One of the questions that inevitably arises when someone dies is the question of what will happen to the property she owned when she was alive. This is especially true when a wealthy person passes away, leaving behind a fortune that would surely change the life of whomever stands to inherit it. Who inherits when someone dies depends on whether the deceased had a last will and testament, as well the deceased's state of residence.
When There's a Will
Many people make a last will and testament before they die. A will gives an individual control over what happens to her money when she dies. In a will, an individual can bequeath individual items of personal property, such as jewelry and art, or bank accounts, real estate, stock and other assets. After her death, the local probate court administers her will, and the executor or personal representative named in the will ensures that her property is distributed according to her wishes.
Without a Will
When someone dies without having a will, the law determines who gets her property. Dying without a will is referred to as dying "intestate." When this is the case, a law called the "order of intestate succession" takes effect. Each state has its own order of succession. In New York, for example, a woman's surviving spouse, if she has one, inherits her entire estate unless she left children or grandchildren. If there are children, the surviving spouse gets $50,000 off the top of the estate plus one-half of whatever is left. If there is no surviving spouse, in New York the deceased's property will go to her children or, if no children survive her, to her parents. If there are no surviving children ore parents, her property goes to her brothers and sisters. If she has none, then her grandparents inherit, or her aunts and uncles, if she has no grandparents. If she has no aunts or uncles, her property goes to her grandparents' grandchildren or great grandchildren. If the deceased has no survivors in the order of succession, the State of New York gets her property.
Paying the Creditors
Before the property of the deceased is distributed, her estate must pay her outstanding debts, including the cost of her burial and the cost of her final illness, if any. Individuals or businesses to which she owed money can file claims against her estate. If their claims are valid, the probate court will pay creditors' claims before it distributes any assets to the heirs or beneficiaries.
Assets such as life insurance and retirement accounts pass on to the beneficiary or beneficiaries that the deceased designated before she died to receive those assets after her death. Assets that pass from a deceased to a designated beneficiary do so separate and apart from the probate process. Similarly, assets such as automobiles or real estate that the deceased held jointly with another person, where both people had a right of survivorship, pass directly to the designated survivor without going through probate.