What happens to a Texas family's house, accounts and children if there is no will

The assumption that the state will sort it out sensibly

You own a house, or most of one. You have a retirement account, a checking account and some savings. You may have children who are still minors, or grown children and a second marriage. You assume that if something happened, your spouse would get everything and would take care of the kids, because that is obviously what you would want.

I practice estate planning law in Dallas, and the reason I write this is that the assumption is often wrong in ways that surprise families at the worst possible time. When there is no will, Texas law decides who inherits, by formula, and the formula does not know your family. It applies the same rules to everyone.

This guide walks through what happens to the main pieces of a typical estate when there is no will, what the family has to do to get through it, what a basic plan consists of, and how to go about getting one done. It is general information, not advice about your situation, which a licensed attorney would need to hear in full.

What Texas does with each piece when there is no will

When someone dies without a will, their property passes under the state's intestacy rules. Texas is a community-property state, so the first question for a married person is which assets are community property, generally acquired during the marriage, and which are separate, generally owned before the marriage or received by gift or inheritance. The rules treat the two categories differently, and the result depends heavily on whether the deceased had children and whether all of those children are also the surviving spouse's children.

That last point is where families are most often caught. In a blended family, the surviving spouse may not inherit the deceased spouse's entire share of the community property, and the house can end up co-owned by the spouse and the children from a prior relationship. Separate property follows its own rules, and real estate held as separate property may pass largely to children with the spouse holding a lesser interest. The details change with the family tree, which is why a formula written for everyone fits almost no one well.

Some assets do not go through the will or the intestacy rules at all. Retirement accounts and life insurance generally pass to whoever is named as beneficiary on the account, regardless of the will or the lack of one. Accounts with a payable-on-death or right-of-survivorship designation pass to the named person. That can be a relief, or a problem, if the beneficiary form still names a former spouse or a parent who has since died.

• Community property and separate property are treated differently
• A blended family can leave the spouse co-owning the house with stepchildren
• Children inherit shares by formula, including minors
• Retirement accounts and life insurance follow the beneficiary form, not the family's wishes
• Accounts with survivorship or payable-on-death designations pass outside probate

What happens to minor children, and to money left to them

A will is where a parent names who should raise their children if both parents are gone. Without one, a court decides, based on what it determines is in the children's best interest, with relatives often stepping forward and sometimes disagreeing. The court may choose the person you would have chosen, or may not, and the process is hard on a grieving family.

Money is the second issue. A minor cannot simply receive an inheritance. When a child inherits by formula, the funds typically have to be managed for the child under court oversight until the child reaches adulthood, and then the child receives the balance outright at an age when most of us were not ready to manage a large sum. A will can instead direct that a child's share be held in a trust, managed by a person you choose, with distributions for education and support and the remainder released at an age and in a manner you decide.

What the family has to do: a plain picture of probate without a will

With or without a will, an estate that includes real estate and accounts in the deceased's sole name generally has to go through some form of court process to transfer title. In Texas, that is handled in the probate or county courts. Without a will, the court first has to determine who the heirs are, which involves evidence about the family and, typically, the appointment of an attorney to represent any unknown heirs. Then someone must be appointed to administer the estate.

Texas allows a relatively streamlined form of administration called independent administration, which reduces court supervision and cost, but when there is no will naming an independent executor, obtaining it usually requires the agreement of all the heirs. If an heir is a minor, missing or uncooperative, the family may be left with a more supervised, more expensive and slower process. A will that names an executor and authorizes independent administration avoids most of that. In my experience, families underestimate what the absence of a will adds in time and money.

• Court determination of heirs, with an attorney appointed for unknown heirs
• Appointment of an administrator, often requiring a bond
• Independent administration only if all heirs agree
• Delays in selling or refinancing the house while title is unsettled
• Costs that come out of the estate before anyone inherits

What you can gather and decide before meeting an attorney

Start with an inventory. List what you own and roughly what it is worth: real estate and how it is titled, bank and investment accounts, retirement accounts, life insurance, business interests, vehicles, and anything else of value. For each account, find out who the current beneficiary is. Many discover a form from a first job that still names a parent or a former partner. Note your debts too, including the mortgage.

Then make the people decisions, which are harder than the property decisions. Who should inherit, and in what shares? Who would raise your children? Who should manage money for them, and until what age? Who should make medical decisions for you if you cannot, and who should handle your finances? Who would you trust to serve as executor? A first draft of each makes the meeting with an attorney productive. Finally, gather any existing documents, including an old will, a prior trust, divorce decrees and prenuptial agreements, because all of them affect the plan.

• An inventory of assets, how each is titled and who the beneficiary is
• A list of debts, including the mortgage
• Your first choices for heirs, guardian, trustee and executor
• Your choices for medical and financial decision-makers
• Existing wills, trusts, divorce decrees and marital agreements

When waiting is understandable, and when it is not

If you are single, young, own little and have no children, the intestacy rules may produce roughly what you would want, and a simple will plus powers of attorney is still worth doing but is not an emergency. Everyone else has less time than they think. Marriage, a child, a house, a blended family, a business, an aging parent you care for, a diagnosis, or a child with special needs each changes the picture, and each is a reason to act now rather than after the next busy stretch.

Documents also age. A will written before a divorce, a remarriage or the birth of a child may no longer say what you want, and in some situations may no longer be effective as written. If your documents are more than a few years old or your life has changed since you signed them, a review is in order. I meet with people in Dallas and the northern and eastern suburbs in all of these situations.

What a basic estate plan consists of and how it gets done

For most families, the foundation is a will that names an executor and authorizes independent administration, names a guardian for minor children, and leaves property to the people you choose, with a trust for any share going to a minor or to someone who should not receive a lump sum. Alongside it are a durable power of attorney for finances, a medical power of attorney, and an advance directive stating your wishes about life-sustaining treatment. Some families benefit from a revocable living trust, which can avoid probate for assets it holds and is useful for out-of-state property or for keeping matters private, but it is not necessary for everyone.

The process generally runs like this. We meet and talk through your family, your property and what you want to happen. I explain the options and recommend a structure. I prepare drafts and we review them together until they say what you mean in language you understand. Then the documents are signed with the formalities Texas requires, you receive originals and copies, and we go over which beneficiary forms and titles need to be updated to match.

• A will naming an executor, a guardian and a trust for young or vulnerable heirs
• Durable power of attorney for finances
• Medical power of attorney and advance directive
• A revocable trust where it fits the family or the property
• Beneficiary designations and titles updated to match the plan
• A review whenever the family or the property changes

What affects the cost, and how to choose an attorney

The cost of a plan depends on its complexity, not on the size of the estate. A married couple with children, a home and ordinary accounts is at the simple end. Blended families, business interests, real estate in more than one state, a child with special needs, or a desire to control how and when heirs receive money each add provisions and time. A trust-based plan costs more than a will-based plan. Specific fees are something to confirm directly with the attorney you meet; I discuss mine at the first conversation, once I understand what is involved.

When choosing an attorney, look for someone whose practice is focused on estate planning and probate rather than someone who does it occasionally, because the details are where plans fail. Ask whether they will explain each document to you in plain terms, whether they help with beneficiary and title updates, and whether they handle probate as well, since the attorney who understands how estates are administered writes documents that administer well. Expect to be asked a lot of questions about your family; that is a good sign.

• A practice centered on estate planning and probate
• Plain explanations of each document
• Help coordinating beneficiary forms and titles
• Experience administering estates, not only drafting
• Direct access to the attorney
• Fees discussed openly at the first meeting

Mistakes I see, and what happens after you call

The most common mistake is doing nothing because the decisions feel too big. A good plan now can be changed later; no plan cannot be fixed after the fact. The second is relying on a form from the internet, which may not meet Texas requirements or address community property, blended families or minor children properly. The third is signing a will and never updating beneficiary forms, so the retirement account goes to someone the will never mentions.

When you contact me, we set up a time to talk at my office in the Lake Highlands area of Dallas or by phone. You tell me about your family and your property. I explain what Texas law would do without a plan and what I would recommend instead, with the cost. If you decide to proceed, we move through drafts, review and signing at a pace that fits you, and you leave with documents you understand and a list of the follow-up items that make them work. If you have recently lost a spouse or parent, the same first conversation covers what the estate will require and what comes next.

Questions people ask me