When a spouse passes away, many people wonder if their surviving partner automatically inherits everything. The answer to this question is not always simple. It depends on several factors, such as the couple's state of residence, the existence of a will, and the type of property owned by the deceased.

We’ll explore the inheritance rights of surviving spouses and discuss why a spouse may or may not inherit everything automatically.

Key Takeaways

• Inheritance laws vary by state, and not all states grant surviving spouses an automatic right to inherit everything.

• In community property states, spouses typically own all property acquired during the marriage equally, and the surviving spouse may automatically inherit the deceased spouse's share.

• In states that follow common law property rules, the distribution of assets depends on factors such as whether the deceased spouse had a will and the type of property they owned.

Does a Spouse Automatically Inherit Everything?

One of the primary factors determining whether a surviving spouse automatically inherits everything is the state in which the couple resides. In the United States, there are two main types of property ownership systems: community property and common law. The differences between these two systems can impact how assets are distributed when one spouse passes away.

Community Property States

In community property states, which include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, all property acquired during the marriage is typically considered to be owned equally by both spouses, regardless of who earned the income or whose name is on the title.

This includes:

• Income

• Real estate

• Vehicles

• Other assets obtained while the couple was married

In these states, the surviving spouse generally inherits the deceased spouse's share of the community property automatically unless there is a valid will stating otherwise. 

However, community property states also recognize separate property. This is property owned by one spouse before the marriage or acquired during the marriage through inheritance or gift. Separate property is not subject to the same 50/50 split as community property and does not automatically pass to the surviving spouse upon death.

Common Law States

In common law states, which include all states not listed as community property states, the distribution of assets is more complex. They don’t recognize the concept of community property. Instead, each spouse owns the property they acquire individually during the marriage.

In common law states, the surviving spouse's inheritance rights depend on several factors, such as whether the deceased spouse had a valid will and the type of property they owned.

If the deceased spouse had a valid will, the distribution of their assets is governed by the terms outlined. The will may leave everything to the surviving spouse or divide the assets among multiple beneficiaries, such as children or other family members.

If the deceased spouse did not have a will, the distribution of their assets will be determined by the state's intestacy laws. These laws vary by state but typically prioritize the rights of the surviving spouse and any children of the deceased. In many cases, the surviving spouse will inherit a significant portion of the estate. However, the exact amount depends on the specific state's laws and whether the deceased had children from a previous relationship.

Marital Property vs. Separate Property

It’s important to understand the difference between marital property and separate property.

Marital property refers to assets acquired during the marriage, regardless of which spouse acquired them. 

In community property states, marital property is typically split 50/50 between spouses. 

In common law states, marital property is subject to equitable distribution. The court will divide the property in a way that is deemed fair but not necessarily equal.

Separate property, on the other hand, refers to assets owned by one spouse before the marriage or acquired during the marriage through inheritance or gift. In both community property and common law states, separate property generally remains the property of the individual spouse. It is not subject to division in the event of divorce or death.

It's important for spouses to keep clear records of their separate property to avoid confusion or disputes in the event of divorce or death.

This can include:

• Maintaining separate bank accounts

• Keeping detailed records of inheritance or gifts

• Having prenuptial or postnuptial agreements that clearly define each spouse's separate property

This is where using a service like Trustworthy comes in handy. Trustworthy is a secure digital platform that can help you organize and store important estate planning documents, such as wills, trusts, and beneficiary designations. 

Inheritance Rights When There Is a Will

When a deceased spouse has a valid will, the distribution of their assets is governed by the terms outlined in the will. The person making the will, known as the testator, can choose to leave their entire estate to their surviving spouse, divide it among multiple beneficiaries, or even disinherit certain individuals.

If the will leaves everything to the surviving spouse, the distribution of assets is relatively simple. The surviving spouse will inherit all of the deceased spouse's property and assets, subject to any debts or taxes owed by the estate. 

This can include:

• Real estate

• Personal property

• Bank accounts

• Investments

• Any other assets owned by the deceased spouse

However, if the will divides the assets among multiple beneficiaries, the distribution process is more complicated. The executor is responsible for managing the distribution of assets according to the terms of the will. 

This may involve:

• Liquidating certain assets

• Paying off debts and taxes

• Making sure that each beneficiary receives their designated share of the estate

Even if the will leaves all assets to someone other than the surviving spouse, most states have laws protecting the surviving spouse's right to inherit a certain portion of the estate. These laws, known as "elective share" or "forced share" laws, allow the surviving spouse to claim a percentage of the estate, regardless of what the will says.

Inheritance Rights When There Is No Will

If a deceased spouse did not have a valid will in place at the time of their death, the distribution of their assets is governed by the state's intestacy laws. Intestacy laws are a set of default rules determining how a person's property and assets are distributed if they die without a will.

They vary by state but typically prioritize the rights of the surviving spouse and any children of the deceased. In most states, if the deceased spouse does not have any children or if all of their children are also the children of the surviving spouse, the surviving spouse will inherit the entire estate.

However, if the deceased spouse had children from a previous relationship, the distribution of assets becomes more complicated.

For example, in California, if a married person dies without a will and is survived by a spouse and one child, the spouse inherits all of the community property and one-half of the separate property. The child inherits the remaining half of the separate property. If there are multiple children, the surviving spouse still inherits all of the community property, but the children collectively inherit two-thirds of the separate property, with the remaining one-third going to the surviving spouse.

Intestacy laws provide a default distribution of assets in the absence of a will, but they may not always align with a person's specific wishes or family situation. 

Also, the process can be lengthy and expensive, as the court will need to appoint an administrator to manage the distribution of assets and ensure that all debts and taxes are paid. This can delay the distribution of assets to beneficiaries and may result in a smaller inheritance overall.

Derek Jacques, Estate Planning Attorney and Principal Owner of The Mitten Law Firm in Metro Detroit, explains the process of closing an estate:

"The closing of an estate means that the probate process has ended and has several milestones, including a final accounting, asset distribution, debts and taxes paid, the executor’s final report, the release of the executor, the closing of the case, and discharge of any liabilities.”

Types of Property and Inheritance Rights

The type of property owned by a deceased spouse can significantly impact a surviving spouse's inheritance rights.

Non-Probate Assets

Some types of property, known as non-probate assets, are not subject to the terms of a will or state intestacy laws. These assets typically have a designated beneficiary or are owned jointly with another person. Upon the death of the original owner, they pass directly to the beneficiary or joint owner.

One common example of a non-probate asset is a life insurance policy. If the deceased spouse named someone other than the surviving spouse as the beneficiary of the policy, that person will receive the policy's proceeds directly from the insurance company, regardless of what the will says or what state law dictates. The same principle applies to retirement accounts, such as 401(k)s or IRAs, which also allow the account owner to designate a beneficiary.

Jointly-Owned Property

Another type of property impacting a surviving spouse's inheritance rights is jointly owned property. 

One common form of joint ownership is joint tenancy with the right of survivorship. Under this arrangement, two or more people own a property together in equal shares, and when one owner dies, their share of the property automatically passes to the surviving owner(s). This means the property does not go through the probate process and is not subject to the terms of the deceased owner's will.

Another form of joint ownership is tenancy in common. Under this arrangement, two or more people own a property together, but each owner has a separate and distinct share of the property. When one owner dies, their share of the property does not automatically pass to the surviving owner(s) but instead becomes part of the deceased owner's estate and is subject to the terms of their will or state intestacy laws.

Community Property vs. Separate Property

In states that follow community property laws, property acquired during the marriage is generally considered to be owned equally by both spouses. This means when one spouse dies, the surviving spouse typically inherits the deceased spouse's share of the community property automatically.

However, not all property owned by a married couple is necessarily community property. 

Property that was owned by one spouse before the marriage or that was acquired during the marriage by gift or inheritance is considered separate property. It’s not subject to the same rules as community property.

In some cases, separate property can be "commingled" with community property, making it difficult to distinguish between the two. For example, if one spouse inherits money and then uses that money to purchase a house for the couple, the house may be considered community property even though it was purchased with separate funds.

To avoid confusion and potential disputes, married couples should keep clear records of their separate and community property and consider entering into a prenuptial or postnuptial agreement that clearly defines each spouse's property rights. 

By using Trustworthy to manage your estate planning documents, you can have peace of mind knowing that your important information is secure and easily accessible to those who need it.

Trust Property

Another type of property impacting a surviving spouse's inheritance rights is trust property. 

Trusts can be used for a variety of purposes, including:

• Minimizing estate taxes

• Protecting assets from creditors

• Providing for the needs of minor children or disabled beneficiaries

When a person creates a trust, they can specify how the trust property should be distributed upon their death. These provisions supersede the terms of their will or state intestacy laws.

For example, if a deceased spouse creates a trust naming their children as the beneficiaries, the surviving spouse may not have any legal right to inherit the trust property, even if they are named as the beneficiary in the will.

Frequently Asked Questions

Can a spouse inherit from their deceased partner if they were in the process of getting divorced?

In most states, if a couple is legally married at the time of one spouse's death, the surviving spouse retains their inheritance rights, even if divorce proceedings are underway. However, if the divorce was finalized before the death, the ex-spouse typically loses all inheritance rights. Some states have exceptions if the divorce was not yet finalized but the couple was living separately.

Can a prenuptial agreement impact a surviving spouse's inheritance rights?

Yes, a valid prenuptial agreement can alter the default inheritance rules for spouses. For example, a prenup might specify that certain assets will remain separate property rather than becoming marital property. It could also limit a surviving spouse's right to inherit if the marriage ends in divorce or death. However, prenups must meet certain legal requirements to be enforceable.

What happens if both spouses die simultaneously?

If both spouses die at the same time and it cannot be determined who died first, most states have "simultaneous death" laws that presume each spouse predeceased the other for inheritance purposes. This means that each spouse's share of the assets would pass to their respective heirs rather than to each other. Couples can override this default with proper estate planning.

Can a surviving spouse be disinherited completely?

In most states, it’s difficult to entirely disinherit a surviving spouse. Even if a will attempts to leave them nothing, most states give spouses the right to claim an "elective share" of the estate (often one-third to one-half). However, a spouse can waive their inheritance rights in a valid prenuptial or postnuptial agreement.