If you don’t have an estate plan, Texas law has one for you. The state’s plan determines who gets your property based on their relationship to you and the type of property you own.
Example: Bill and Julia have been married for twenty years. Together they have a son and a daughter. Bill also has two children from a prior relationship. Bill and Julia have approximately one million dollars in community assets. They each want their community property to go to the other upon the death of the first. They believe Texas law automatically gives the community property share of each of them to the other at death without them having to do anything. Because of this belief, Bill and Julia never get around to creating an estate plan.
Bill dies without even a simple will. What happens to Bill’s half of the community property he owns with Julia? Does it automatically go to Julia as he expected it would under Texas law? It doesn’t. Bill’s half of the community property he owns with Julia goes to all four of his children in equal shares. Each of his children gets one-fourth of his one-half of the community property ($125,000 for each child). Julia keeps her one-half of the community estate ($500,000) but gets none of Bill’s community half ($500,000).
Bill and Julia’s failure to create an estate plan results in a division of their assets in a way they didn’t want. They could have easily changed this result by having an estate plan that includes, at a minimum, a simple will or, for better protection, a Family Trust.