If someone without a Will passes away in Massachusetts, the law states how their property is distributed. When that person is married, but has no children, many people think that all property would pass to their spouse. But that’s not actually what the law says.
Let’s say for example we have a couple named Carrie and John. They own a home together and John owns a home in his own name, worth $500,000 that he rents out. They each have a separate bank account (John’s has $100,000 in it and Carrie’s has $40,000 since she likes to spend money on shoes) and then a joint account that they share. They are each named as beneficiary on the other’s life insurance policies. Their parents are all living.
Then John passes away. What happens to his stuff?
- The property that he holds jointly with Carrie – the joint account and the primary residence – pass to Carrie.
- The accounts that list Carrie as the beneficiary go to Carrie.
- The home he owns in his own name and the bank account in his sole name totaling $600,000? The law says that Carrie is entitled to the first $200,000 of that and 3/4 of the balance ($300,000) and then John’s parents are entitled to the other quarter ($100,000.)
Not only could this deprive Carrie of money that she needs to live on, but if John’s parents have done their own estate plan to minimize taxes or are in a nursing home on MassHealth this unintentional inheritance could interfere with their plans.
Take some time this weekend to review how your property is held and see if it matches your goals and the goals of those who might inadvertently inherit from you.