What to Know About Inheritance Laws in Texas

What to Know About Inheritance Laws in Texas

Last Updated on March 12, 2024 by admin

Did you know that fewer than half of all Americans have a living will in their name? While this statistic might not seem that startling, it’s concerning for anyone that knows about estate planning and inheritance laws.

Without a will in place, the question of inheritance can become a thorny issue. So, what should you know about inheritance laws in Texas? And what can you do with estate planning to make sure that your money goes where you want it?

If you want to learn the answer to these questions and more, you’re in the right place. In this guide, we’ll teach you everything you need to know about inheritance laws in Texas.

Inheritance Through Marriage in Texas

All property owned by married couples in Texas generally falls into two distinct categories: community property and separate property. Community property refers to property that was purchased during the marriage.

As such, it belongs to both spouses. In the event of a divorce, this type of property would be divided between the couple. Separate property, on the other hand, refers to property that only belongs to one member of the couple.

Usually, this type of property was purchased before the marriage took place. When a member of the couple receives property, either as a gift or through inheritance, it’s considered separate property.

That means that it’s not divided in the event of a divorce. However, there is an exception to this circumstance. If the individual puts the money into community property, it ceases to be separate property. Instead, it becomes community property.

Keep in mind that these marriage laws also refer to informal marriages. These types of unions are known as a common-law marriages.

However, for legal purposes, it makes it a lot simpler if there’s a legal record present, like a formal declaration of information marriage.

Inheritance Through a Will in Texas

If there’s a will, the document will lay out how the property and assets are distributed to the surviving family member. But, it’s important to note that wills in Texas require any surviving spouse to receive at least half on any community property owned by the couple.

So, what happens if the will doesn’t give the spouse this legally required amount? In this event, the surviving spouse can file for the right of election.

This legally provides them with the amount of property even if the will doesn’t state it. The issue can get complicated if a couple divorces, but there’s still an existing will in place. If an inheritance is left, but the couple divorced, Texas invalidates it.

That means the surviving divorcee won’t get the property. If you still want to leave property to an ex-spouse, it’s entirely possible. But, you will need to craft a separate will. The original one will not work.

Inheritance Without a Will in Texas

Without a will in place, inheritance can get tricky in Texas. However, there are still Texas inheritance laws in place to decide how assets will be divided. Specifically, these laws are dictated by intestate succession.

How the property will be divided up depends on whether it’s separate property or community property. Let’s started with separate property.

According to intestate succession, if there is a surviving spouse, and no children, all of the property goes to the spouse. If there is a surviving spouse and surviving children, the property is divided between them.

Specifically, the spouse gets one-third of the property and the children get two-thirds of the property. Community property tends to favor the surviving spouse. If there are no children, then the spouse receives all of the property.

If the spouse has children from the marriage, they will still receive all of the property. The only time things get muddy is when the deceased had children from another marriage.

When this happens, the community property is divided between the spouse and the children from the other marriage. Specifically, the other children receive half of the community property and the spouse receives the other half.

Does Texas Have an Inheritance Tax or an Estate Tax?

The good news is that Texas repealed laws requiring an inheritance tax or estate tax in 2015. So, you won’t need to spend a huge chunk of your inheritance on taxes. However, there are still some taxes you will need to file. Most of these will be on behalf of the deceased.

First, you will need to file federal and state income tax returns for the deceased. These are due by tax day on the year following the individual’s death.

You will also need to file an estate income tax return by April 15 of the year after the individual’s death. Finally, you will need an estate tax return. This is due nine months after the death of the individual.

However, if you need a six-month extension, you can ask for one. If you’re worried about the estate tax, you can avoid it by selling any real estate you inherit as soon as possible.

We recommend a seller that specializes in selling inherited homes, like Capstone Homebuyers. They know you’re on a tight schedule to sell, so they can walk you through the process as quickly as possible.

Enjoy Learning About Inheritance Laws in Texas? Keep Reading

We hope this article helped you learn more about inheritance laws in Texas. As you can see, inheritance laws in the state can get confusing, even with a will in place.

So, if you need any help with your estate planning, make sure to contact a professional today.

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Sophia Anderson
Sophia Anderson is a finance writer and blogger with a passion for helping people improve their financial literacy. With over 5 years of experience in the finance industry, Sophia has worked with individuals, families, and small businesses to provide financial advice and guidance. Her expertise includes budgeting, saving, credit management, and debt reduction. Sophia is dedicated to breaking down complex financial concepts into easy-to-understand language and empowering her readers to make smart financial decisions. She is a frequent contributor to financial publications and has written extensively on topics such as personal finance, investing, and financial planning. Sophia's mission is to help people take control of their finances and achieve financial security and freedom. When she's not writing, Sophia enjoys hiking, practicing yoga, and reading personal finance books.