WHAT HAPPENS IF YOU DIE WITHOUT A WILL?

By Kirk R. Wilson, J.D., LL.M.

What happens to the estate of a person who passes away in Texas without a Will? In order to answer this question we need to know if this person was married or single, if he or she has living children or grandchildren, what assets the person owned, and how title to those assets was held. All of this information is necessary in order to figure out who gets what, and as you will see, in most cases having a Will produces a much better result.
Contract Assets. For example, if the decedent owned life insurance, the policy proceeds are payable to the designated beneficiary or beneficiaries. Similarly, if the decedent had an IRA or other retirement account, that account is payable to the designated beneficiaries. This would be true even if the decedent had a Will, since these contract assets pass directly to the designated beneficiaries outside of probate.
This also applies to bank and brokerage accounts, and real estate, that is held by the decedent and one or more other individuals as “joint tenants with right of survivorship”. Joint tenancy property passes automatically, by operation of law, to the surviving joint tenant or tenants. Again, even if the decedent had a Will naming other beneficiaries, it would have no impact on the joint tenancy property.
So joint tenancy assets, life insurance, and retirement plans all pass outside of the probate process. The same is true for assets held in a trust which also pass directly to the named beneficiaries outside of probate.
Probate Assets. With a few exceptions, the assets that do not pass by beneficiary designation or operation of law are administered through a court-supervised probate process. The disposition of these assets is governed by the Texas laws of intestate succession, which apply when someone dies without a Will.
Unmarried Decedent. The laws of intestate succession provide that if a decedent is not married, his or her probate estate passes first to children and descendants of deceased children. For example, if there are two living children and a deceased child survived by his or her two children, then one-third of the probate estate will be distributed to each living child, and one-sixth of the estate will be distributed to each of the two grandchildren whose parent is deceased.
If there are no children or issue, then the estate goes in equal shares to the decedent’s parents. If one parent is deceased, half of the estate goes to the surviving parent and half goes to the decedent’s siblings or the children of any deceased siblings, if any, otherwise it all goes to the surviving parent. For example, if only one parent is living and there is one surviving brother and a deceased sister who is survived by two children, then half of the probate estate would pass to the surviving parent, one-quarter to the surviving brother, and one-eighth each to the two children of the deceased sister.
If both parents are deceased, the entire estate passes to the decedent’s siblings or their descendants. If there are none, then half of the estate passes to the decedent’s maternal grandparents or their descendants, and half to the decedent’s paternal grandparents or their descendants.
Married Decedent’s Community Property. If the decedent was married and leaves a surviving spouse, we need to know which assets are community property and which are the deceased spouse’s separate property. This is because under the laws of intestate succession the surviving spouse is entitled to receive the deceased spouse’s share of the community property with one exception. If the decedent is also survived by children (or descendants) who are not also the children (or descendants) of the surviving spouse, then half of the decedent’s share of the community property passes to the surviving spouse and half passes to the decedent’s children or descendants.
So, if a decedent is survived by a spouse as well as two children from a previous relationship, then one-half of the community property passes to the spouse and one-fourth passes to each of the two children.
Married Decedent’s Separate Property. With regard to the decedent’s separate property, if there are no children or other descendants living, then all of the personal property and one-half of the real property goes to the surviving spouse, and the remaining one-half of the real property passes by the intestacy rules explained above that apply when a decedent does not have a surviving spouse.
For example, if a decedent never had children and is survived by a spouse and parents, one-half of his or her separate property passes to the spouse and one-quarter to each parent.
If there are surviving children and a spouse, the decedent’s separate property is divided between the surviving spouse and the children as follows: the surviving spouse takes one-third of the personal property and a life estate in one-third of the real property. Two-thirds of the personal property and the remaining interest in the real property is given to the children or their descendants.
So, if a decedent leaves a surviving spouse and two children, and has an estate consisting of a homestead, a brokerage account, and a bank account (all in his or her own name), then the spouse is given one-third of the bank and brokerage account assets, and the right to use and occupy one-third of the homestead for life. The children each receive one-third of the bank and brokerage account assets, and the entire homestead subject to the spouse’s right to use and occupy one-third of it for life.
What a spouse can do with a life estate in one-third of the homestead is an interesting question. And again, these intestacy rules only apply to those assets which are subject to probate.
Distributions to Minors. If assets are to be distributed to a minor, a guardian will need to be appointed by the court to receive, hold and manage the minor’s inheritance until the minor reaches the age of 18, at which time the court-supervised guardianship proceeding will terminate and the assets will be turned over to the newly-minted adult.
Probate Process. Without a Will that names an executor, an interested person (the spouse, an adult child, or a friend) will need to file an application for probate to be appointed as Administrator of the decedent’s probate estate. The Administrator will normally be required to post a surety bond, and to administer the estate with close court supervision, rather than the simplified probate process permitted when there is a Will naming an independent Executor. At the conclusion of the probate proceeding and payment of the decedent’s debts and expenses of administration, the remaining probate assets will be distributed to the intestate heirs.
Conclusion. The State of Texas has a one-size-fits-all estate plan for those who do not have a Will (or a living trust). This plan may produce an acceptable result in some cases, but for most it provides a poor substitute for a well-thought-out estate plan.

[The author is a Woodlands-based estate planning attorney at the firm of O’Donnell, Ferebee, Medley & Frazer, P.C. He is licensed to practice law in Texas and California, is a board-certified probate, estate planning and trust law specialist in California, and holds an advanced law degree (LL.M.) in taxation. He can be reached at (281)875-8200. The firm’s website is www.ofmflaw.com.]

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