We are going to look at escheat laws in this post. But before we get there, some background information is necessary.
Just 32 percent of American adults have estate plans in place according to a survey that was conducted by Caring.com earlier this year. This is a remarkable lack of preparedness, and it is not confined to younger adults.
You will probably be surprised to hear that just 43 percent of people who are 55 years of age and older have plans in place. If you have family members depending on you, and you are in the unprepared group, you are doing your family a disservice.
Intestacy
If you pass away without a will or a trust, there will be an intestate estate. The probate court will be engaged to provide supervision, and the court will appoint an estate administrator. This will usually be the decedent’s closest relative as long as they are willing and able to assume the role.
In some cases, family members will disagree with regard to the choice of administrator. This may come about if there is a blended family situation, and siblings may have different ideas about the correct way to proceed.
This will complicate a situation that is hazy and potentially contentious by its very nature. There can also be downright animosity when an estate is being administered by a personal representative.
Steve McNair Estate
As a case in point, look no further than the Steve McNair estate debacle. The former NFL quarterback was murdered by a woman with whom he had a romantic relationship in 2009.
He was married at the time of his death, and he did not have a will. His wife, Mechelle was appointed to act as the administrator.
McNair purchased a large home on a big lot for his mother, Lucille, before he passed away. This was her dream home, but in a legal sense, she was not the owner. Steve McNair was listed as the owner of the property, so it was part of his estate.
Apparently, his surviving spouse did not share his affection for Lucille McNair. She started charging her $3,000 a month in rent, and Lucille was unable to pay this amount. As a result, she had to move from the home, but the torment did not stop there.
When she was leaving, she took her belongings along with her, but Mechelle filed a lawsuit. She contended that the property did not actually belong to Lucille.
One would assume that McNair would have been mortified by these actions. If he had worked with an estate planning attorney to put a proper plan in place, his mother would have never been uprooted.
Escheat Laws
When someone dies intestate, relatives will typically step forward making claims to the estate. After the final debts have been paid, the court will order the distribution of the assets under the intestate succession laws of the state (in our case, Arizona).
However, in rare instances, no relatives come forward. Under these circumstances, the estate will make an effort to locate a blood relative. If these efforts fail to bear fruit, the state can assume ownership of the assets under the escheat laws.
Roman Blum Case
As a result, even if you do not have any relatives, you should put a plan in place to bequeath your estate to a friend or a charity. This would be prudent even if you have a modest estate but imagine the situation if you were a multimillionaire.
Back in 2012, Roman Blum passed away in New York. He was a 97-year-old Holocaust survivor, and he was in real estate. Over the course of his career, he was able to accumulate an estate that was valued at $40 million.
He was unmarried, he had no children, and he did not have a will. Immediately after his passing, no relatives stepped forward, and the state started searching. The case was publicized, and a number of people made claims to the estate over the years.
None of them could prove that they were the rightful inheritors, so the state of New York is still in possession of the $40 million estate of Roman Blum.
Don’t Take Chances With Intestacy!
Today is the day for action if you are going through life without a plan. You can schedule a consultation at our Phoenix, AZ estate planning office if you call us at 888-222-1328. There is also a contact form on this site you can fill out to send us a message.
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