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If you leave behind a valid Last Will and Testament when you die, or a trust agreement that distributes your estate, the estate you leave behind will be referred to as a “testate” estate. On the other hand, if you fail to leave behind a Will (or a trust that distributes your estate) the estate you leave behind is referred to as an “intestate” estate. The manner in which your estate is handled after you are gone can be dramatically impacted by whether you leave behind a testate or an intestate estate.
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Probate is the name given to the legal process that follows the death of an individual. Along with inventorying and securing estate assets, probate allows creditors of the estate to file claims and ensures that taxes are paid. Eventually, any remaining estate assets are transferred to beneficiaries and/or heirs of the estate.
Are heirs and beneficiaries the same thing? A beneficiary is a person, entity, or even pet who is specifically named in a Will, trust, life insurance policy, or another legal document to inherit assets after your death. An heir is a person who is legally entitled to inherit from your intestate estate. A beneficiary may also be an heir and vice versa, but they are not interchangeable terms.
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Another way in which testate and intestate estates differ is in who oversees the administration of the estate. An Executor is appointed in a Will. A Trustee is appointed in a trust. Either can oversee the distribution of assets; however, in the absence of a Will or trust (an intestate estate), the court will need to appoint someone to be the Personal Administrator. That person will oversee the probate process.
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Like many states, North Dakota offers small estate alternatives to formal probate for estates that qualify. For example, you may be able to use a small estate affidavit to transfer assets without the need to go through formal probate if the estate assets are valued at less than $50,000 (as of 2023). Dying without a Will does not automatically preclude using a small estate alternative if you are a relative and the estate meets the qualifications.
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No. Certain assets can be distributed without going through probate. Common examples include trust assets, assets owned jointly with rights of survivorship, proceeds of a life insurance policy, and retirement/pension accounts, as long as a beneficiary is designated.
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It depends on exactly who survives you. If you have a spouse but no descendants, your spouse inherits everything. The same applies if you have a spouse and descendants with that spouse as long as the spouse has no other descendants. Your descendants get everything if you did not leave behind a spouse. If you leave behind no parents, spouse, or children, more distant relatives will inherit your estate assets.
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The North Dakota intestate succession laws are intended to pass all assets to legal heirs. As such, a search will be made for more distant heirs (aunts, uncles, cousins) before deciding that you have no legal heirs. If an heir is not located, your estate will escheat to the State of North Dakota, meaning that the State will take possession and ownership of the assets.
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Contact Us
If you have additional question or concerns regarding asset protection planning, contact the experienced North Dakota asset protection planning attorneys at German Law by calling 701-738-0060 to schedule an appointment.