Laughing Heirs

Poor estate planning (or no planning) can result in unexpected and unintended results. All States have a law similar to O.C.G.A. § 53-2-1(c), idenitfying your heirs when you don’t have a Will, or if your Will doesn’t cover all of your property. Section 53-2-1(c) provides:

(c) Except as provided in subsection (d) of this Code section, when a decedent died without a will, the following rules shall determine such decedent’s heirs:

(1) Upon the death of an individual who is survived by a spouse but not by any child or other descendant, the spouse is the sole heir.  If the decedent is also survived by any child or other descendant, the spouse shall share equally with the children, with the descendants of any deceased child taking that child’s share, per stirpes;  provided, however, that the spouse’s portion shall not be less than a one-third share;

(2) If the decedent is not survived by a spouse, the heirs shall be those relatives, as provided in this Code section, who are in the nearest degree to the decedent in which there is any survivor;

(3) Children of the decedent are in the first degree, and those who survive the decedent shall share the estate equally, with the descendants of any deceased child taking, per stirpes, the share that child would have taken if in life;

(4) Parents of the decedent are in the second degree, and those who survive the decedent shall share the estate equally;

(5) Siblings of the decedent are in the third degree, and those who survive the decedent shall share the estate equally, with the descendants of any deceased sibling taking, per stirpes, the share that sibling would have taken if in life;  provided, however, that, subject to the provisions of paragraph (1) of subsection (f) of Code Section 53-1-20 , if no sibling survives the decedent, the nieces and nephews who survive the decedent shall take the estate in equal shares, with the descendants of any deceased niece or nephew taking, per stirpes, the share that niece or nephew would have taken if in life;

(6) Grandparents of the decedent are in the fourth degree, and those who survive the decedent shall share the estate equally;

(7) Uncles and aunts of the decedent are in the fifth degree, and those who survive the decedent shall share the estate equally, with the children of any deceased uncle or aunt taking, per stirpes, the share that uncle or aunt would have taken if in life;  provided, however, that, subject to the provisions of paragraph (1) of subsection (f) of Code Section 53-1-20 , if no uncle or aunt of the decedent survives the decedent, the first cousins who survive the decedent shall share the estate equally;  and

(8) The more remote degrees of kinship shall be determined by counting the number of steps in the chain from the relative to the closest common ancestor of the relative and decedent and the number of steps in the chain from the common ancestor to the decedent.  The sum of the steps in the two chains shall be the degree of kinship, and the surviving relatives with the lowest sum shall be in the nearest degree and shall share the estate equally.

In Cato v. Sheriff, 2011 NY Slip Op 30775(U) (NY Supreme Court 103966/10, April 1, 2011), the doting nephew of Dorothy Mcintosh lived with her in a building at 31 West 138th Street in New York. Ms. Mcintish left a Will, but her building was not distributed under the Will. George Cato, the nephew, claimed it was his, arguing two theories: first, he argued he adversely possessed the building; second, he argued Ms. Mcintosh orally conveyed the building to him. The executrix of the estate opposed both arguments and, ultimately, Cato lost even though the Court acknowledged the result is that laughing heirs would inherit the building.

Adverse possession, under New York law, required possession that is (1) hostile and under claim of right; (2) actual; (3) open and notorious; (4) exclusive; and (5) continuous for the required period. Cato occupied the building under an agreement and did not have exclusive possession since his aunt lived there with him. So that argument failed. His argument regarding oral transfer also failed because the Statute of Frauds requires that any real estate conveyance be in writing.

A laughing heir is a default heir-at-law who has little or nothing to do with you. Usually it is a distant cousin, niece or nephew you’ve never met (or that you don’t like) who gets your stuff because you failed to plan your estate appropriately. These heirs, who were not expecting anything from your estate laugh all the way to the bank. Garth Brooks had a song about these laughing heirs called “Big Money.”

In Estate of Atkinson, 7 Phila. 106 (12/31/1981), the Court described the laughing heirs in that case as follows:

Most have lost contact with the deceased relative, if indeed they ever knew him or her at all. Virtually all are “laughing heirs” who consider these inheritances windfalls. In the instant case, the Atkinson and Allen families were estranged. Harold Atkinson was alienated from, if not hostile to, his father’s family and his father who deserted him and his mother when he was a youth. Allen was age 9 and Atkinson when they last saw each other in 1914, although Allen lived in the Philadelphia area until 1968. Lillian Allen, Franklin Allen’s widow, a total stranger to decedent and sole heir under Mr. Allen’s will, will now inherit the entire estate.