What Happens to Your Property If You Do Not Have a Last Will and Testament or a Trust
SUMMARY
This article provides basic information regarding your property when you die without a proper estate plan in place.
BACKGROUND
There is often confusion and mis-information regarding what happens to your property when you die and you have not executed a Last Will and Testament or placed your property in a Trust. In this article we will explain some of the basics regarding what property the court will distribute and to whom. This area of law is intricate with several "moving parts." Therefore, this article is not meant to be a comprehensive review but instead hopes to answer some common questions and provide the reader with basic information and terminology. Additionally, this article does not cover the American Indian Probate Reform Act and the requirements regarding certain Native Americans.
IMPLICATIONS
What constitutes your estate. First, let us talk about what constitutes your "estate." Your estate is all of the property you own when you die that is not titled in a way that provides for an automatic change in ownership upon your death. As a general rule, all property in your estate must be either probated (if you have a will) or administered (if you do not have a will) before the proper Oklahoma court.
Examples of estate property are your personal property, any vehicle titled in your name only, and bank accounts that are not held jointly or do not have a payable on death order. Also, part of your estate property is any real property (house, land, minerals, etc.) titled in your name that is not titled with another person as joint tenants, or in your name as a life estate only, or is titled in your name and does not have a Transfer on Death Deed filed.
Examples of property that are not in your estate are jointly held bank accounts, bank accounts with a payable on death order, life insurance with a proper beneficiary named, retirement and investment accounts with a proper beneficiary named, any property held by a trust, a life estate interest in real property, or real property where there has been a Transfer on Death Deed filed and the beneficiary has timely accepted the property.
Testate vs Intestate. Once it is determined that you have an estate that needs to be administered or probated, the next determination is whether you died "testate" or "intestate." If you die with a properly executed will, and that will is admitted to the court, you will be determined to have died “testate” and your property will likely be distributed according to your will. However, if you do not have a will or if your will was not properly executed, you will be determined to have died “intestate”. The method to determine how your property is distributed is determined by the Oklahoma law known as "descent and distribution." This law appears as Title 84, Section 213 of the Oklahoma Statutes.
Property acquired during coverture. The descent and distribution law makes a distinction between property that was "acquired by joint industry of the husband and wife during coverture" and property that was not. Generally, property acquired during coverture is property that was purchased during a marriage using money earned during the marriage. This can include vehicles, the marital home, and other items purchased during the marriage. Property not acquired during coverture can include property owned before the marriage, inheritance, and gifts to one spouse.
Descent and Distribution. There are two parts to the descent and distribution law. The first part is for those who died prior to July 1, 1985, and the second is for those who died on or after July 1, 1985. For the purposes of this article, we will discuss only the second part. How your estate is divided is dependent upon many factors which can include whether you are married and if so, whether you had a martial agreement, which relatives survive you, and whether your property was acquired during coverture. There are other statutes that can affect distribution as well such as the "slayer" statute and the "half-blood" statute.
So, what does all of this mean? A common misconception we hear is "I don't need a will because all of my property will go to my spouse anyway." Here are some common examples that we have handled in our practice to show how your estate could be distributed, and almost none of them allow for your spouse to receive all of the property in your estate.
At the time of her death, Mary was married and was survived by her husband John and their two children, Mike and Angela. All of the property in Mary's estate was purchased by John and her and was in each of their names.
Mary's share of the property will go 1/2 to John, and 1/4 each to Mike and Angela.
At the time of her death, Mary was married and was survived by her husband John, their son Mike, and her daughter Angela from a previous marriage. All of the property in Mary's estate was purchased by John and her and was in each of their names.
Mary's share of the property will go 1/2 to John, and 1/4 each to Mike and Angela.
At the time of her death, Mary was married and was survived by her husband John, their son Mike, and her daughter Angela from a previous marriage. All of the property in Mary's estate was purchased by her and John and was in each of their names, except for a mineral interest that Mary inherited from her father.
Mary's mineral interest will go 1/3 each to John, Mike, and Angela. Because this is not coverture property, John and all of Mary's children with get equal shares.
Mary's share of the rest of the property will go 1/2 to John, and 1/4 each to Mike and Angela.
At the time of her death, Mary was married and was survived by her husband John and their son Mike. Their daughter Angela died before Mary. Angela was survived by her husband Sal and one child Jenny. All of the property in Mary's estate was purchased by John and her and was in each of their names.
Mary's share of the property will go 1/2 to John, and 1/4 each to Mike and Jenny. Because Angela died before her mother, her daughter Jenny takes the place of her mother and becomes Mary's heir. Therefore, she inherits Angela's share of the estate.
At the time of her death, Mary was married and was survived by her husband John and their children, Mike and Angela. Angela died after Mary, but before the administration of Mary's estate. Angela did not have a will either. Angela's estate was administered and her heirs were her husband Sal and her daughter Jenny. All of the property in Mary's estate was purchased by her and John and was in each of their names.
Mary's share of the property will go 1/2 to John, 1/4 to Mike, and 1/8 each to Sal and Jenny. Because Angela died after her mother, her husband Sal and her daughter Jenny each get 1/2 of the 1/4 share that would have gone to Angela.
At the time of her death, Mary was married, had no children, and was survived by her husband John and her sister Jane. The only property in her estate is a mineral interest that Mary inherited from her father.
Mary's share of the property will go 1/3 to John and 2/3 to Jane.
At the time of her death, Mary was married, had no children, and was survived by her husband John and her sister Jane. All of the property in Mary's estate was purchased by her and John and was in each of their names.
Mary's share of the property will go 100% to John.
CONCLUSION
It would be virtually impossible to go through every conceivable example when it comes to determining how an estate will be distributed without a will. There are countless variations when considering whether the property was coverture property, what family members survived the decedent, what family members died before the decedent, who are full-blood family members, and who are half-blood family members. If you would like to be the one in control of what happens to your property at your death, an estate plan is vital. The attorneys at Munson & McMillin can help you with setting up a proper estate plan.
ABOUT MUNSON & MCMILLIN
Founded in 2007, Munson & McMillin, PC, is a mid-sized law firm with offices in Edmond and Tulsa, Oklahoma with a focus on the areas of estate planning, oil and gas title and litigation, construction defects and contract dispute, lien and lien foreclosure, surface title examination, cannabis law, and business litigation.
CONTACTING MUNSON & MCMILLIN
This publication is provided by Munson & McMillin. The information contained in this publication is not legal advice and should not be construed as such. Questions regarding the matters discussed in this publication may be directed to Rhonda McLean, or any other Munson & McMillin lawyer with whom you have consulted in the past on similar matters. Ms. McLean can be reached at 405-513-7707 or rmclean@munsonmcmillin.com.