Will with a deceased beneficiary being read by a beneficiary.

Who inherits if there is no beneficiary?

It happens all the time. 

Someone dies, and while their loved ones have a good sense about who the deceased would've wanted their estate to go to, they don't have either a will or a named beneficiary — at least one that's available to inherit assets. 

Everyone’s left wondering, who inherits if there’s no beneficiary?

Of course, if you’re in the position of administering the estate, it doesn’t feel like something that happens all the time. 

It feels like a pretty big thing that’s happening to you. Right now. 

You’ve just lost someone you care about, and now you’re trying to figure out how to handle an estate when you don’t know who the beneficiary should be.  

The good news is that you won’t be the first person to come before the probate court with this situation. The probate judge will instruct you in how the assets should be distributed in accordance with the law. 

But no one likes to go into a situation without a bit of background knowledge. So we’ve put together some of the basic information that will help you understand how the court might handle your particular case. 

 

Why is there no beneficiary?

The most common reason for there to be no beneficiary is that there’s no will, but there are actually several additional ways you could end up with an estate without beneficiaries. 

  1. The will named a beneficiary, but the beneficiary is deceased. Take this example: Barry named his wife Margaret as his sole beneficiary in his will and on all of his important accounts — his retirement account and life insurance policy. Unfortunately, Margaret had already died by the time Barry passed away. So she could no longer be the beneficiary. 
  2. The will named a beneficiary, but the will is invalid. There are a number of reasons a will could be found invalid. It could be something as simple as the will not being signed or correctly witnessed. Or a court could find that the will is fraudulent or was created under duress. In those instances, the court treats the probate case as if there were no will and thus no named beneficiary. 
  3. An account (such as a retirement account or payable-on-death account) named a beneficiary, but the beneficiary is deceased. Wills are not the only way to transfer assets after someone dies. Life insurance policies, joint tenancies in property, and retirement or bank accounts all have mechanisms to leave assets to a named beneficiary. If the person has died, they can no longer be the beneficiary. 

See: Who Will Inherit if I Die Without a Will?

 

Intestate succession to determine beneficiaries

In almost all cases where there’s no beneficiary, a process called intestate succession takes over.

Each state creates its own intestacy laws (the laws that govern who inherits when there’s no will), but most follow the Uniform Probate Code. These laws attempt to provide for inheritance in the way they assume the average person would do so if a valid will existed. 

Intestate succession inheritance generally flows in this order:

  1. Surviving spouse of deceased
  2. Children of deceased, or the offspring of children 
  3. Parents of deceased
  4. Siblings of deceased
  5. Grandparents of deceased
  6. Aunts and uncles of deceased and other extended family

Under the Uniform Probate Code, the surviving spouse doesn’t necessarily get the full amount of the inheritance. For instance, if the deceased’s parents are still alive but the deceased doesn’t have an offspring, the surviving spouse gets the first $200,000 of the estate and ¾ of anything remaining. The parents get the rest. 

If the deceased has children that are not also the children of the surviving spouse, then the surviving spouse gets the first $150,000 of the estate and ½ of anything remaining. The children get the rest. 

One thing to note is that the first thing that must be paid from an estate are taxes and debts — before any distributions are made to any beneficiaries, whatever the order. 

 

Anti-lapse statutes

Of course, the absence of a will is not exactly the same thing as a will where the sole beneficiary is deceased. In the first instance, the probate court has no idea what the deceased may have wanted. Thus the law of intestate succession takes over. 

In the second instance, the court does know what the deceased intended. They named a beneficiary. But their desire can’t be carried out because the beneficiary has died. 

Some states have addressed this issue by enacting anti-lapse laws. Under these laws, an inheritance passes through the deceased person to their heirs. 

So in the example above, Barry intended to leave his estate to Margaret. The inheritance can’t go to Margaret because she is deceased. In a state with an anti-lapse law, the estate would go to Margaret’s heirs. 

In a state without an anti-lapse law, the estate would go through the priority of intestate succession. Of course, it’s possible the result would be the same. For instance, if Margaret’s heirs are children she had with Barry, they would be next in line for the inheritance in either case. 

 

Probate when there is no beneficiary

Now that you understand how intestate succession works and how an estate might end up without a beneficiary, let’s talk about the probate process. 

Most of the time, when someone dies, their estate must go through probate. That means a probate judge oversees the payment of the deceased’s debts and taxes and the distribution of their assets to their heirs. 

There are instances where probate is not necessary — mainly when the assets are in a trust or the estate meets a small estate exemption. But most estates, whether there’s a will or not, have to go through the probate process. 

Want to understand more? Read all about the probate process. 

See: How Do You Know If Probate is Required?

And the truth is that the process isn’t that different when there’s no named beneficiary. You still have to petition the court to open a probate case. The court still oversees the administration of the estate. You’re just more reliant on state law to determine how assets are distributed — rather than relying primarily on the instructions in a will. 

At EZ-Probate, we’ve dealt with probate cases without a beneficiary. We can help you fill out the correct forms and offer assistance throughout the entire probate process. We have affordable plans so you pay only for what you need. Start your free probate intake form.