Who are the heirs to an estate when someone dies without a will?

Dying without a will in Texas means dying intestate. This term is used to mean that you do not have a will at the time of your death. Someone else will have to make the decisions about how to divide up your estate. Typically, that person is a probate court judge. To make decisions about how to divide up an estate the judge will refer to the Texas Estates Code and the laws of intestacy. Property of yours will either be classified as community property or separate property. This is an important distinction given that how a piece of property is classified will determine who receives the property after you have passed away. 

The Texas Estates Code’s definition of separate property states that separate property means that you owned the property before getting married or that you inherited the property as a gift from another person. Community property is all other property that you acquired during your marriage. Depending upon the length of your marriage it could mean that most of the property that you own is community property. Dying without a will means that the community property that you own will be distributed differently than you may have imagined while you were alive. 

The nitty-gritty of how property is distributed if there is no will

For starters, you need to have a will if you are an adult. This may seem like the least interesting thing in the world for you to think about, but it is the truth. If you can manage to take the time necessary to draft a fantasy football team, get your nails done, or watch a movie then you can use a similar amount of time to plan for a will. Having a will does not affect you. You will have passed away before having a will becomes relevant to the lives of your family, friends, and potential beneficiaries. Imagine the good that you can do if you have a will. Imagine all the people that could be harmed if you don’t.

Spoiler alert- if you don’t have a will then your family will get all your stuff. That may be ok for some of you but for others, it may be the last thing that you want to see happen. You may have a church, or charity of another person that you would like to receive most of your property when you pass away. Think about this before you choose not to take the time to create a will. If you are not married and/or have no relationship with your children, then you may not want your kids to inherit property from you. Whatever your motivation or situation is, autonomy over what happens to your property after you pass away is what having a will can do for you. Otherwise, you leave it up to a probate court judge to divide up your property by the intestacy laws of Texas

Drafting a will is not for the rich. Drafting a will is not for the poor. Drafting a will is not for the old. Drafting a will is not for the young. Drafting a will is for everyone. What brings us all together in this life are two things: we all are going to die and none of us know what that moment in time will be. This may be a little intense for a family law blog but so be it. We need to consider that the decisions that we make can have consequences beyond what we may be considering at this moment. Do not take it for granted that you are going to have more time than you think to create a will for yourself. 

This is not just a will creation issue. This is probably an issue that we all can stand to grow from. Have you ever put off until tomorrow what you could have done today? Procrastination. We all are guilty of procrastinating. Finishing that assignment from work. Mowing the lawn. Unpacking those last few boxes after moving. We assume that there will always be time to get something done so we focus our energy on things that give us more satisfaction now rather than focusing on the bigger picture issues that aren’t as pressing. However, the thing about a will is that it only matters after you pass away. By that logic, you will never sit down to create a will because you will not be around to benefit from it. There is an old saying that goes something like this: the definition of nobility is the plant a tree the shade of which you will never be able to enjoy. Presumably, this is because we plant trees when they are little saplings we will not be around when those saplings turn into great big oak branches.

Your will is a lot like that. The work that you do now to create a will is not something that may benefit anyone for decades. However, once the will does stand to benefit someone your loved ones, church, etc. will be glad to know that you took the time to prepare your family for your passing away. It is a frustrating thing, for anyone who has had a close relative pass away without a will, to have to go through this process without any guidance or instruction from a loved one. Having a will can help your family do what they need to do as far as planning your funeral, grieving generally, or handling themselves however they see fit at that moment.

So, if you do pass away without a will here is how the property will be divided. Your spouse will be able to keep half of the community property, one-third of your separate personal property, and a one-third interest in your separate real property and a life estate in your real property that is community. Everything else that you own would go to your children including your one-half interest in the community. 

Suppose that you were married but that you never had kids or the kids you had passed away at a very young age. In that case, your spouse would inherit all of the separate property that you own, and half of the community property owned by the two of you. All your separate real property would be inherited by your spouse. However, there is a major caveat to this last statement when it comes to real property and how it is inherited if your parents and/or siblings are still alive. In that case, a division will take place as follows. 

Your spouse would receive half of your separate real property and half of whatever is left. If both of your parents are still living then ¼ of your property would go to your mother and ¼ would go to your father. If you have only one parent to survive then ¼ goes to the parent and ¼ goes to your surviving siblings. Or, if you have one parent who survives you but no siblings then ½ goes to the parent that survives you. Finally, ½ would go to your siblings who survive you if you have no parents still living but at least one sibling. 

What property is not impacted by the laws of intestacy in Texas

Estate planning should consider ways for you to avoid probate and avoid having to concern yourself with setting up estate planning vehicles that will allow you to plan for how your assets are divided upon your death. Consider that there are ways for you to get your property into the hands of the people that you want without having to go through the estate planning process. Keep in mind, however, that not all property can be passed down this way. Rather, you can pass certain properties down via the ways we are about to talk about, and other properties will still need to be passed with a trust or a will. However, you should not need to do more heavy lifting than need be. So, keeping in mind that there are ways to bypass estate planning in some areas you should take advantage of this where you can and plan in those areas where you cannot. 

Life insurance is a great way to pass property down to another person without estate planning or probate being involved. Life insurance policies are diverse- by this, I mean that there are different sorts of life insurance that do different things. Broadly speaking, however, there are two types of life insurance that you can concern yourself with- whole life insurance and term life insurance. Whole life insurance offers you a savings account within the life insurance policy that can pay you money later. However, you should review the details of these whole life insurance policies to determine how much you can withdraw from the account and if the monthly premiums make it worth it to engage in the investment. The fact that you are investing in an insurance policy may make this an option that you do not want to engage with. 

On the other side of the ledger, is a simpler term life insurance policy. This is the type of insurance that most of us are more familiar with. Under a term life insurance policy, you pay a yearly premium in exchange for a certain payout upon a specific condition occurring, in this case, your death. There is nothing more to it. You can look up the different premiums online and determine whether you will need to undergo a physical or medical evaluation to qualify for that premium/benefit amount. Consider the needs of your family and your income when it comes to determining what your payout should be on the insurance policy. 

Retirement funds do not become impacted by whatever happens with a probate court dividing up your property upon your passing. Individual Retirement Accounts and 401Ks are the types of retirement accounts that most people are familiar with as far as accounts that are set up through your employer (401K) and accounts that we can contribute to independently of our employer. There are various sorts of IRAs that you may be able to invest in such as traditional, Roth, self-employed, and backdoor Roth. Determining the best way to invest in these accounts, if at all, should be done in conjunction with an experienced investment advisor or simply after a great deal of research on your own. 

However, by investing money into these retirement accounts you can list beneficiaries and secondary beneficiaries. Were you to pass away, your beneficiary would inherit the account without you having to do anything further. If your primary beneficiary does not survive then your secondary beneficiaries would inherit the account. You should be sure to find out how you designate these beneficiaries when you are setting up your retirement savings either through your employer or through an investment broker online. You must list people as beneficiaries to take advantage of the probate avoidance mechanisms within these accounts. 

One last word on retirement accounts and beneficiaries that I should add is regarding updating your beneficiaries after major life events such as death and divorce. Bear in mind that if your spouse is no longer your spouse, due to their having passed away or you all are having to get a divorce, then you need to go into your account and update your beneficiaries. The last thing you want to see happen is for you to pass away and have your ex-wife receive the contents of your retirement accounts. For those of you saying that your ex-spouse could simply do the right thing and pass along the property to your current spouse or your children, it isn’t necessarily that simple. Depending upon the size of the account that he or she inherits there could be major logistical/tax impediments to him or her doing so. 

Therefore, the best way for you to ensure that your property ends up going to the person or entity of your choice would be to get it right the first time. Making sure that the beneficiary on your life insurance and retirement accounts are up to date is a good thing to do when major life events happen or even once a year. It does not take long and will not cost you any money. However, your doing so can make the lives of your family much easier if you do pass away and the subject of these accounts getting into the right hands becomes relevant. 

The last kind of property that I wanted to discuss which is not impacted by the laws of intestacy in Texas is payable on death accounts. Most of us have a bank account of some sort- checking savings or both. These accounts can become payable on death accounts by contacting your financial institution and simply alerting them to the fact that you would like to sign the paperwork that will transfer your account to an individual upon your passing. You may have an adult child or a spouse that does not share the account with you currently but that you would like to have the contents transferred to when you pass away. Different banks or credit unions may have different rules on how you can accomplish this, but overall, the process is streamlined and consistent across the board. You can make it so your property goes to the right person with ease by adding a payable and death provision to any bank account that will allow you to do so. 

In any event, the time is now to start considering the types of property that you own and the circumstances that you find yourself in as far as making sure you have the final say on how your property is divided rather than a court once you pass away. With so many different avenues available to you as far as estate planning, non-probate accounts, and life insurance there is no reason why you cannot efficiently manage your affairs in such a way that you can set up your assets to transfer and pass in the exact way that you choose.

The best way to learn about your options for your circumstances is to work with an experienced estate planning attorney. While the information in today’s blog post was hopefully helpful to you, it is just information. You can take this information and go to the next step- talk with an attorney who can answer your questions based on the information in this blog post, the law in Texas, and your situation. There is no group of estate planning attorneys better equipped to serve you than those with the Law Office of Bryan Fagan. 

Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan

If you have any questions about the material contained in today’s blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed estate planning attorneys offer free-of-charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas estate planning as well as about how your family’s circumstances may be impacted by the filing of a probate case. 

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