Transfer of Personal Property

The reality is that every person has an estate plan whether they have taken any action or not.  Every state in the union has laws called “intestacy laws” that govern the transfer of a person's property upon death. In the absence of a will or any other valid transfer device, intestacy laws are implemented. While these laws are effective, they are slow, expensive and unlikely to bear any resemblance to what the deceased would have wanted. In a survey reported in the September 2005 issue of Registered Rep Magazine of people with liquid assets exceeding $1 million, two thirds said they have an estate plan of some kind. Only 11% said that it was current, 35% said it was three to five years old and nearly 40% said it was six to ten years old. Considering the incredible number of changes in the estate and tax laws, most experts would agree these plans are dangerously out of date.

The first observation of this survey is that perhaps one third of the participants, even though they have assets in excess of $1 million, do not have a personal estate plan. The second observation is that, based on this survey, it is fair to assume that most people's current plans would not help them to achieve what is truly most important to them. This confirms my personal observation from reviewing many estate plans that most people take a once-and-done approach that ignores many important issues that may arise during their lifetime.

Basic Distribution under Intestacy Law

Basic Distribution under Intestacy Law in the State of Ohio (http://codes.ohio.gov/orc/2105.06)

When a person dies intestate having title or right to any personal property, or to any real estate or inheritance, in this state, the personal property shall be distributed, and the real estate or inheritance shall descend and pass in parcenary, except as otherwise provided by law, in the following course:

(A) If there is no surviving spouse, to the children of the intestate or their lineal descendants, per stirpes;

(B) If there is a spouse and one or more children of the decedent or their lineal descendants surviving, and all of the decedent’s children who survive or have lineal descendants surviving also are children of the surviving spouse, then the whole to the surviving spouse;

(C) If there is a spouse and one child of the decedent or the child’s lineal descendants surviving and the surviving spouse is not the natural or adoptive parent of the decedent’s child, the first twenty thousand dollars plus one-half of the balance of the intestate estate to the spouse and the remainder to the child or the child’s lineal descendants, per stirpes;

(D) If there is a spouse and more than one child or their lineal descendants surviving, the first sixty thousand dollars if the spouse is the natural or adoptive parent of one, but not all, of the children, or the first twenty thousand dollars if the spouse is the natural or adoptive parent of none of the children, plus one-third of the balance of the intestate estate to the
spouse and the remainder to the children equally, or to the lineal descendants of any deceased child, per stirpes;

(E) If there are no children or their lineal descendants, then the whole to the surviving spouse; (F) If there is no spouse and no children or their lineal descendants, to the parents of the intestate equally, or to the surviving parent;

(G) If there is no spouse, no children or their lineal descendants, and no parent surviving, to the brothers and sisters, whether of the whole or of the half blood of the intestate, or their lineal descendants, per stirpes;

(H) If there are no brothers or sisters or their lineal descendants, one-half to the paternal grandparents of the intestate equally, or to the survivor of them, and one-half to the maternal grandparents of the intestate equally, or to the survivor of them;

(I) If there is no paternal grandparent or no maternal grandparent, one-half to the lineal descendants of the deceased grandparents, per stirpes; if there are no such lineal descendants, then to the surviving grandparents or their lineal descendants, per stirpes; if there are no surviving grandparents or their lineal descendants, then to the next of kin of the intestate, provided
there shall be no representation among such next of kin;

(J) If there are no next of kin, to stepchildren or their lineal descendants, per stirpes;

(K) If there are no stepchildren or their lineal descendants, escheat to the state.