A state's intestacy laws generally aren't a factor for assets that pass by contract to named beneficiaries when you die. A life insurance policy is such an asset, but it's not infallible in avoiding probate or intestacy issues. If you name your estate as your policy's beneficiary, or if its beneficiary predeceases you and you don't name a new one, New York's intestacy laws will determine who gets the death benefits if you neglect to leave a will.
If you die without a will telling the probate court – called a surrogate's court in New York – where you want your property to go, you've died intestate. The law is written in such a way as to make an educated guess regarding most people's unspoken wishes – it presumes you'd want your closest relatives to inherit from you, and this order of inheritance is called intestate succession. Your probate estate, that which is subject to intestate succession rules, would include anything not transferred to beneficiaries by some other means, such as a life insurance policy without a named, living beneficiary. In New York, if the total value of your probate assets exceeds $30,000, the court will appoint an administrator to oversee your estate and distribute your property according to the state's rules for intestate succession.
If you're married, New York says your spouse has the first right to your probate estate. Exactly how much she gets depends on whether you also left any children or grandchildren. If so, she gets the first $50,000 off the top of your probate estate – your life insurance and anything else you didn't transfer by other means. She also receives half of the remainder of your estate, with your children getting the other half. If you don't have children, your spouse receives everything.
Under New York's intestacy laws, your children inherit from you "by representation." In legal terms, this means your children's children may be included in this provision. In the event that one of your children predeceases you, his children would inherit his share, dividing it equally among them. For example, if your life insurance death benefits were $250,000 and if you had no other probate assets, your spouse would receive the first $50,000, then $100,000 – half of the balance. If you have two children, they would divide the remaining $100,000 between them, receiving $50,000 each. If one of your children predeceased you but left two children, your grandchildren would receive $25,000 each, half their parent's $50,000 share. If you left no surviving spouse, your children – and their children – would inherit the entire $250,000 in the same manner.
In New York, your other relatives would not inherit unless you leave no spouse, children or grandchildren. Your surviving parent or parents are next in line in this case. If they're no longer living, your life insurance proceeds would go to their "issue" – your siblings. This also occurs by representation, in equal shares. If all these people predecease you, your policy death benefits would pass first to your grandparents, then to your aunts and uncles. Your grandparent's grandchildren and great-grandchildren are last in line.
If no relative listed in New York's code for intestate succession exists, your life insurance proceeds escheat or pass to the state. The scope of listed relatives covers many bases, however. For example, your siblings include half-siblings in New York – the law makes no distinction between those you share one parent with or two. Nor does the law differentiate between adopted and biological children – although if you have stepchildren, they'll be left out. If your spouse is pregnant with your child when you die, your child is your issue and entitled to inherit, even if he's not born yet.
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- Onecle: New York Estates, Powers and Trusts – Part 1 §4-1.1 Descent and Distribution of a Decedent's Estate
- Rudolf J. Karvay: Dying Without a Will in New York – Intestacy
- Greenfield, Stein & Senior: Resolving the Question of Who Can Inherit?
- The Free Dictionary: Descent and Distribution
- New York State Unified Court System: New York City Surrogate's Courts