Written by Amy Baker,
Last Modified: 17th December 2021

We answer some important questions about inheritance laws in the USA and the steps you should take to protect your assets after buying a property there.

Anyone planning on buying property in the USA will need to brush up on their knowledge of US inheritance law in order to protect the best interests of their loved ones. This is because, like most US law, how things are governed will depend upon the state in which you’re located. Today we’re looking at how things operate in the US so you’ll know how to prepare to best protect your family for the future.

Each state either adopts a ‘community property approach’ or a ‘common law approach’

How do inheritance laws work in the USA?

In the USA, inheritance laws govern how people receive their share of assets. They also govern which relatives have a statutory right to claim an inheritance even if they aren’t included in the express terms of the will. Each state either adopts a ‘community property approach’ or a ‘common law approach’ – this essentially determines the way in which estates are divided and which members of the family are automatically entitled to their share.

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Community property

The community property states are California, Arizona, Idaho, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska is also a common property state but in order for a spouse to have a right to inheritance, there must be a written agreement between spouses.

The term ‘Community Property’ usually refers to ‘property’ acquired by either spouse during the course of their marriage. This ‘property’ includes:

  • Income received from work
  • Property bought during the marriage with income from employment
  • Separate property that a spouse gives to the marriage community (and therefore will be obliged to share with the spouse).

Get in touch with an Independent Financial Advisor to get specialist advice on managing your finances in the USA.

A spouse will retain a separate interest in property, meaning they haven’t got to automatically share it with a spouse, if:

  • It is acquired as an inheritance or as a gift
  • It is acquired prior to the marriage
  • There is an agreement in place between the spouses expressly stating that the property be kept separate from the marriage community.

In the majority of circumstances, US law forbids leaving a spouse out of a will entirely. As a general rule, in community property states, each spouse will automatically own half of everything that the couple earned over the course of their marriage. They are then able to dispose of their share of this property in whichever ways they desire. This means that half will go automatically to the spouse, and the remaining part of the estate can be distributed in accordance with the wishes of the person in question. They can of course elect to give the remainder to the spouse too, but they can also share it amongst children, grandchildren, friends and other relatives.

Where the deceased wishes to give less to the remaining spouse, a written agreement must be in place outlining this approach. This automatic right of the surviving spouse to automatically inherit half can also be negated by a prenuptial agreement.

In order to avoid confusion and wills being contested by unhappy spouses and family members, it’s advisable to have a will drawn up expressly stating your wishes for how you would like your estate to be distributed.

When moving to the US, ensure your inheritance wishes are heard

Common law

All of the states not listed above are common law states. Here, a spouse is NOT automatically entitled to the one-half interest in all property acquired during the marriage. Ownership of property acquired during the marriage is not automatically assumed to be half and half. Instead – it will be determined who property and assets belong to by the name on the title of the property, or by determining which spouse’s income purchased it.

In common law states a spouse is NOT automatically entitled to the one-half interest in all property acquired during the marriage.

Bear in mind that in common law states, ownership of property will be determined by the name on the title deed, regardless of whether the other spouse paid for it.

For more information, call your USA property specialists on 020 7898 0549 or send us an email at [email protected].

In common law states the surviving spouse IS protected from being disinherited from the will. While every state has different rules, more often than not the surviving spouse has a right to claim one-half or one-third of the spouse’s property. If the deceased outlines leaving less to the surviving spouse, where a will is not in place, the surviving spouse will be able to contest this is court to inherit the amount that the specific state law outlines they are entitled to.

It is possible to give the surviving spouse less than this allocated amount – but that will need to be agreed in writing in the will, otherwise the spouse will be able to fight it in court.

What happens after divorce?

As the law changes from state to state you will need to get clued up on how your rights will change once your divorce papers are signed. In some states, gifts made in a will to an ex-spouse will be automatically revoked. Elsewhere, divorce won’t change what the ex is entitled to at all. In order to avoid confusion, never assume that the rights of your ex-spouse will be retained or revoked – the only way to make sure that they are given what you intend to give (or not give) them is to have a brand new will drawn up.

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Children’s rights

In most US states, children do not have a legally protected right to inherit property but they will be protected where they have been unintentionally left out of the will. For example, US law presumes that where a parent has included all children in a will bar one, who was born after the will was drawn up, it will be presumed that this omission was accidental and the child will be awarded an equal share with their siblings. Where omissions are intentional – they need to be expressly stated within the terms of a will.

Are you buying a home under joint ownership with other family members? Find out how it works in our free guide.

Grandchildren’s rights

Again there is no legal right stating that grandchildren are entitled to inherit property from a grandparent. In some US states, if the parent of the grandchild has died, the grandchild may have a statutory right to inherit property from a grandparent if the will doesn’t expressly state the  intent to disinherit the grandchild.

Your intentions will be honoured by having a new will drawn up, in accordance with US law.

The importance of making a will/hAs you can see, inheritance law can be a little tricky to get your head around – especially as things differ so much from state to state. You can assure peace of mind that your intentions will be honoured by having a new will drawn up, in accordance with US law, which expressly outlines your intentions for your estate. This is the only sure fire way to secure peace of mind and to ensure the best interests of your loved ones are completely protected.

For more information, simply fill in our enquiry form below and our free Resource Centre specialists will be in touch to put you in contact with law firms based in America and used to dealing with international clients.

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