That is totally not true. You estate would be administered by a relative, if you have not appointed an executor in a will. Administration is started by that person going to the Register of Wills for the county where you resided, being appointed as the executor or administrator [also called the personal representative], and paying all debts of the deceased, including all taxes. The the estate will be distributed by the personal representative according to the will or the intestate law that governs when there is no will. When there is no will, the law says in what order relatives are entitled to the remaining assets.

If you do not already have a will, it is important that you go to an estates lawyer and get your will prepared and executed, and also these important documents: a power of attorney, advance health care directives, also known as a living will about what medical treatment you would or would not want when someone else has to speak for you, and a health care power of attorney appointing the person to speak for you. Everyone should have these documents.

THIS RESPONSE IS NOT LEGAL ADVICE, SINCE I DO NOT HAVE ALL OF THE INFORMATION THAT WOULD BE REQUIRED, AND I DO NOT HAVE A REPRESENTATION AGREEMENT WITH YOU.

* If the answers to your question confirm that you have a valid issue or worthwhile claim, your next step should almost always be to establish a dialog with a lawyer who can provide specific advice to you. Contact a lawyer in your county or township.

* Another reason for contacting a lawyer is that it is often impossible to give a good answer in the Internet Q&A format without having more information. The unique circumstances of your situation and things that you may not have thought to mention in your question may completely change the answer. If you want to be sure that you have a complete answer to your question and an understanding of what that answer means, establish a connection with a lawyer who practices in the area of your concern.

I don't know what you heard or read, but as you have stated it, it is not exactly true. You might be thinking of the Medicaid rules. Medicaid rules vary as per each state, but by law, Medicaid is mandated to seek recovery from the estate of the person who received Medicaid assistance. In such cases, assets may have to go to Medicaid, but that is not really the same as the state reaching into a bank account. Only in the rare cases when a person absolutely has no spouse, descendants or relatives will funds go to the state (called escheat).

If Medicaid is not an issue, don't worry about this. The general rule is that when 2 or more people are on a bank account and one person dies, any money in the account passes to the joint account holder outside of probate. If the accoount is only in the name of the person who died, then an estate must be probated for the deceased person. Usually the person in charge (called the personal representative or executor) is the spouse, child or sibling. Once appointed by the court, the personal representative takes the papers to the bank and the bank releases the funds to the personal representative. The personal representative then opens an estate account and deposits the funds into the estate account and disbursed to the heirs/beneficiaries either as per the will or per intestacy law if there is no will.

The family/spouse gets a small allowance ($3500 if this is PA) and these funds are exempt from claims of any creditors. The spouse may have to claim the exemption. If this is a very small estate with few or no probate assets, probate may not even be warranted. But there will still be a way to get the bank to release the funds.

All of this points to the fact that a person with a bank account needs to contact an estate planning lawyer if they do not already have a will, financial and health care power of attorney and advance directive/living will in place. Even if they have these documents, the person and their wife need to periodically review these documents and see if they need revised. Any time there is a birth, marriage, death, divorce, adoption or change in property (cars, land) it is a good time to review one's will. I aos do not recommend getting a do-it-yourself will kit. While these may be fine for some, they are not for everyone and the person who thinks that he/she will save a few bucks on their will may end up leaving their loved ones with a costly mess. Don't let your legacy be a lawsuit.