It is a common misconception that if a resident of North Carolina dies without a Will, the resident’s assets will be taken by the State of North Carolina. While there IS such a thing as the State taking unclaimed assets from a deceased person’s estate (“escheat”), it rarely ever happens.
Intestate vs. Testate in NC
Individuals who die with a valid Last Will and Testament are said to have died “testate,” meaning that they affirmatively described who should benefit from their estate assets. On the other hand, individuals who died without a valid Last Will and Testament are said to have died “intestate,” meaning that they have NOT affirmatively described who should benefit from their estate assets. That being said, an individual can die partially testate and partially intestate. For example, let’s say that Betty, a widow, dies owning a house, a car, and a two (2) bank accounts. If Betty leaves a Last Will and Testament that gives her house to her daughter and her bank accounts to her son, but says nothing about who gets her car, then she will have died “intestate” with respect to the car.
North Carolina Intestacy Law
If you die intestate or partially intestate, making no clear decision as to should receive such assets, the State of North Carolina steps in to make that decision for you. Generally speaking, if you are a resident of North Carolina at the time of your death, state law directs that any and all such assets which have no clear beneficiaries (including your personal property and real estate located in North Carolina) shall be given to your family members. These family members are referred to as your “heirs at law.”
Heirs at Law
Your heirs at law cannot be determined until you are dead. However, for the purposes of this example, let’s pretend that you have just passed away suddenly. In order to determine your heirs at law, you would need to draw a family tree, including your grandparents, aunts and uncles, parents, brothers and sisters, your spouse, children, and any grandchildren or great grandchildren that you may have, who are still living. Please include both biological and adopted family members, as state law treats them similarly. With this family tree in front of you, you will find it easier to read NC state law about heirs, found here: http://www.ncleg.net/EnactedLegislation/Statutes/HTML/ByArticle/Chapter_29/Article_2.html.
When does the State of North Carolina Take your Property?
If after reading the state law, applying it to your own family tree, you do not have ANY heirs at law (meaning that you do not have any living grandparents, aunts and uncles, parents, brothers and sisters, spouse, children, grandchildren or great-grandchildren), then and only then will your property escheat to the State of North Carolina. If you are one of the rare few who have no heirs at law, it is extremely important that you have a Last Will and Testament upon your death, naming beneficiaries that YOU choose. As your family tree changes and as your wishes change, NC Estate Planning attorneys at Coltrane, Grubbs & Orenstein are with you, every step of the way.