Does My Money Go to the Government if I Die With No Will?

Does My Money Go to the Government if I Die With No Will?

by | Jan 22, 2025 | Estate Administration, Estate Planning, Intestate Estate (No Will), Last Will and Testament, Probate

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.

Why it’s Important to Have a Last Will and Testament

Why it’s Important to Have a Last Will and Testament

by | Jan 13, 2025 | Estate Administration, Estate Planning, Intestate Estate (No Will), Last Will and Testament, Probate

A last will and testament is one of the most important legal documents you can prepare in your lifetime. It ensures that your assets are distributed according to your wishes and provides clarity and peace of mind to your loved ones after you are gone. In New Jersey, the absence of a Will can lead to a host of complications, from family disputes to lengthy probate proceedings. Here’s why having a Will is essential and how you can create one tailored to New Jersey’s legal requirements.

  1. Control Over Asset Distribution: Without a Will, New Jersey’s intestacy laws dictate how your property will be distributed. This may not align with your personal wishes, especially if you want to provide for specific family members, friends, or charities.
  2. Protection for Minor Children: A Will allows you to name guardians for minor children, ensuring they are cared for by someone you trust. It also enables you to provide financial support for their upbringing.
  3. Avoiding Family Conflicts: Clearly outlining your wishes helps minimize misunderstandings and disputes among heirs, reducing the emotional strain on your loved ones during an already difficult time.
  4. Efficient Probate Process: A well-drafted Will can streamline the probate process, saving time and reducing administrative costs.

How to Create a Last Will and Testament in New Jersey

Creating a valid Will in New Jersey involves specific steps to ensure its enforceability. Here’s a step-by-step guide:

  1. Determine Your Assets and Beneficiaries:
    • Make a comprehensive list of your assets, including real estate, bank accounts, investments, personal property, and digital assets.
    • Identify the individuals or organizations you wish to inherit your property.
  2. Choose an Executor and Trustee:
    • The Executor is the person you designate to manage your estate. Choose a trusted individual to manage your estate and ensure your wishes are carried out. This person will handle tasks like paying debts, filing taxes, and distributing assets. It is recommended that you also choose at least one alternate executor.
    • The Trustee is the person you designate to manage any funds that are to be held in trust – usually for the benefit of a minor or a person incapable of managing their own affairs. You should also choose a trusted individual and it is also recommended that you choose at least one alternate.
  3. Choose Guardians for Minor Children:
    • If you have children under 18, name guardians to care for them in the event of your death.
  4. Draft Your Will:
    • Working with a qualified attorney ensures compliance with New Jersey laws and reduces the likelihood of challenges. It is not recommended that you use an online template or prepare a holographic (handwritten) Will.
  5. Sign and Witness the Will:
    • In New Jersey, you want to have a “self-proving” Will, which is one that is properly witnessed and notarized. This minimizes the time and cost of probate.
    • The Will must be signed by you in the presence of two witnesses who also sign the document. These witnesses should not be beneficiaries to avoid conflicts of interest.
    • The Will must also be notarized, either by your attorney or a notary.
  6. Store the Will Safely:
    • Keep the original document in a secure location, such as a fireproof safe, and inform your executor of its location.
  7. Avoid keeping the Will in a bank safe deposit box because that may be difficult for your Executor to gain access to after you pass away.

Updating Your Will

Life circumstances change, and your Will should reflect those changes. Review and update your Will after major life events, such as:

  • Marriage or divorce
  • Birth or adoption of a child
  • Significant changes in assets
  • Death of a beneficiary or Executor

What Happens Without a Will in New Jersey?

If you die without a Will, your estate is distributed according to New Jersey’s intestacy laws. Typically, this means:

  • Your spouse and/or children will inherit your assets, with specific proportions depending on the family structure.
  • If you have no close relatives, your property may go to distant relatives or even revert to the state.

This process can lead to outcomes you may not have intended and cause unnecessary stress for your family.

Final Thoughts

A Last Will and Testament is more than a legal document; it’s a way to care for your loved ones and leave a lasting legacy. In New Jersey, creating a Will is a straightforward process, but it’s crucial to follow the state’s requirements to ensure its validity. Whether you are drafting your first Will or revising an existing one, taking this step is an act of responsibility and compassion.

If you are unsure where to start, consider consulting an estate planning attorney in New Jersey to guide you through the process. Your loved ones will thank you.