Texas Estates Code Chapter 201 determines who is to receive your property in the event you die without a will. Fortunately, the State of Texas does not automatically get all your assets at death!

The Texas Estates Code covers a lot of different scenarios. For this post, we examine one case – dying while married with children.

Warning! This is a simplified example and you should seek customized guidance for your specific situation!

         Sample Family:

Al – Husband

Peggy – Wife

Bud – Al’s child from prior marriage

Kelly – Peggy’s child from prior marriage

Al has NOT adopted Kelly.

        Al’s Assets At Death:

1. Homestead in Texas, purchased by Al and Peggy during their marriage with community assets– community property,

2. Checking account in both Al and Peggy’s name – community property,

3. Al’s separate property ranch in Texas inherited from his Mother, and

4. Al’s separate property gun collection inherited from his Dad

       Sample Situation:

Al dies without a Will. None of his assets have “pay on death,” “joint tenants with right of survivorship,” or beneficiary designations to control the disposition of assets after Al dies.

Assume Peggy has gone through the court process to be appointed as Administrator for Al’s estate and now has court authority to sign for Al’s assets.

This court process is particularly important for the house and ranch. A title company will be reluctant or unwilling to sign off on the sale of Al’s interest in real estate until someone has gone through the court process and gained court authority to sign for Al’s property.

The bank holding the checking account will likely freeze the checking account once they find out about Al’s death.

Peggy, as court appointed administrator of Al’s estate, is to distribute Al’s assets according to the Estates Code as follows (after the payment of Al’s estate expense and debts):

       Texas’ Asset Distribution:

  1. Checking account

    – community property. In this case, the Estates Code asks if Al’s child (in this case Bud) is also a child of his wife Peggy. Bud is NOT Peggy’s child. As a result, Peggy keeps her community property half the account and Bud receives his Father’s community property half of the account.

  2. Homestead

    – community property. Same result as with the checking account but with a twist. Peggy, as Al’s surviving spouse, has a homestead right to use the house rent-free for the remainder of her life as long as she pays the ongoing expenses of the house (e.g., utilities, regular wear-and-tear repairs). Texas Estates Code Chapter 102. Bud cannot take possession of the house, attempt to cause a sale of the house, or rent it out until Peggy abandons her homestead right.

  3. Al’s separate property ranch

    – Bud receives 100% of the separate property ranch subject to Peggy’s 1/3 life estate in the ranch. The value of Peggy’s 1/3 life estate can be calculated by actuarial tables so that Bud can offer to buy out Peggy’s interest in the ranch.

  4. Al’s separate property gun collection

    – Bud receives a 2/3 interest in the separate property gun collection and Peggy receives a 1/3 interest in the gun collection. If they cannot reach an agreement on how to split the gun collection, one can agree to buy out the other’s interest or they can sell the guns.

What do you think of this distribution? Is it what you expected? Is this how you would want your property distributed at death?

If you don’t have a Will and you’d prefer a different estate distribution for yourself, please consult an estate planning attorney.  He or she can help you create a customized estate plan that lets YOU control how YOUR assets pass at death. If you have any questions regarding this blog post or the services by Thrash, Carroll & Vanway Law Group, please don’t hesitate to contact us.