You Can't Take It With You
As an attorney and an estate settlement specialist I often gently remind our clients that once you pass away, you can’t take your business or assets with you! This article is to briefly discuss what may happen if you die in Texas without a basic estate plan. Finally, a few recommendations on basic legal documents we should have while we are alive.
Death affects people in many ways. It never is timely. Death confronts the family with bereavement, with the need to readjust emotionally and financially, and sometimes with an unknown future. Death is not only a personal issue but a legal one as well.
What is an estate is a valid question. An estate consists of the property, both real and personal, which the decedent owns at the time of death. Real property includes land and improvements located on the land. Real property also includes oil, gas, and other mineral interests.
Personal property is all property other than real property, including cash, bank accounts, clothing and personal effects (think of jewelry, guns, collectibles), household furnishings, motor vehicles, stocks and bonds, business interests, motor vehicles, stocks and bonds, life insurance policies, government, retirement, or employee benefits. Upon death, title to the decedent’s property passes immediately to the beneficiaries under the decedent’s will or to the heirs-at-law if the decedent dies without a will. However, there must be an actual transfer of ownership of the property by proving the will in court, or, if there is no will, by having a court determine who are the decedent’s heirs.
The purpose of court involvement is to protect the rights of the family, those entitled to receive property, and the creditors of the decedent’s estate. Therefore, although title to property passes immediately at death, the assets of the estate are subject to the control of the executor or administrator of the estate for the purpose of settling the debts of and claims against the estate. After the payment of debts and claims, the remaining assets are distributed to the decedent’s beneficiaries or heirs-at-law. If the decedent died with a legally valid will, then her property is distributed according to her wishes as expressed in the will. If the decedent died without a will or if the will is declared invalid, the estate is distributed to the decedent’s heirs as determined under Texas law. Dying without a will can lead to an unwanted outcome. The decedent’s heirs may not be the persons to whom the decedent wished for her property to pass.
In Texas, property is characterized as separate or community. Separate property is that which is owned before marriage or acquired during marriage by gift, inheritance, or a personal injury award. Community property is all property which is acquired by either spouse during marriage. When a person dies without a will, the law determines who are the heirs, and assets are disposed of according to whether they are community or separate property.
At a minimum, visit with an attorney to discuss a basic estate plan that includes a Will, Medical Power of Attorney, Statutory Financial Power of Attorney, and a Directive to Physician (commonly called a Living Will).
For more information about Broadway Bank, visit broadway.bank.