Roughly one of every five United States households received a transfer of wealth facilitated by the death of a family member or – the second case is far less common than the former instance – friend via inheritance according to a study by the United States Bureau of Labor Statistics conducted from 1989 to 2007.
While everyone wishes they could receive an inheritance of any amount from a family member – or a complete stranger, for that matter – believing an inheritance will come one’s way following the death of a loved one is not sensible. As such, every reasonable member of society places immense value on the potential of being on the receiving end of an end-of-life wealth transfer.
How does an inheritance get passed on to an organization, person, or entity after death?
Legal documents called wills contain plans for distributing assets after all creditors are paid off in full. They contain tons of wisely-worded legalese mumbo-jumbo to make sure estate holders’ belongings are assuredly transferred to whomever or whatever those well-off testators – a legal term for the more commonly-used “benefactor,” or a person who gives cash money and other assets to people, organizations, or governments to help them – wanted to dole them out to.
This post doesn’t cover the steps of having a will made. However, any licensed estate-planning attorney can cover such legal protections to make sure assets are distributed precisely as testators want them to be handed out.
What happens if a will isn’t in place at the time of a prospective benefactor’s death?
In the United States, estates, defined by Investopedia as “everything comprising the net worth of an individual, including all land, possessions, and other assets that the individual owns or has a controlling interest in”, are split into chunks and distributed to heirs after any and all creditors are paid.
Single, childless testators’ estates are given to parents in full if they’re alive. Otherwise, such estates are given to siblings. These testators’ assets are split equally between one’s father’s and mother’s relatives. If they have kids, they are given to those kids and then grandchildren, if applicable.
Married, child-bearing testators’ belongings are distributed in whole to their current spouse. If these benefactors have kids with other spouses, half are distributed to those children, with the other half going to the current spouse.
Lastly, married benefactors’ estates, only if they are made up of “community property”, are given in whole to the recently-made widow or widower. They’re chunked out between parents, kids, and the surviving spouses if they’re “separate property.”