When an estate plan works as intended, all the decedent’s estate assets are legally transferred to the intended beneficiaries and/or legal heirs of the estate at the end of the probate process. Sometimes, however, assets remain unclaimed at the conclusion of probate. The Grand Forks estate planning attorneys at German Law explain what happens to an unclaimed inheritance in North Dakota.
Understanding the Legal Process that Follows a Death
Before discussing what happens to an unclaimed inheritance, it helps to understand the legal process that follows a death. When someone dies, that individual leaves behind an estate made up of tangible and intangible assets owned by the decedent at the time of death. To ensure that those assets are transferred correctly, the decedent’s estate goes through the legal process known as “probate.” If the decedent left behind a Will, the terms of that Will are used to determine what happens to the assets included in the Will. Anyone who inherits through a Will is referred to as a “beneficiary.” If the decedent died without a Will, the decedent is said to have died “intestate.” Assets left out of a Will are also considered intestate assets. Intestate assets are distributed according to the state’s intestate succession laws and anyone who inherits intestate assets is referred to as an “heir.”
Why Might an Inheritance Not Be Claimed?
There are two ways in which assets can end up unclaimed. The first is when a beneficiary or heir to the estate has been identified but cannot be located or fails to claim the inheritance. The second way occurs when no beneficiaries/heirs exist in which case assets “escheat” to the state.
During the probate process, beneficiaries and/or heirs are identified and notified that the estate is being probated and that they are potentially entitled to an inheritance. The beneficiary/heir must then follow proper procedures to claim the inheritance or to disclaim the inheritance if they do not want it for any reason. If a beneficiary predeceased the decedent, a properly drafted Will should make it clear who inherits the beneficiary’s share of the estate. Likewise, if close family heirs do not exist, the state intestate laws dictate that the inheritance be passed on to more distant relatives. In short, probate laws are designed with the goal of passing on all a decedent’s assets to someone related to the decedent if a Will fails to distribute all assets.
Unclaimed Assets in North Dakota
If all efforts have failed to identify, locate, and distribute estate assets to an heir of the decedent, those assets will escheat to the State of North Dakota. State laws compel financial institutions and holders of property to report unclaimed assets to the state when those assets go unclaimed for the applicable statutory time period. The time frame is typically two or three years, depending on the type of asset.
If you believe you may be entitled to an unclaimed inheritance, you can easily search the North Dakota “Unclaimed Property” website. You can also check for an unclaimed inheritance in another state by navigating to the National Association of Unclaimed Property Administrators website where you will find information and links to searchable databases in all 50 states.
Contact a Grand Forks Estate Planning Attorney
Please join us for an upcoming FREE seminar. If you have additional questions about an unclaimed inheritance or the probate process in North Dakota, contact a Grand Forks estate planning attorney at German Law by calling 701-738-0060 to schedule an appointment.
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