Probate is the legal proceeding that transfers ownership of assets belonging to a deceased person into the names of their heirs. If you have a will, Texas probate is straightforward and simple. Your assets will be distributed to the people you have chosen to receive them. If you don’t have a will, it is more complicated. Texas has passed laws, known as ‘intestacy statutes’ which dictate who should inherit your stuff if you haven’t left a will. There are a few problems with these statutes: first, most people reading them will not understand them, second, Texas has probably not distributed your property the way that you want it distributed, and third, the cost of probate where there is no will is significantly higher.
To figure out who would get someone’s property if they die without a will, there are four main questions you need to answer.
- Did the deceased person sign a contract that controls who gets the asset?
- Is the asset real or personal property?
- Is the asset separate or community?; and
- What is your family situation at the time of your death?
Let’s take those questions one at a time.
Did the Deceased Person Sign a Contract Stating who would inherit the assets?
Contracts governing ownership of assets at death are extremely common. Here are just some of the contracts the deceased person might have signed:
- A beneficiary designation, such as those on IRAs, 401ks, and brokerage accounts.
- A beneficiary designation on a life insurance policy
- A survivorship agreement, such as those contained in most joint bank accounts
- A prenuptial agreement
- A remainder interest on a real estate deed
- A transfer on death deed (more about these later)
- a trust agreement
In most cases, any of the contracts listed above will transfer title to the designated person without probate and without a will. If there is a will, and it says something different than what the contract says, the contract is going to be controlling. There are exceptions, so you should verify with an attorney that you have outright ownership, but the exceptions are rare. If the asset you are concerned about is governed by a contract like one of these, most of the time, you don’t need to read any further. The contract is going to control.
Who gets the Property if there is no Contract?
For anything that you did not sign a contract for, we look at the intestacy statutes. To understand how the intestacy statutes are distributing your property, you need to be able to identify if the property is real property or personal property, and you need to know if it is separate or community property.
Is it Real Property or Personal Property
Real property is land, and anything permanently attached to the land, like a building. Mineral rights are also considered real property. Pretty much everything else is personal property. Again, there are exceptions, so speak with an attorney, but this is a good general rule. So look at the circle below, and decide which half of the circle the asset your thinking about belongs in.
Is it Separate or Community Property?
Texas is going to assume that anything owned by a married person at the time of death is community property. There are three big exceptions to this rule. If you owned property prior to the marriage, it is separate property. If you inherited the property, even during your marriage, it is still separate property. If you received it as a gift, it is separate property. The rules dividing separate and personal property are extensive and detailed. If there is significant value, see an attorney to be sure, but for the most part, if it is owned by a married person, it is community property unless they owned it prior to the marriage, they inherited it, or they received it as a gift. If you’re not married at the time of your death, everything you own is separate property. So again, look at the circle below, and decide if the asset you are concerned about is likely to be separate property, or community property.