Death without a Will or Trust
Note: This article is written based upon current Texas law, other States have similar provisions, but the details may vary slightly from State to State. Check with a local attorney specializing in Wills, Trusts, and Estates for your specific State laws.
In understanding what REALLY happens when someone dies in Texas without a Will or Trust (intestacy), let’s first look at the case of Sam, a single person who recently died.
Sam recently passed away. He was unmarried and he did not have children during his lifetime, so there are no descendants to receive Sam’s property. Sam is survived by his father, Frank, his two brothers, Bill and Bobby, and his sister, Susan. Sam’s mother, Madison died before Sam.
Under Texas’ laws of intestacy, had both Frank and Madison (Sam’s parents) had outlived Sam, then his property would pass to his parents in equal portions each. But, Madison predeceased Sam, and therefore things get a little more complicated.
Sam’s brothers and sister now enter into the equation. Sam’s property will still be split in half. Frank, Sam’s father, will receive one half of Sam’s property. The other half of Sam’s property will be split into three equal portions for his siblings: Bill, Bobby, and Susan. Each of them will receive 1/6 of Sam’s property.
Sound like fun? In one of our upcoming blog entries, we will discuss Susie, also single, who recently passed away with three living adult children and one deceased child. Stand by to see how her property flows without a will or trust.
The vast majority of people in the United States live and die without even a simple Will or any other estate planning document in place, whether due to a lack of knowledge, apathy, or choice. Yet, most people probably could not articulate the consequences of dying without a Will or Trust.
In our practice, at least twice a month, we are confronted with a call or question about what happens to property when a person dies without a Will. Our answer is always the same: “it depends”. Although this answer is not practically helpful to the person asking the question, it is completely accurate. The distribution of property when someone dies without a Will, in Texas, depends on several factors about the person’s family, marital status, and ownership of property.
Another answer we could easily give and which is usually correct would be: “We are not sure where the property goes without more knowledge of the situation, but it is probably not to who you want it to go or in the way you want them to receive it.” With this in mind we discuss the topic of dying without a Will, Trust, or other instrument, and its legal, technical term intestacy, over the next several blogs.
Understanding Intestacy; or Dying without a Will or Trust
To understand intestacy, it is important to first understand what items are subject to intestate distribution. Basically, those assets a person owned at death that did not have a beneficiary designation (such as life insurance, retirement plans or annuities) or are not controlled by a contract (such as a joint bank account owned with “rights of survivorship”) are subject to intestate distribution. This may encompass assets like real estate, bank or investment accounts, closely held business, stock or other forms of property.
We would specifically point out that in most cases where people own real estate in Texas – even married couples – the property does not pass automatically to the surviving owner upon the death of one of the owner. The survivor will almost always need to take action on this deed. This is by far the most misunderstood issue regarding dying without a Will in Texas.
Stay tuned to our Blog as we help you sort out the issues.