Doesn’t My Spouse Automatically Get Everything if I Die Without a Will?
Surprising answer: No.
We are asked this question with some frequency. While there is nuance to the answer, the bottom line is no, your spouse does not automatically get everything if you die without a Will.
It is true that property titled in the names of you and your spouse, if titled correctly, passes automatically to your spouse when you die by operation of law. With bank accounts, investments, vehicles, and other personal property, this is common. But real estate is tricky, as deeds must be titled carefully to ensure what’s called “tenants by the entireties” protection, meaning the surviving spouse takes the deceased spouse’s share of the real estate by operation of law (and during the marriage the property receives special creditor protection). In re Kelly, 316 B.R. 629, 636 (D. Del. 2004). Other special words such as “joint tenants” or “joint tenants with right of survivorship” are possible to create a right of survivorship. The point for today’s article is that an incorrectly titled deed unintentionally could result in “tenants in common,” meaning that if there is no Will, a deceased spouse’s share passes not to the surviving spouse, but instead to the deceased spouse’s heirs at law who may or may not be the surviving spouse. Many people do not know this.
In this article, we are discussing: (1) joint property that does not provide a right of survivorship to the surviving spouse, and (2) individually titled property that does not pass by beneficiary designation, pay-on-death, or transfer-on-death designation to the surviving spouse, examples being: your car, bank account, brokerage account, or CD that are titled in your individual name, even your personal possessions that have no title. Following are the rules that apply to the foregoing assets absent a valid Will.
If you die without a Will or your Will is rejected by the Register of Wills, your estate is considered “intestate” under Delaware law, specifically Title 12 Chapter 5. Your intestate estate is divided among your spouse and other heirs according to Delaware’s laws, not according to your wishes. The results are often surprising. Following is the Delaware statutory law, followed by illustrating examples and some common cures:
Title 12 Decedents’ estates and Fiduciary Relations
CHAPTER 5. Intestate Succession
§ 501. Intestate estate.
Any part of the real or personal estate of a decedent not effectively disposed of by will passes to the decedent’s heirs as prescribed in the following sections of this chapter.
§ 502. Share of spouse.
The intestate share of the surviving spouse is:
(1) If there is no surviving issue or parents of the decedent, the entire intestate estate;
(2) If there is no surviving issue but the decedent is survived by a parent or parents, the first $50,000 of the intestate personal estate, plus one half of the balance of the intestate personal estate, plus a life estate in the intestate real estate;
(3) If there are surviving issue all of whom are issue of the surviving spouse also, the first $50,000 of the intestate personal estate, plus one half of the balance of the intestate personal estate, plus a life estate in the intestate real estate;
(4) If there are surviving issue, one or more of whom are not issue of the surviving spouse, one half of the intestate personal estate, plus a life estate in the intestate real estate.
§ 503. Share of heirs other than surviving spouse.
The part of the intestate estate not passing to the surviving spouse under § 502 of this title, or the entire intestate estate if there is no surviving spouse, passes as follows:
(1) To the issue of the decedent, per stirpes;
(2) If there is no surviving issue, to the decedent’s parent or parents equally;
(3) If there is no surviving issue or parent, to the brothers and sisters and the issue of each deceased brother or sister, per stirpes;
(4) If there is no surviving issue, parent or issue of a parent, then to the next of kin of the decedent, and to the issue of a deceased next of kin, per stirpes;
(5) Any property passing under this section to 2 or more persons passes to such persons as tenants in common.
Hypothetical: You are married. You and your spouse have two adult children. Your mother is living. You have no Will.
Example 1: You die. Under Section 502(3), your spouse does not get everything. Instead, your spouse gets the first $50,000 of your personal estate (meaning your assets other than real estate), plus one half of the balance of the intestate personal estate, plus a life estate in the intestate real estate. A life estate means a right to reside in the real estate, not to own the real estate. Who gets what your spouse does not? Answer: your children, under Section 503(1). This means your children own your interest in the home, but your husband has a right to reside there, and your children and spouse split your personal assets after the first $50,000 is provided to your spouse. A shocking result to many.
Example 2: Same facts as in the Hypothetical, but you and your spouse have no children. Your mother is living. You die. Under Section 502(2), your spouse takes the same as your spouse in Example 1. Who gets what your spouse does not? Answer: your mother, under Section 503(2). An even more shocking result to many.
Example 3: You are married. You and your spouse have no children. You have no living parent. You have no Will. You die. Then and only then, under Section 502(1) does your surviving spouse get the entire intestate estate.
Will. Your Will designates who gets your property when you die.
Revocable Living Trust. This is often the best cure. A Will-substitute, a revocable living trust holds title to your property and passes title on your death outside of probate. It provides for quick, cheap, and easy transfers of property on your death, and is the best strategy for managing incapacity during life. Your revocable living trust can provide that all of your interest in everything you transfer to your trust will pass on your death to your spouse, and provide for what happens to that property should that spouse predecease you.
Jointly owned property (which may reflect your current bank account status), transfer on death, and beneficiary designation, may seem initially appealing as a substitute for a Will or revocable living trust, but they are not. Jointly held property negates any plan in your trust or Will and reduces your control over your property. None of the alternative methods disposes of the home properly and all require the use of a power of attorney. Probate is guaranteed upon the death of the second spouse to die.
Our expertise includes: (1) reviewing your assets by type, amount, and titling, (2) advising you on how best to manage your property in your lifetime if you become incapacitated, (3) advising you on how best to ensure that the people or charities you want, get the property you want, how you want, on your death, including for beneficiaries who may have special needs and/or may be receiving public benefits, and (4) preparing documents for a complete estate plan that covers your property in your life and in death, simply, transparently, and with education to you and your agents.