Bob Smith dies. He was unmarried, no siblings, parents are deceased. He didn’t have the foresight to leave a will saying that upon his death all his money should to to ABC Charity or whoever - no instructions were left.
What would happen to all of the late Mr. Smith’s stuff? I assume that the appropriate parties would arrange for his assets to go towards paying any debt he had, but what if he was very financially scrupulous and only left twenty bucks on his Visa? Would his material possessions be sold at (municipal? State?) auction? Would the government just empty his bank account?
Intestacy means that a person has died without a will. Each state has laws dictating how a person’s property will be disposed of in the event there is no will. (For example, the property of a single person with no children will generally go to her parents, while the property of a married person will go to the spouse, etc.). In your example, the mere fact that Smith has no siblings, children or parents doesn’t mean that he has no heirs. The intestacy laws favor relatives, no matter how distant, over escheating to the state, so if Smith has second cousins or grandparents or whatever, they could be in line to take his property.
Escheating means that in the event that there are no heirs, the property will go to the state. From a practical perspective, there are government agencies who step in and handle the estate; deal with creditors, etc. They will also step in if a person dies without a will and no relative wants to handle it.
To prevent the property from escheating, many wills contain a “nuclear” clause – i.e., in the event that everyone I’m related to and everyone I’ve named as getting something under my will dies before me, everything should go to X charity. In law school, we were told that such a clause was the genesis of the Smithsonian museum.
Aha, that’s what I was looking for. Googling ‘no next of kin’ and variants lead to a lot of information about Nigerian scams, but not much else. Thanks.
Actually, they don’t necessarily favor relatives no matter how distant. I believe most states have a cut-off so that excessively distant relatives don’t get a windfall (and to limit the amount of effort required to search for heirs).
In New York, Estates Powers & Trusts Law 4-1.1 provides (if I’m reading it correctly) that an intestate estate will not pass to relatives further than first cousins once removed (i.e. great-grandchildren of grandparents). If you die as New York resident without a will with only second cousins surviving, your estate will escheat to the state.
How do they find these distant relatives? Let’s say I get run over by a bus tomorrow, along with my two in-state relatives. How do they find my parents? And assuming my parents are also slain in coincidental but tragic bus accidents, I have first cousins in Canada. Will the State of California track them down? I strongly suspect that anyone not in the SSN database is out of luck, but I don’t know.
This happened to a distant relative of mine in 1960. It led to a very time-consuming legal process in which the probate court appointed a lawyer to find all the heirs that could be found. Then he had to cut checks to everyone he found according to the laws of the State of Kentucky. The legal fees ate up about half of the estate, and the rest went to the heirs. My dad got 12 cents.
The best part was, it generated many pages of well-documented genealogical information going back to the early 1800s, including all the letters, with names and addresses, the lawyer had to send trying to track down the heirs. As an amateur genealogist I became physically aroused when I ran across this little treasure trove.
At English common law, the estate could potentially go to extremely distant relatives, but this was changed for England & Wales by the monumental reforms of the Law of Property Act, which imposed cut-offs similar to the ones Billdo mentions. I believe that most commonwealth jurisdictions that are based on the English common law have enacted similar reforms.
Dorothy L. Sayers used the 1925 Act as a plot device in Unnatural Death, a Wimsey novel which I heartily recommend.