What does Heir mean?
An heir is the person who is designated to take ownership of a decedent's land, property, real estate, life insurance proceeds, living trust, IRA funds, 401(k) account, stocks, securities, cash or other assets at the time of death. The heir may be determined either through a will, a trust, a designated beneficiary form, or through state law. An heir is determined at the time of death.
Determining the heir without a will
What happens if someone dies without a will? In some cases the beneficiary is determined through a beneficiary designation form. Other assets will be distributed according to intestate succession laws, which vary by state.
If you die without a will the probate court will allocate your assets according to state law, which generally allows for the surviving spouse to receive the property. If there are children they may also receive a share. If the spouse and children are no longer alive the court will distribute the estate to other surviving relatives. Surviving relatives can include the grandchildren of the decedent who may be allowed to inherit their parent's share of the assets.
Why do I need to designate an heir?
Not only does having an estate plan make the distribution of assets less complicated and costly, it can also reduce conflict. Unfortunately, estate litigation is big business and not having an estate plan can increase the chance your heirs will fight for their share of your estate. Estate planning can also help insure your legacy is one of decisiveness and peace rather than confusion and conflict.
Making a will and determining my heirs
Making a will is not complicated. In fact, you may be able to use a standard form which contains all the necessary clauses and simply type in the appropriate names, including the names of the relatives you have chosen to give your property to at the time of your death. Review your state's laws for the proper signing of the will. Most states require the will to be signed by two witnesses.
Not everyone will need legal assistance to create a will, but certain individuals will need to hire a lawyer. For instance, if you have a large estate (over $2 million), if you are not sure your will hold up in court, if you have been remarried, if you own a business, if you do not understand your state's estate laws, or if you need help reducing your taxable estate talk to a lawyer.