
Creating a legally valid will is the easiest and most effective method of ensuring that all property has a legally designated owner at the time of death.