Dwight D. Eisenhower once said that
“America is best described by one word: Freedom.”
This is what makes America unique. As Americans, we love our freedoms. We want to
live as we like and spend our hard-earned money on what we want. We generally resist when the
government tries to interfere with our lives. However, less than half of all Americans have even
the most basic estate planning documents. Therefore, these people are voluntarily giving up their
freedom to decide what will happen to their assets when they die.
The law gives you the freedom to decide how and to whom your assets are distributed
when you die by making a will. However, if you die without ever making a will, then your
assets will distributed according to a statutory formula that will not take into account your wishes
and your unique circumstances.
What property is inherited by your heirs in Texas if you die intestate depends on what
kind of property you have at your death. There are two types of property that are relevant to
probate: probate property and non-probate property.
Non-Probate property include joint accounts with right of survivorship specified in the
contract, life insurance policies, retirement funds that have a designated beneficiary, and
any other account where you designate a beneficiary. You can name your estate as the
beneficiary. When you die, the property goes to the beneficiary your designated when
you created the account.
Probate property is further designated as either community property or separate property.
Let’s look at the ways your property will be distributed:
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DO NOT assume that just because you are married and die without a will in Texas that
your spouse will inherit your entire estate. This is not always the case. How your property will
be divided will depend on whether the property is characterized as community property or
separate property.
Community Property – All property acquire during a marriage is presumed to be
community property. Each person owns ½ of the community estate.
Separate Property – All property which you came into the marriage with or property that
you received during the marriage by gift or inheritance.
If you are married, but have no children or other descendants:
The community property would pass to the surviving spouse – this includes the real estate
and any other community property. If there are no children or other descendants, then the
surviving spouse would also receive all of the separate personal property.
BUT as to separate real estate, the surviving spouse inherits only ½ of the separate real
estate and ¼ of the real estate goes to the Deceased’s father and ¼ to Deceased’s mother.
If only one parent is surviving, then the surviving parent receives ¼ of the real estate and
the remaining ¼ is equally divided between the Deceased’s siblings and their
descendants.
If you are married and have children or other descendants:
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ALL children are also the children and descendants of the surviving spouse.
Community property – Your spouse will inherit all of your ½ of the community property.
Separate property –
Separate real estate – Surviving spouse receives a life estate only in 1/3 of the
separate real estate. Once the surviving spouse dies, then this 1/3 goes to the
surviving children.
The other 2/3 of the separate real estate is divided equally among the
Deceased’s children.
Other separate property (cars, boats, stocks, retirement, etc) – 1/3 to surviving
spouse and 2/3 to be divided equally between the Deceased’s children.
If you are married and have children or other descendants:
ALL children are NOT also the children and descendants of the surviving spouse.
Community real estate – Surviving spouse retains only the ½ owned by that spouse. The
Deceased’s ½ is divided equally amount the Deceased’s children.
Other community property – would be divided the same. ½ retained by surviving spouse
and the other ½ to Deceased’s children.
Separate property Real estate – Surviving spouse receives a life estate only in 1/3 of the separate
real estate. Once the surviving spouse dies, then this 1/3 goes to the surviving
children.
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The other 2/3 of the separate real estate is divided equally among the
Deceased’s children.
Other separate property (cars, boats, stocks, retirement, etc) – 1/3 to surviving
spouse and 2/3 to be divided equally between the Deceased’s children.
To illustrate the problems that can result with a blended family and you die intestate, let’s look at
Jack and Jill. Jack and Jill have been married for 25 years and have two children of their own.
Jack has two children from a previous marriage.
When Jack dies, he leaves behind the following assets:
1. A beach house he owned before he met and married Jill.
2. A home that he and Jill purchased after they got married and in which they lived
their entire married lives.
3. A stock portfolio worth $400,000 to which both he and Jill contributed for their
retirement.
Community property – The home in which he and Jill lived is community property. But since
Jack has children from another marriage, Jill will NOT inherit the entire home. Although she
will retain the right to live in the home during her lifetime, Jack’s children will inherit his onehalf of the home in equal shares.
Since Jack owned the beach house before he married Jill, the beach house is separate property.
Therefore, the beach house will be inherited by Jack’s children, instead of Jill. Although Jill will
retain a 1/3 life estate in the property, she may not have unlimited access to the beach house as
she once did when Jack was alive. This can also prove to be stressful if she has a strained
relationship with either her children or her stepchildren.
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What about the stock portfolio that Jack and Jill spent 25 years saving for their retirement? If
will be split in half. Jill will retain $200,000, but the rest will be split equally between Jack’s
four children. This may have the undesired result of Jill not having enough resources for her
retirement.
What do you think – is this the way Jack would have wanted his assets distributed?
If you are single with no children:
If both parents are living, then the real estate will be split equally between the parents.
If only one parent is alive and there are no brothers or sisters of the Deceased, then the
surviving parent inherits everything.
If the Deceased has brother and sisters or descendants of siblings (nieces or
nephews), then the surviving parents inherits only ½ and the other ½ will be split
among the siblings and their descendants.
If neither parent is surviving, then the estate passes to the brothers and sisters or their
descendants. Children of a deceased brother or sister take their parent’s share.
If no surviving parent and no brothers or sisters or their descendants, then the estate is
divided into two halves, with one half passing to relatives on the mother’s side and the
other half passing to relatives on the father’s side.
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Example: Sally dies. Sally was never married and never had any children. Sally’s parents died
before she did. Sally had three siblings – Albert, Bobby, and Clyde. Albert is still alive, but
Bobby died before Sally and left two children and Clyde also died before Sally and left three
children. In this case, Sally’s estate is divided per stirpes and not per capita. What this means is
that Sally’s estate is divided into three parts. Albert gets one third, Bobby’s two children get his
one third, and Clyde’s three children receive his one-third. Bobby’s two children must share his
one-third and receive one-sixth each. Clyde’s three children share his one third and receive oneninth each.
Example: Martin dies. Martin was never married and had no children. Martin’s parents are
deceased. Martin had three siblings, but all of his siblings died before Martin. One sibling had
one child, the second sibling had two children, and the third sibling had three children. Here the
estate will be divided per capita since all of Martin’s descendants are at the same level. There are
six nieces and nephews surviving.
The estate is divided into six shares with each niece or
nephew receiving one share.
If you are single with children:
All of your property will be passed on to your descendants.
If your descendants are of the same degree of relationship (meaning all are the
Deceased’s children or all are the Deceased grandchildren), then the assets will be
divided equally between them.
If your descendants are of different degrees of relationship (meaning some of the
Deceased’s children died before he/she did and left children or grandchildren of their
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own), then the younger generation would only receive the share that the older generation
would have received had he or she survived.
Can a husband or wife inherit after a divorce?
Texas law provides that all provisions in a will in favor of a former spouse “must be read
as if the former spouse failed to survive the Deceased” and are null and void. Therefore, if you
get divorced and don’t change your will, your ex will not inherit under your will even if you
want her to inherit from you.
For your ex to inherit after a divorce, you would have to make a new will AFTER the
divorce in order for him/her to inherit from you under your will. To be safe, change your will
after a divorce. A 2007 Texas Supreme Court case shows how expensive litigation can result if
you don’t change your will:
Nash’s will left everything to his wife, or if she predeceased him then to his stepdaughter. Nash
and his wife later divorce, but he never changed his will. Nash died and both his ex-wife and her
daughter, Nash’s stepdaughter, survived him. A relative filed for probate seeking all of Nash’s
property for Nash’s other heirs at law saying that the provisions in the will giving everything to
his ex-wife and his ex-stepdaughter were no longer valid.
Since the will made no other
provisions for the property, the relatives said that the property went to Nash’s heirs at law (nieces
and nephew, etc). In contesting the probate, the ex-stepdaughter said that the property belonged
to her arguing that Texas law treats the divorced wife as having predeceased Nash, therefore the
provision that if his wife predeceased him everything would go to the step-daughter came into
effect.
The Court ruled against the ex-step-daughter and in favor of the relative, holding that since the
ex-step-daughter only took under the contingency that her mother predeceased Nash, the ex-stepdaughter did not inherit because her mother was still alive. This is true even though the Texas
statute treats the mother as having predeceased Nash.
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Section 69 of the Probate Code now provides that after divorce the wife and all of her relatives
who are not relatives of the Deceased testator will be treated as if they failed to survive the
testator.
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