What happens if I die without a will?
If you do not have a Will, the State of Texas has one for you. However, Texas’ “default Will” distributes property in a manner that is not inherently intuitive to non-lawyers. Generally, not having a Will can cause your loved ones to spend time, emotional energy, and money on administering an estate that otherwise could have easily been addressed through estate planning.
Example of a problem:
Your spouse may not inherit your home.
Dudley married Karen, his second wife. Dudley has a child, Sherman, from his first marriage that ended in divorce. Dudley and Karen resided in Dudley’s home which he owned before he married Karen. Dudley saved $100,000 in wages while married to Karen, and Dudley had saved $30,000 before marrying Karen. Dudley dies without a will. What happens to Karen?
Texas uses a community property system, which you may be familiar with in terms of divorce. However, this system also plays a role in estate planning. In this system, there are two types of property:
Separate Property: Separate property – that which was owned before marriage, or which was received by gift or inheritance during marriage; and
Community property – that which is not separate property and each spouse has a joint, one-half interest in it.
Under the Texas Estates Code, when a spouse dies without a will and had a child outside the marriage, the following happens:
- The decedent’s (the person who passed away) share of community property goes to the child.
- The decedent’s child takes 2/3 of separate property that is not real estate.
- The decedent’s child takes all separate property that is real estate, but the spouse may live in the residence for the remainder of his/her life.
How this plays out:
1. The $100,000 –
a. This is community property as it was earned during the marriage, and Dudley owned a 50% share of this money.
b. Sherman (the child) would get Dudley’s entire share of the community property: $50,000; and
c. Karen retains her share, $50,000
2. The house –
a. This is separate property because Dudley owned it before he married Karen;
b. Sherman gets the home; but
c. Karen retains the right to live there.
Important: If Karen had to leave the home (perhaps because she can’t afford it or needed to move somewhere smaller), Sherman would have no legal obligation to help fund or otherwise finance a new residence.
3. The $30,000 –
a. This is separate property because Dudley earned it before he was married to Karen;
b. Sherman would inherit 2/3 of this, $20,000; and
Karen would inherit 1/3 of this, $10,000.
Use an estate planning attorney to address your needs. In this instance, Dudley might have wanted to leave the house to Karen. He might have wanted the house sold and the proceeds split between his son and wife. Whatever the case might have been, without a Will, the State of Texas’ Estate Code decided not only for Dudley but also for Karen and Sherman.
Just one variation of the “default Will”
The Texas “default Will” manages the distribution of assets based on the deceased’s situation in life. Factors taken into consideration include marital status, whether the deceased had children, whether the deceased’s parents or siblings are living. Further, you can read my blog post about the negative effects not having a Will can have on minor children here. To help ensure your wishes are carried out, please contact me, your estate planning attorney.