Death is not a topic many of us like to dwell on, but planning for the inevitable is essential to ensure that your hard-earned money and assets are distributed according to your wishes. One question that often arises is: what happens if you die without a Will? Specifically, does your money automatically go to the government?
The short answer is no—your money does not automatically go to the government if you die without a Will. However, the distribution of your assets Will depend on the intestacy laws of your state. If you reside in New Jersey, understanding its intestacy laws is crucial.
What Happens if You Die Without a Will in New Jersey?
In legal terms, dying without a Will is known as dying “intestate.” When this happens, New Jersey’s intestacy laws come into play. These laws dictate how your estate Will be divided among your heirs, and the process generally aims to distribute your assets to your closest living relatives.
Here’s a breakdown of how New Jersey’s intestacy laws work:
1. If You Have a Surviving Spouse
The surviving spouse’s share depends on whether you have children or other close relatives:
- No children or parents: If you leave behind only a spouse and no descendants (children, grandchildren, etc.) or parents, your spouse inherits everything.
- With children from your marriage: If all your children are also the children of your surviving spouse, your spouse inherits everything.
- With children from another relationship: If you have children who are not the children of your surviving spouse, your spouse inherits the first 25% of your estate (but not less than $50,000 or more than $200,000.00), plus half of the remaining estate. The rest is divided among your children.
- With parents but no children: If you leave behind a spouse and parents but no children, your spouse inherits the first 25% of your estate (but not less than $50,000 or more than $200,000.00), plus 3/4 of the remaining estate. The rest goes to your parents.
2. If You Don’t Have a Surviving Spouse
If you are not married or your spouse has predeceased you, your assets are distributed as follows:
- To your children, in equal shares.
- If you have no children, to your parents.
- If your parents are deceased, to your siblings.
- If you have no siblings, to your nieces and nephews.
- If none of the above relatives are alive, the estate Will be distributed to more distant relatives.
3. When the Government Steps In
Only if you die without a Will and have no living relatives does your estate “escheat” to the state. In New Jersey, this is an extremely rare occurrence. The state government is considered the last resort for inheritance when absolutely no relatives can be located.
Non-Probate Assets
Not all assets go through probate or are governed by intestacy laws or your Will. Some assets, known as non-probate assets, pass directly to beneficiaries outside the probate process. These include:
- Jointly Owned Property: Assets held in joint tenancy or tenancy by the entirety automatically pass to the surviving owner.
- Beneficiary Designations: Accounts like life insurance policies, retirement accounts (e.g., 401(k) or IRAs), and payable-on-death (POD) or transfer-on-death (TOD) accounts pass directly to the named beneficiaries (assuming you have completed these forms).
- Trust Assets: Property held in a trust is distributed according to the terms of the trust and bypasses probate.
It’s important to keep beneficiary designations up to date and coordinate these with your overall estate plan. Even if you have a Will, these non-probate assets will not be subject to its terms unless the estate is named as a beneficiary.
Why You Should Have a Will
While New Jersey’s intestacy laws are designed to ensure that your estate passes to your family, this may not align with your specific wishes. For example:
- You may want to leave a larger share to a particular family member.
- You might wish to include friends, charities, or other beneficiaries who are not covered under intestacy laws.
- If you have minor children, you can appoint a guardian for them in your Will.
- You can also name an Executor to manage your estate, reducing potential conflict among family members.
Without a Will, the probate process can also be more complicated and time-consuming for your loved ones.
Final Thoughts
To ensure your assets are distributed according to your wishes and to simplify the process for your loved ones, it’s essential to create a Will. Consulting with an estate planning attorney can help you navigate the complexities of New Jersey’s intestacy laws and tailor a plan that fits your unique situation.
While your money generally Will not go to the government if you die without a Will, relying on state laws to determine the fate of your estate leaves much to chance. Taking the time to draft a Will is one of the most thoughtful and impactful gifts you can leave behind for those you care about.