What Happens if You Die Without a Will?
If you die without a will, it won’t be your problem; it’ll be everyone else’s! Dying without a will is also known as dying “intestate.” It could mean that rather than leaving your heirs an estate, they inherit an expensive and confusing headache.
Three Steps to Decide Whether You Need a Will
Dying intestate means that you did not leave instructions about how you want to distribute your estate. Therefore it falls to the state of Texas to use its best judgment. Given a choice, most people would rather not rely on the state to figure out how to manage their estate. State succession laws frequently don’t match peoples’ actual wishes.
It’s essential to understand some basic Texas inheritance rules to determine whether this would affect you, your assets, and your family.
- First, what assets are covered by a will? You’ll want to know which of your assets are even controlled by your will—not all assets are! With a will, you can direct any assets that pass through probate.
- Once you know which of your assets go through probate, you need to decide whether the Texas inheritance rules fit your goals and wishes.
- Finally, you want to think about the probate process: how difficult do you want this to be for your spouse, children, and loved ones? Probate can be messy, expensive, and time-consuming, and emotionally draining. A will simplifies and streamlines this process.
Let’s consider each of these steps.
What Assets Have to Go Through Probate?
Probate is the legal process of identifying a deceased person’s assets, paying their outstanding debts, and distributing their assets to heirs or beneficiaries. It involves a court proceeding and can take anywhere from weeks to years.
Your will does not control assets that aren’t part of your “probate estate.”
Any assets that do not have named beneficiaries or other contractual distribution instructions are part of the decedent’s probate estate. These assets will pass in accordance with a will, or if there is no will, in accordance with Texas law.
What Assets Avoid Probate?
Any asset with a named beneficiary (like a life insurance policy, a retirement account, or an asset held in trust) passes outside of the probate process. By directly naming a beneficiary, these assets are passed on by contract rather than through a will. Therefore, they bypass probate and, in most cases, the court and the executors of the estate do not control how they are handled.
Texas Inheritance Laws
Without instructions from you, Texas law distributes your property amongst those it considers your heirs. The state will need to determine for each asset what type of property it is, who your heirs are, and how to distribute the asset. These decisions may not be in line with your true wishes.
Marriage and Community Property
Texas is a community property state, which means that most property acquired during a marriage belongs to both spouses. Different rules apply to property depending on whether it is considered community or separate property. This obviously has implications for how your estate will pass on, depending on whether you are married.
Although the general rule is that all property acquired during a marriage is considered community property, there are many exceptions to this rule. To further complicate matters, separate property could be subject to a reimbursement claim from the community estate beneficiaries.
For example, if real estate belongs to a decedent separately, but community property funds were used to pay down the mortgage, the community property beneficiaries may be entitled to reimbursement. These rules complicate the distribution process and require the estate administrator to refer to paperwork that they may or may not be able to find.
The state does its best to guess what you might have wanted, but community property rules can lead to unintended consequences without the clarity of a will. Often, community property laws result in loved ones getting left out of an inheritance. It can also be difficult for a surviving spouse to recover their share of separate property unless they can find the paperwork to prove how money was spent or assets acquired.
How Does the State Divide an Inheritance Among Heirs?
Even after estate assets are classified as either community or separate property, the estate administrator needs to determine who receives what share.
This process is, unfortunately, another court proceeding called a Determination of Heirship. Rules are different for personal property and real estate. Rules are also different if a decedent had children from a prior marriage or one of the decedent’s children died earlier.
How Are Assets Distributed?
Once heirs are determined and their shares of the estate calculated, their inheritance is distributed in accordance with Texas law, usually directly to the determined heirs. But there are several circumstances where this may not be the best course of action.
Why You Might NOT Want Heirs to Inherit Directly
- If any of your heirs are minor children or young adults not yet responsible for managing money or who have creditor claims.
- Because beneficiaries who are on public benefits would lose their monthly payments unless they inherit by way of a Supplemental Needs Trust (see the section on preserving heirs’ public benefits eligibility in our blog post Should You Set Up a Trust?).
- If multiple individuals inherit a single piece of real estate: it could make the management of that property difficult and subject it to collection from each persons’ debts and liabilities (a better option is to place the property in a trust or LLC).
Administering the Estate: The Probate Process
Probate proceedings can be lengthy and expensive. It’s often confusing and emotionally draining, and without a will, it can become much more complicated. In fact, two separate court proceedings are needed when no will exists.
First, a proceeding is required to determine the heirs of an estate. But court dockets are often full, and this can take many months, especially if it’s difficult to determine who heirs are or locate them. Any dispute to heirship also creates delays. Between court costs and attorney’s fees, probate gets expensive quickly; it can easily deplete the estate’s value.
Then, once heirs are determined, you’ll move into the administration phase. Without a will, your heirs will need to file additional documents to support the case, and the court may have to review most of the actions taken by the representative of the estate. This can add significant time and expense.
- Make sure that your estate gets distributed according to your wishes.
- To make sure the right people are treated as your heirs, you may need to disinherit people who would otherwise stand to inherit (such as an ex-spouse or family members who aren’t a part of your life).
- You need to specify that your partner should be treated as an heir if the two of you aren’t married—don’t assume that they will be treated as a surviving spouse.
- You may need a will to guarantee that grandchildren get an inheritance, make gifts and donations, or address any number of priorities that the law won’t recognize without a legal document like a will.
- Ease the burden on heirs.
- Probate is frustrating and expensive. A will simplifies and speeds up the process, minimizing any family fights about your estate, reducing the expense and emotional toll, and generally making it less of a headache.
- Assert your preference about who manages funds for the care of minor children.
- If you have children who are still minors, your will allows you to have a say in who manages assets for their health, education, maintenance, and support.
- Additionally, you can include a guardianship designation to appoint a trusted individual to take legal custody of your minor children if you pass away.
- The trustee managing funds for your children and the guardian you appoint can be the same person, different people, or even a married couple.
Unintended Outcomes of Dying Without a Will
Without a will, it’s up to the state to determine what happens to your assets. Don’t assume that state inheritance laws match your wishes—often, they do not.
State succession laws don’t necessarily prioritize the same things that you do. Community property laws may leave certain heirs with more or less than you intended or leave heirs out altogether. You may be closer to certain family members or have other reasons to want a particular family member to receive a larger share.
The state doesn’t care that one of your heirs has kids of their own and another does not. It’s even more problematic if you want your estate to go to someone outside your family. If you and your family aren’t close or you don’t have any living family, your estate will likely not go where you intend.
The state of Texas makes that decision for you. An estate—even a small estate—without a will is ripe for conflict, expense, and frustration for everyone involved. To avoid these complications and leave your heirs with clarity and security, a thoughtful will is all you need.
Don’t Procrastinate Creating A Will That Can Help Save Your Beneficiaries Time and Money
When people die without a will, usually it’s because they put it off, worried about the difficulty or the expense. But with the right help, creating a basic will can be straightforward and inexpensive.
Steven C. Holman
Holman Law, Estate Planning Attorney
I love to spend time with my wife and four children and serving the Dallas Fort Worth community. I provide clients with a wealth of knowledge and experience navigating each individual’s Estate Planning needs including Trusts, Probate, Elder Care Law, and Long Term Care Planning. My law firm specializes in assisting clients with complicated legal forms and qualifying for the maximum Medicaid and Veteran (VA) benefits in Texas.