One of the primary reasons why every adult should have at least a basic estate plan in place is to avoid leaving behind an intestate estate in the event of death. Even executing just a simple Last Will and Testament prevents the State from determining how your assets are distributed after you are gone. To better understand why you do not want to leave behind an intestate estate it helps to have a clear understating of the North Dakota rules of intestacy.
Your Probate Estate
The first thing you need to understand is what is included in your intestate estate. A decedent’s estate includes all assets, tangible and intangible, that the decedent owned, or in which the decedent had an ownership interest, at the time of death. Not all of those assets, however, may be probate assets. Assets are categorized as probate or non-probate assets and only probate assets are required to go through the probate process. Non-probate assets bypass probate and can be distributed to the intended beneficiaries and/or legal heirs right away. Common examples of non-probate assets include:
- Assets held in a trust
- Proceeds of a life insurance policy
- Certain types of jointly held property
- Assets held in accounts designated as “Payable on Death (POD)” or “Transfer on Death (TOD)”
- Funds held in certain retirement or pension accounts
North Dakota Rules of Intestacy
If you die without leaving behind a Last Will and Testament, your probate assets will be distributed using the North Dakota intestate succession laws. Exactly who inherits from your estate, and the amount or percentage that they inherit, depends on which family members survive you, as follows:
- Children but no spouse – children inherit the entire estate.
- Spouse but no descendants or parents– spouse inherits the entire estate.
- Spouse and descendants from you and that spouse, and the spouse has no other descendants – spouse inherits everything.
- Spouse and descendants from you and that spouse, and the spouse has descendants from another relationship — spouse inherits the first $225,000 of your intestate property, plus 1/2 of the balance and your descendants inherit the remaining estate.
- Spouse and descendants from you and someone other than that spouse — spouse inherits the first $150,000 of your intestate property, plus 1/2 of the balance and your descendants inherit the remaining estate.
- Spouse and parents — spouse inherits the first $300,000 of your intestate property, plus 3/4 of the balance and parents inherit the remaining estate.
- Parents but no spouse or descendants – parents inherit everything
- Siblings but no spouse, descendants, or parents – siblings inherit everything
Special Circumstances for Children
You might think that the term “children” is easy enough to define; however, it can actually be more complicated than you may realize. In the 21st century, there are a number of different ways in which the term “child” could be defined. Consequently, the rules of intestacy attempt to make it clear when a “child” inherits from your estate and when they do not, as follows:
- Adopted children – if legally adopted will receive an intestate share, just as your biological children do.
- Step-children – will not inherit automatically.
- Posthumous children – a child conceived by you but not born before your death will receive a share if they survive at least 120 hours after birth.
- Children born outside of marriage — will receive a share of your estate if you acknowledged your paternity or if your paternity is otherwise proved under North Dakota law.
- Children born during your marriage — any child born to your wife during your marriage is assumed to be your child and will receive a share of your estate.
- Children conceived by assisted reproduction — if you are the husband or partner of the child’s birth mother and you clearly functioned or intended to function as the child’s other parent, the child will usually receive a share of your estate.
- Children born to gestational carrier — if you have a child that was born to a gestational carrier, that child will receive a share of your estate if your parent-child relationship was established by court order or you clearly functioned or intended to function as the child’s parent, as proved under North Dakota law.
Contact a North Dakota Estate Planning Attorney
Please join us for an upcoming FREE seminar. If you have additional questions or concerns about the North Carolina intestate succession laws, contact a North Dakota estate planning attorney at German Law by calling 701-738-0060 to schedule an appointment.