Inheritance Rights: Everything You Should Know

Most people have a limited knowledge of inheritance rights, whether they are in the process of creating a will to prepare for their own passing, or if a family member is trying to determine what they may inherit after the death of a loved one. In this article, readers will learn why it is important to have a will, how it can be impacted by major life changes, what happens when a person doesn’t have a will, as well as what it means to live in a state that recognizes community property rights.

What if a person doesn’t have a will?

If a person dies without a will, it may be possible to make a claim to their property and other assets by way of the concept of inheritance. For the most part, only a spouse, a registered domestic partner, or a blood relative such as a child or grandchild could potentially make an inheritance claim to a person’s estate, and it would be up to state courts to determine how to distribute a person’s property among those making a valid claim.

Generally, a spouse’s inheritance rights will carry a greater weight before a judge than child or grandchildren’s inheritance rights. It is also a myth that the eldest child of a deceased person has more right to an inheritance than any of the deceased’s other children. 

The Importance of a Will

Although it is possible for a spouse and blood relatives to make a claim to a loved one’s estate not covered by a will, it is far easier for everyone involved if the deceased was prepared and did create a will before their death. By leaving a will, the deceased can ensure their assets and property are divided as they truly wished, with one caveat. That caveat centers around community property rights, which is discussed in detail below. 

What is Community Property?

The special relationship of joint ownership of property between spouses is referred to as community property. In some states, the claim of community property rights can supersede even declarations made in a will. 

Will vs Community Property

People who make a will should be aware that if they live in a state that acknowledges community property rights, their spouse is legally entitled to half of their earnings and property accrued during their marriage. These states include:

  • Idaho.
  • California.
  • Arizona.
  • Texas.
  • Washington.
  • Wisconsin.
  • New Mexico.
  • Nevada.
  • Louisiana.

In other words, upon the death of any person living in the above listed states, their spouse may contest a will that did not specify they receive the full 50% of community property to which they are entitled. Alaska is an opt-in community property state, which simply means spouses may or may not opt to have their property considered as community property.

In all other states, spouses may still contest a will and in general, have the right to claim 30% of their deceased spouse’s property.

In summary, for those living in community property states, it’s important to draw up a will in a manner that will honor a spouse’s community property rights in order to avoid causing conflict.

Ex-Spouses

Although an ex-spouse generally has no legal right to a deceased person’s assets, it is still important to explicitly revoke any previous wills after a divorce is finalized in order to ensure an ex-spouse is removed from a will. A new will should then be drafted, with new instructions on how to distribute any assets and property. 

Inheritance Rights of Children & Grandchildren

Many people might be surprised to learn that if a person does have a will, yet they explicitly leave all of their children out of their will, their children do not automatically have a legal right to inherit anything from them. Unlike the scenario where a person doesn’t have a will, but a judge assumes they would want at least some of their assets to go to their children, a will that specifically excludes all of a person’s children is considered to be a deliberate action made by the parent.

Therefore, if a remarried or single parent definitely wants their children to be given part of their property at the time of their death, they should specify each individual child in their will as a beneficiary of their estate. In the case where a parent is still married to their children’s spouse, the deceased would most likely will their assets to their spouse, then trust their surviving spouse to create a new will that would list all their children as beneficiaries. 

In the rare event a person adopted a child who, due to an oversight, was never included in the parent’s will, most states would recognize the right of the adopted child to receive an inheritance in a manner similar to their siblings already listed in the parent’s will.

Is an inheritance taxable?

Chances are very high that anyone who inherits assets from a benefactor will be charged an inheritance tax on the assets they received. However, how much a recipient pays will vary, and may depend on the state in which they live and their relationship to the deceased, as well as the state in which the deceased resided. In general, a person who receives an inheritance can expect to pay anywhere from 0-18% of the value of the inheritance, depending upon these factors.