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WHAT HAPPENS IF YOU DIE WITHOUT A WILL?

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WHAT HAPPENS IF YOU DIE WITHOUT A WILL?

What happens if you die without a will is determined by a set of laws called “intestacy statutes”.

If you have a will, your will would go through “probate”, which would pay your debts, and transfer your assets to your heirs. Texas probate is straightforward and simple. If you don’t have a will, it is more complicated. Texas intestacy statutes determine who inherits your stuff.

MOST PEOPLE READING THE STATUTES WILL NOT BE ABLE TO FIGURE OUT WHAT HAPPENS IF YOU DIE WITHOUT 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. Third, the cost of probate where there is no will is significantly higher.

FOUR QUESTIONS HELP YOU FIGURE OUT WHAT HAPPENS IF YOU DIE WITHOUT A WILL.

To figure out who gets each item, or “asset” if you die without a will, there are four main questions you need to answer.

  1. Did you sign a contract that states who gets the asset?
  2. Is the asset real or personal property?
  3. Is the asset separate or community?; and
  4. What is your family situation at the time of your death?

Let’s take those questions one at a time.

DID YOU SIGN A CONTRACT STATING WHO WOULD INHERIT THE ASSET?

You have probably signed a lot of contracts that say what happens to something if you die. Here are just some possibilities:

  1. A beneficiary designation, such as those on IRAs, 401ks, and brokerage accounts.
  2. A beneficiary designation on a life insurance policy
  3. A survivorship agreement, such as those contained in most joint bank accounts
  4. A prenuptial agreement
  5. A remainder interest on a real estate deed
  6. A transfer on death deed (more about these later)
  7. a trust agreement

In most cases, any of those contracts will transfer title to the person you selected without probate, whether you have a will or not. For instance, if your will says you leave everything to your kids, but your IRA designates your spouse as the beneficiary, your spouse gets the IRA. What is in the will doesn’t affect that IRA. There are exceptions, so you should verify with an attorney that you have outright ownership, but the exceptions are rare. Most of the time, if a contact says who gets the asset on your death, that is what is going to happen.

For anything that you did not sign a contract for, we need to ask the remaining three questions to figure out what happens if you die without a will.

IS IT REAL PROPERTY OR PERSONAL PROPERTY

Real property is land, and anything permanently built on the land, like a building. Mineral rights are also real property. Pretty much everything else is personal property. Again, there are exceptions an attorney can help you spot, but this is a good general rule.

IS IT SEPARATE OR COMMUNITY PROPERTY?

If you are married when you die, Texas is going to assume that everything you own is community property. It will be up to your heirs to prove that it is not. There are three big reasons something you own may not be community property. First, if you owned it before marriage; second, if you inherited it; and third; if you received it as a gift.

Those are general rules. Detailed and extensive rules set out hundred of exceptions. If an asset is worth a lot, see a lawyer to verify if something is separate or community property.

If you’re not married at the time of your death, everything you own is separate property.

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