Testate and intestate are words that make people nervous. They sound fancy and hard to understand, but the ideas conveyed by these words are actually pretty easy. If an estate is testate, it means that the person died with a last will and testament in place. If the person died without a will, their estate is called intestate.
Those are the basics, but here are some other details worth knowing.
There are no two ways around it — testate estates are normally easier for the executor (and the family in general) to deal with. That's because the deceased took some time to write down their last wishes. Many decisions, like who will be the executor of the estate and how the estate will be divided, are already resolved. In fact, if there's a will in place, some or all of the following might already be decided:
- Who is the estate executor
- Funeral plans, potentially including prepaid funeral services or a purchased burial plot
- How the estate will be divided
- Any charitable contributions the deceased wanted to make
- Special bequeathments (such as jewelry or a family portrait)
These sorts of estates typically still need to go through probate, but their probates are often less complicated.
To figure out what kind of probate you need and whether or not you can skip it, go here.
When a will is in place, many of the questions that might arise about how the deceased wanted things split up are already answered. However, just because the deceased wrote something in their will doesn't always mean that's exactly how things will be divided. There are particular obligations the estate needs to meet before divvying up the estate.
Obligations of the Estate
Contrary to popular belief, debts don't go away when someone dies. They still need to be paid. Debts owed are paid out by the estate before anything is given to the people named in the will. This is one of the primary duties of the estate executor, and this money is typically paid out of an estate account. Depending on how many debts the deceased owed, this might mean that there's very little (or nothing) left over in the estate.
If the estate runs out of money, normally there's no further obligation to pay the debts. This varies from state to state and situation to situation, though, so it's always best to consult a lawyer if you find yourself in this situation. Some of the more common reasons that a survivor is required to pay the debt:
- It was a joint account between the deceased and the survivor
- It's a co-signed loan between the deceased and the survivor
- Sometimes, depending on the state, if you're a spouse of the deceased (once again, check with a lawyer in this situation to figure out your personal situation.
Am I Entitled to Inherit?
Possibly, depending on your relationship to the deceased. Surviving spouses might jointly hold assets, like property or vehicles. In other cases (depending on state laws), some or all of the deceased's assets might transfer to the spouse. These are known as marital assets.
Useful context: Difference Between Probate and Non-Probate Assets
However, adult children and other relatives are not automatically entitled to anything in the estate. Inheritances will be spelled out in the will. It is possible that one or more relatives might be left out of the will entirely (disinherited). However, since most states have laws to protect against accidental disinheritance, it may be better to spell out the disinheritance rather than leaving the person out entirely.
One important thing to remember: even if you have a joint bank account with a deceased spouse, do not move large amounts of money around without consulting a lawyer. This can cause more issues than it solves, and you might be required to repay that money at a later time.
What If Assets Were Transferred While the Person Was Still Alive?
This is another situation that can get messy really quickly. If the court determines that the deceased gave away a large amount of the estate prior to their death in order to avoid paying their debts, the court can require that those assets be returned to the estate. This is a form of tax and creditor evasion. If you're planning your own estate and want to provide a large gift to someone, consult with your lawyer prior to doing it.
What If There's Not Enough Money to Cover All the Bequeathments?
It's sometimes the case that the deceased has promised more money in their will than they actually have at the time of death. When this happens, the courts look at the percentages of the bequeathments in the will. For example, the will states that $400,000 is bequeathed, but only $100,000 is left after all debts are paid. If the will stated a survivor should receive $200,000 (half of the estate), the court might rule that the person will receive half of the actual estate, or $50,000.
I'm about to make a statement that sounds foolish, but is true: most people don't ever plan to die. Which means that many people don't make a plan. You might be reading this because someone close to you passed away without an estate plan.
That's okay. Estimates show that more Americans die without wills than die with them.
Lacking a will just means things will be a bit more complicated. Just like if the estate was testate, you'll need to go through a probate process, where an executor will be named. The executor is the person who is in charge of making sure that all debts get paid and all assets are given to the appropriate people.
For a skyscraper view of the probate process so you know what you’re getting into, check our our Beginner's Guide to Probate.
Naming the Executor
Since intestate accounts don't have a named executor, the way testate ones do, this is one of the first areas where conflict or confusion can arise. As long as that person is agreeable, the court will appoint the executorship to the person it thinks is most qualified (usually a family member of the deceased).
Estate Obligations Without a Will
Estate obligations to pay debts are the same whether a will exists or not. Before anyone inherits, the deceased's debts must be paid.
Am I Entitled to Inherit?
Any marital assets (as mentioned above) will go to the deceased's spouse. Each state has specific laws about whether (and how much) adult children inherit in the case of intestacy.
If you're not related to the deceased by blood or law (marriage, adoption, etc.) you are unlikely to receive anything from an intestate estate.
The court might require that what remains after debts are paid and the remaining spouse has received their portion be split equally among the deceased's children or children and grandchildren. There are very few options for "disinheriting" an adult child at this point, except under very specific circumstances (for example, if the adult child had contributed to the death of the deceased).
Our next of kin article has more on those nuances.
And whether a will exists or not, settling an estate is a long and intimidating process. Your family attorney may be able to help, but even with a lawyer it’s useful to stay organized and know exactly what you’re responsible for. That’s part of what Atticus does, along with giving you an easy way to catalog estate assets and all the right forms you need based on state and county. Plus the executor can write it off as an estate expense — check it out.