Who needs estate planning in Texas?
Estate planning is an important tool for helping you decide who will receive your property and how to distribute your assets after death. Estate planning also covers certain requirements in the event you become incapacitated, such as who will make medical or financial decisions on your behalf.
Essentially, anyone with property, a business, a minor child, or concerned about possible incapacity should inquire about estate planning. If you have any valuables that you want a specific person or organization to receive when you pass away, then estate planning is significant enough to inquire about.
What are the Advantages of Estate Planning in Texas?
There are several legal documents attorneys can draft to set out your wishes and appoint the person you choose to distribute your property as well as make decisions on your behalf if you become incapacitated.
There are many benefits to planning ahead. Below is a list of a few of the advantages to Estate Planning in Texas:
● Choose the person you trust to carry out your wishes,
● Distribute your assets to the beneficiaries whether individuals or organizations of your choice
● Minimize future expenses to the estate and leave more money for your love ones,
● Ease the burden on your beneficiaries,
● Outline financial and medical decisions in you become incapacitated,
● Minimize tax burdens, and
● Establish Trustees over your estate.
What if I choose not to have a will?
When you die without a will, also known as intestate succession, the State of Texas decides how your assets are distributed. The Texas Estate Code Section 201 lays out the applicable rules on how property is distributed without a will.
The Default Texas Rule for Intestate Succession for Heirs:
Depending on your marital status and whether you have children, Texas lays out how your assets are distributed.
Below are different scenarios for single individuals:
● Single with no children, parents, and no siblings - If you’re single and have no children, your estate will pass to your parents equally.
● Single with no children, no siblings, and one parent - If you only have one parent alive, and no siblings, your estate passes to your living parent.
● Single with no children, siblings, and one parent - and If you have one living parent and siblings, half of your estate passes to your living parent and half is divided among your siblings and deceased sibling’s descendants.
● Single with no children, no parents, and siblings - If both parents are deceased, your estate passes to your siblings and deceased sibling’s descendants.
● Single with no direct descendants - If no living parents, siblings or deceased sibling’s descendants, half of your estate passes to your mother’s side and half passes to your father’s side. If either side of the family are all deceased, the estate passes to the surviving side.
● Single and no heirs - The estate passes to The State of Texas if neither side of the family is alive.
● Single with children - If you’re single and have children, your estate passes to your children equally. If you have grandchildren, they will not inherit your estate unless their parent (your child) has passed away.
Below are different scenarios for married couples:
In Texas, upon divorce or death, the presumption is all property acquired during the marriage is community property.
● Spouse with no children - Your spouse gets 100% of your community property.
● Spouse and children who are also your spouse’s children - Your spouse gets 100% of your community property.
● Spouse and stepchildren of your spouse - ½ of your community property passes to your spouse and the other ½ passed to your children.
● Spouse and parents - Your spouse gets 100% of your community property.
● Spouse and siblings w/no parents - Your spouse gets 100% of your community property.
Separate Property is property owned before marriage, acquired during marriage by gift, inheritance, or recovery for personal injury except for loss of earning capacity during marriage.
● Spouse with no children -Surviving spouse inherits ½ separate personal property and the remaining ½ to parents and siblings.
● Spouse and children who are also your spouse’s children - Spouse gets ⅓ separate personal property, and life estate to real property. Children will inherit everything else.
● Spouse and stepchildren of your spouse - Spouse gets ⅓ separate personal property, and life estate to real property. Children will inherit everything else.
● Spouse and parents - Spouse gets all your separate personal property, ½ of your separate real property. Parents inherit everything else.
● Spouse and siblings w/no parents - Spouse gets all separate personal property and ½ of real property. Sibling inherits everything else.
To learn more about the Texas estates code and property division upon death, contact us for a consultation here.