A Last Will and Testament is one of the most important legal documents you can create during your lifetime. But what happens to your property if you pass away without a will? Who receives it, and why?
Most people assume that when they pass away, their spouse or children will automatically inherit everything but that’s not always how it works, especially in community property states like Texas.
If you die without a will, your assets are distributed under Texas intestate succession laws. While that may sound straightforward, the distinction between community property and separate property can create surprising and sometimes problematic results for your surviving family.
In this post, we’ll break down what intestate succession is, what happens when someone dies intestate (without a will) in Texas, and how community property rules shape the inheritance process.
What Is Intestate Succession?
Intestate succession is a legal process that comes into play when someone passes away without leaving behind a valid will or other legally binding document dictating how their assets and property should be distributed. Instead, the distribution of assets is determined by the laws of intestacy in the state where the person passed away.
The laws of intestacy establish a specific order of priority for the distribution of assets. Typically, a surviving spouse and children are given priority, followed by other close relatives, such as parents and siblings. If there are no surviving relatives, the assets may escheat to the state.
What Is Community Property?
Texas is one of nine community property states. That means most property acquired during a marriage is considered equally owned by both spouses.
Examples of Assets Considered Community Property
With community property, each spouse has an ownership interest in virtually every piece of property that’s been purchased, earned, or otherwise acquired during the marriage. Keep in mind, this can be true even if only one spouse’s name is on a property’s title, and regardless of whether just one, or both, spouses are working to bring in income. The most common types of community property include:
- Income: Earned income is one of the most common examples of community property.
- Assets purchased with income: If community property income is used to purchase other assets, those assets are also considered community property.
- A residence: Your home, if purchased during the marriage, is community property; even if only one spouse’s name is listed on the title.
- Rent or property profits: If property was purchased with community property earnings and generates rental income or profits, that money is also community property.
- Debts: Debts incurred during the marriage are generally considered shared and would be split equally upon divorce.
- Settlements or damages won: Certain damages or settlements awarded during the marriage may be considered community property.
- Inheritances or gifts received by one spouse during the marriage: These are generally considered separate property unless they are commingled.
- Certain personal injury settlements: Compensation for lost wages or medical bills may be community property, while pain and suffering damages may be separate.
What Happens If You Die Without a Will?
If you pass away without a will, your estate is distributed according to your state’s intestate succession laws. While the specifics vary by state, the general order of inheritance usually looks like this:
- Your spouse
- Your children (including adopted children)
- Your parents
- Your siblings
- Extended family (like nieces, nephews, grandparents, and cousins)
A Typical Example:
- If you’re married, your spouse typically inherits everything.
- If you’re not married but have children, your estate is divided equally among them.
- If you have no spouse or children, your parents inherit your estate.
- If your parents are no longer living, it goes to your siblings, then to extended family.
- If no living relatives can be found, your property may escheat to the state; meaning the government takes ownership. This is rare, as even distant relatives can inherit under these laws.
Keep in mind, things can get complicated especially if you have children from a previous relationship or a blended family. That’s why understanding your state’s laws or better yet, creating a will is crucial to ensuring your wishes are followed.
How Does It Impact Your Estate Plan?
Where you live and whether you’re in a community property state can have a significant impact on your will or trust. It’s critical that your estate plan takes any community property laws into account. For example:
- If you live in a community property state, you generally can’t have an individual trust that excludes your spouse.
- Upon your passing in a community property state, your spouse is legally entitled to 50% of the community property, while you may distribute your 50% as you wish.
- Some community property states allow for a Right of Survivorship, which lets the deceased spouse’s portion automatically pass to the surviving spouse without going through probate.
- Other community property states may require probate for the deceased spouse’s share.
Who Is Excluded from Intestate Succession?
If you’re part of a blended family, it’s important to understand how your relationships are treated under the law.
- Biological or adopted children are considered your legal heirs under intestacy laws. They are eligible to inherit your estate when you die.
- Stepchildren and foster children, however, do not have the same inheritance rights. They are not considered legal heirs unless you have legally adopted them. If you want them to inherit, you must name them as beneficiaries in your will.
Intestate succession only includes people related to you by blood or marriage. If you want to provide for others, such as friends, domestic partners, or business associates, you must specifically include them in your will. The same goes for charitable causes: your favorite nonprofits cannot inherit from you under intestate succession laws unless you name them in your will.
Final Thoughts On Intestate Succession
Avoid intestacy by creating a will. Intestate proceedings cost your loved ones time and money, and they often create confusion during an already painful time. They can even lead to disputes among heirs.
Creating a will gives you control, peace of mind, and saves your loved ones from unnecessary legal complications.
Texas law does its best to fairly distribute your estate when you die without a will, but the results may not align with your intentions. Community property rules make this even more important to understand especially if you have a blended family, own separate property or real estate, and want specific individuals to inherit certain assets.
Contact Us
At the Law Office of Udo Ezeamama, we can help you design an estate plan that fits your family and your preferences. Our qualified estate planning attorneys have decades of experience helping Texas families create wills, trusts, and other legal documents that achieve their goals. Learn more about how we can assist you with estate planning under Texas community property laws today.