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Estate planning

Estate Planning: The spouse doesn’t always get everything

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Earlier this week, a buddy called me to ask a few questions about a relative who had recently passed away.

He asked the usual questions about probate and jointly held assets. I asked about the will and was told that he didn’t have one but that it was OK because “he was married.” The assumption was, as it often is, the spouse will get everything even without a will. That’s when I had to explain the intestate laws and how they work. Unfortunately, the wife wouldn’t receive everything because the decedent had children. My buddy’s response was “Really?”

Yup, unfortunately the surviving spouse rarely receives everything under the intestate laws. This comes as a surprise to a lot of people including my buddy. I hear “that can’t be right” a lot.

This is what the intestate laws provide for when a married person dies without a will and being survived by a spouse and at least one child. One half of the decedent’s probate assets are distributed to the spouse and one half are distributed to the decedent’s child or children. If the surviving spouse is a second or subsequent spouse and did not have any children with the decedent, the surviving spouse takes even less.

Keep in mind that the intestate laws only apply to probate assets. Jointly owned assets will go to the surviving spouse as will assets that list the spouse as beneficiary.

If you are thinking “that’s not what I want to happen,” execute a will. Intestacy literally means dying without a will. If you die leaving a will, you haven’t died intestate and the code provisions don’t apply.

While we are on the subject, let me throw this out there too. If the decedent is survived by a spouse and no living children, the spouse may still not get everything. If at least one of the decedent’s parents are living, they are entitled to a portion of the estate also. Ouch.

Although the Indiana intestate laws don’t seem to be particularly sympathetic to a surviving spouse, they aren’t particularly repressive. However, they lack the kind of nuance that can be had with a little planning. They are a sort of one-size-fits-all-plan that the state came up with. If you don’t leave a will, the state supplies you with one.

If you intend to utilize the intestate laws as your estate plan, know what they say. You can find the intestate distribution provisions online. The particular Indiana Code provision can be found at I.C. 29-1-2-1. Take a look at the code provision but be prepared for a confusing read. Unfortunately, the Indiana Code isn’t known for being clear and concise. After all, most of it was written with the assistance of attorneys.

Christopher W. Yugo is an attorney in Crown Point. Chris’ Estate Planning Article appears online every Sunday at www.nwi.com. Address questions to Chris in care of The Times, 601 W. 45th Ave., Munster, IN 46321 or to Chrisyugolaw@gmail.com. Chris’ information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant, or estate-planning specialist.

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