In Part Two of this series, we considered some of the main tools used in estate planning, including wills and trusts, which serve to protect an estate and ensure distribution according to a decedent’s wishes. But what happens when a person dies without a will?
When a person dies intestate, the distribution of their estate is governed by state law. Personal property is distributed based on the law of the state where the decedent resided at death (domicile), and real property is distributed based on the law of the state in which the property itself is located. The laws of intestate succession designate the decedent’s legal heirs and define the portion of the decedent’s estate that each heir inherits. (1)Absent an agreement, state law also determines whether property is part of the community estate or separate estate.
Consider the law governing intestate distribution of real property in Texas. In Texas, if a person dies intestate and leaves behind a spouse and children of that marriage, real property would be divided as follows: all community property goes to the surviving spouse, and 1/3 of separate property goes to the surviving spouse for their life (i.e., a life estate interest), and the remaining 2/3 of the separate property would vest in the children. When the surviving spouse dies, the life estate interest in the separate property would vest in the children. (2) If the decedent left a surviving spouse and children born outside of that marriage, the separate property would vest in the same manner, but community property would be divided in half: 1/2 to the surviving spouse, and 1/2 to the children. (3)The decedent’s date of death is also determinative: the real property of a married person with children (whether or not they are from the current marriage) who died before September 1, 1993 is distributed according to the Texas Probate Code: community property is split between the surviving spouse (1/2) and children (1/2). Separate property is distributed in the same manner as described above. (4) Distribution becomes even more complicated where the decedent was a single or widowed person or was married without children. The Estates Code provides that the property is divided between surviving spouses, children, parents, and siblings, and even grandparents and aunts and uncles, depending on the situation. (5)
Title to estate property vests immediately in the decedent’s legal heirs (6)and remains subject to debts owed by the decedent. (7)The entire estate of an intestate decedent is liable for any lifetime debts incurred by the decedent, all estate taxes, and any other expenses, such as funeral expenses. Where an estate owes two or more debts, an administration is necessary, which delays the vesting of title in the decedent’s heirs and allows a court–appointed administrator to liquidate estate assets to pay off debts and expenses. Where liquidation occurs, property which otherwise would have gone to a family member could be sold out of the estate.
An estate plan allows you to avoid leaving your family to navigate the complicated, sometimes chaotic, laws of intestate distribution. Kuiper Law Firm, PLLC offers comprehensive estate planning services. If you have any questions about how to protect your assets or plan for the future, do not hesitate to contact us.
In our next and final installment in this series, we will consider estate planning for a unique form of property: digital assets.
- 1 Texas Probate, Estate and Trust Administration § 11.01 (2020).
- Texas Estates Code § 201.003(b)(2) and § 201.002(b).
- Texas Estates Code § 201.003(c) and § 201.002(b).
- Texas Probate Code § 45 and § 38(b)(1).
- Texas Estates Code §§ 201.001-201.003.
- 24 Dorsaneo, Texas Litigation Guide § 391.01 (2021).
- Texas Estates Code § 101.051.
- 1 Texas Probate, Estate and Trust Administration § 13.01 (2020).