When a person dies without a valid will, intestate succession laws dictate who inherits their estate and how this is divided up among interested parties. These statutes provide a default plan based on family relationships rather than personal preferences. While the court will by default follow the statutory scheme, the law does allow intestate heirs to agree among themselves to a different distribution of the estate through what is known as a family settlement agreement. This flexibility recognizes that families may have unique circumstances or shared goals that are not reflected in the default rules.
What Is a Family Settlement Agreement?
A family settlement agreement is a written contract in which intestate heirs agree to distribute
estate assets in a manner different from what the intestacy laws would otherwise require. These agreements are commonly used to resolve disagreements, avoid prolonged litigation, or honor family understandings that were never formally documented. By providing a structured and cooperative solution, a family settlement agreement allows heirs to reach an outcome that better reflects their shared intentions while keeping the probate process moving forward.
To be valid and enforceable, the agreement must clearly identify all heirs and describe their respective legal interests in the estate. It should also set out the revised distribution in precise and unambiguous terms so there is no confusion about each person’s rights and obligations. Participation must be voluntary and based on informed consent, free from pressure or misrepresentation. Because these agreements can carry significant legal and tax consequences, they are commonly prepared or reviewed by probate attorneys specializing in intestate law to ensure compliance with probate law and to reduce the risk of future challenges.
Avoiding Intestate Secession and Settlement Agreements
While there are avenues for resolving estate distributions among heirs, whether it be through intestate succession or family settlement agreements, the best plan is to avoid either option if possible. This involves formal estate planning, which includes a will or trust to dictate the decedent’s wishes with respect to the distribution of their estate.
As probate attorney David Di Pietro of Di Pietro Partners explains:
“Proper estate planning avoids intestate succession. A solid estate plan includes a will, trust, as well as a power of attorney for financial and health needs. These vital documents protect you and your family and SAVE money.
How many people want the State deciding how their hard earned life’s savings are distributed? How many folks want to pay the State money after they die?
Properly written and executed estate plans minimize estate taxes, eliminate lengthy probate proceedings, avoid family fights, establish care for minor children, and fulfill your wishes. Remember, no one can predict the future. So, planning ahead gives peace of mind”