Mar 25, 2022
Is there an inheritance tax in Texas?
While there may not be an inheritance tax in Texas, your estate may be subject to the federal estate tax...read on to find out more.
The death of a close family member is a destabilizing and grief-filled time, and having to cope with the legalities of settling their estate after they’re gone can be confusing. Having to discover that your loved one died without making a will can intensify these feelings.
However, understanding the procedures that are required when there’s no will can provide ease of mind and inform you of the actions you need to take. Here's what you need to know.
If a person in Texas dies without having made a will, their estate and how it’s distributed will fall under Texas’ succession laws, which follow a very strict inheritance hierarchy.
The state of Texas determines who inherits on the basis of familial proximity. This means that a deceased’s spouse, children, parents, and siblings may all be eligible for certain percentages of the estate, depending on what familial configuration existed at the time of the estate holder’s death. Oftentimes the most immediate beneficiary will be the surviving spouse, followed by any adult children.
The probate court will also name an administrator to oversee the settlement of the estate. An administrator is basically the same thing as an estate executor, but simply for estates without a will.
The Texas intestacy laws dictate that the estate of a deceased without a will has to be distributed to their closest family. Depending on the size and type of assets, the estate has to go through the intestacy probate process. A small estate with assets under $75,000 doesn't have to go through the process, and an inheritor can proceed by filing a small estate affidavit to state their entitlement to a specific asset.
If you die without a will in Texas, you’re considered to have died intestate, and all of your assets are distributed according to the state’s succession laws, which follow a very strict inheritance hierarchy.
While that doesn’t sound too bad at first, it means that none of your specific wishes will be taken into consideration. Close friends and anyone not considered an immediate relative have no claim to your estate, no matter what was promised to them during your lifetime. That means that you have no control over how your assets will be distributed once you’re gone.
The Texas Intestate Succession Laws uses a statutory formula to determine how an estate will be distributed. Depending on the familial configuration at the time of the deceased's death, it implies that the next of kin, i.e., spouse, children, parents, and siblings, are all eligible for a certain percentage of the deceased's estate. Here follows a brief overview:
If the deceased leaves behind:
Grandchildren are usually eligible only if their parents (the deceased’s children) are deceased at the time of the testator’s death, but would have otherwise been eligible as heirs.
If the deceased left behind no spouse, parents, children, or siblings, then the state of Texas will continue going down the family tree. That means that, if a suitable heir can’t be found, nieces and nephews, grandparents, or aunts and uncles will be next in line. In the unlikely event that no living relative can be found, the deceased’s estate will “escheat” to the state of Texas, meaning that the state takes the assets.
As you can see, it’s in your and your loved one’s best interest to create a legally valid will in order to ensure that your wishes will be met and your assets will be distributed according to your plans. Have questions about how to create a valid will in Texas, or about estate planning in general? Reach out to ClearEstate for a free consultation to find out how we can help.