Texas Inheritance Law | What you need to know - SmartAsset (2023)

Texas does not impose a state estate or inheritance tax. Most laws involving inheritance are straightforward. However, if you die intestate, the distribution of your estate will be left to the state's intestate probate process. Classifying an estate or heirloom can be tricky, but afinancial advisorcan help you create an estate plan for your family's needs and goals.

Does Texas have an inheritance tax or inheritance tax?

Not. There is no inheritance orproperty taxes in texas🇧🇷 The state repealed inheritance tax effective September 1, 2015.

That said, you will likely have to file some taxes on the deceased's behalf, including:

• Final federal and state personal income tax return:Each expires on the tax day of the year following the person's death.
• State/Federal Trust Income Tax Return:Due before April 15 of the year following the person's death.
• Federal Property Tax Return:Expiring nine months after the person's death, although an automatic six-month extension is available if requested before the end of the nine-month period. This is only required for individual properties that exceed a gross asset and a prior taxable donation amount of$12.06 million in 2022.

In order to file any of these wealth-based returns, you will need to apply for an Employer Identification Number (EIN) with the IRS. You canin line, fax or mail.

Dying in Texas

if you leave onetested willupon your death, you clearly and completely set out in writing exactly what you want done with your property. This includes appointing an executor or personal representative for the estate, heirs to your estate and legal guardians of children under 18. It also means creating testamentary trusts, which handle bequests to a beneficiary if the deceased doesn't want to. person receives these goods by a certain time. In Texas, having a will means it will almost always be executed exactly the way you want it. So inheritance laws really only apply to people who died without a valid will.

For estates greater than $75,000, the probate process kicks in to ensure that the deceased's will is carried out as it should be. The court appoints the executor named in the will to administer the estate. This implies not only protecting and distributing the deceased's assets, but also taking care of theirdebtsand passive.

No property worth less than $75,000 is required to pass through the court. Instead, after 30 days of the individual's death, the heirs can file a small estate affidavit with the court having jurisdiction over the estate. After court approval, heirs can use this declaration to purchase real estate assets.

Out of will or estate that has not been certified by the Texas courts within four years of the death of the deceased can be inherited through the use of an affidavit of inheritance. Someone who knows the deceased and his family, as well as a notary, must sign the document transferring the assets to the legal heirs of the deceased. For vehicles, a separate declaration of inheritance is available from the Texas Department of Motor Vehicles.

Dying without a will in Texas

Dyingno valid willleaves the distribution of assets to the state of Texas intestate probate process. Even a valid will of a deceased person can be considered intestate if you are unable to disperse all estate assets (possibly due to the death of a beneficiary or other extenuating circumstances) or if the will has been successfully contested by other parties. Unfortunately, even a will of a deceased person who passes away believing things were fully resolved can cause it to be declared invalid by the court after the fact.

In turn, a will without a will, because it has little or no pre-specified address, is inherited by a combination of spouse, children and/or relatives of the deceased. To differentiate between your belongings and who they should go to, Texas divides them into community property and separate property.

Community Property in Texas Inheritance Law

If you are married, any property you received during your marriage is considered common property and is therefore jointly owned by you and your spouse. However, inheritances and gifts acquired during marriage do not automatically become community property. However, mixing an inheritance or gift in a joint bank account with your spouse can nullify personal property rights and turn assets into common property.

Separate property under Texas inheritance law

Separate property belongs solely to you and is divided between real and personal property. Personal property consists of items that are not literally fixed in the ground, such as money, vehicles, investments, and memorabilia. Land and anything attached to it, such as family property, is real property.

Spouses in Texas Inheritance Law

In Texas, you don't have to go the traditional marriage route for the state to consider you married. to recognizesuit weddingsand therefore will grant inheritance rights to the common law spouse even if there is no marriage certificate attached to your relationship. To get a common law marriage in Texas, you must agree to be married to your spouse, be registered as married to other people, and live together in the state.

All common property will go to your surviving spouse if all your children are also yours. But if one or more of your children is not your surviving spouse, Texas will pay your children community property.

In this situation, Texas treats separate property differently. The state divides personal assets separately between your spouse and your children, with two-thirds awarded to all children and the remaining third to your spouse. Separate real estate is divided in the same way, but when the surviving spouse dies, the real estate is transferred to the children.

Texas laws on intestate wills for married people with no children are much simpler. The surviving spouse automatically receives all common property. Separate personal property also goes entirely to the surviving spouse, while separate real property is divided in half between the surviving spouse and the deceased's parents, siblings, or descendants of siblings, in that order. If there are no surviving parents, siblings or descendants of siblings, the spouse receives the rest of the real estate separately from the inheritance.

Children in Texas Inheritance Law

The biological children of the deceased and their spouse have some of the strongest inheritance rights to property in an intestate will. However, as of 2017, Texas courts ruled that adopted children receive the same inheritance rights as biological children, including inheritances from their adoptive parents, grandparents, and other family members. In recent years, Texas has opted to also include adult adoptees in this policy.

If you are not married, you will not have any common property as it is reserved for married couples only. Therefore, all of your properties will be considered separate by the Texas courts. However, intestate deceased persons in this situation who have children will leave all their separate assets to their children.

Stepchildren do not receive a share of your intestate property under the Texas inheritance plan. As the state sees no one related to you solely through marriage as the automatic heir, a stepchild's claim to your estate is null and void.

Children who were adopted or born after the execution of a parent's will, also known in Texas as pre-terminated children, have the normal inheritance rights of children. If the deceased parent has left no other way to support the child after his/her death, the child will receive part of the estate, regardless of whether or not he or she was originally named in the will.

Inheritance Rights of Illegitimate Children in Texas

The state of Texas has granted illegitimate children full child inheritance rights for over two decades. This gives them inheritances not only from their parents, but also from their parents' descendants and ancestors.

Childless Unmarried Individuals in Texas Inheritance Law

Estates of legally unmarried descendants with no surviving children go through a much longer probate process under Texas law. This hierarchy is specifically laid out in this order:

Texas non-inheritance estates

There are a number of financial accounts that don't quite fit your property. These require additional work to handle. Included in this arelife insurance policies, retirement accounts such as IRAs and401(k)s, joint accounts, and other payee-based accounts. If you want funds from these accounts to be included in your estate, you must title your estate as a beneficiary. However, if you fail to do so, the beneficiary listed on the account will inherit the funds.

Other Situations in Texas Inheritance Law

If the deceased's will includes an ex-spouse, Texas law invalidates anything that went to the ex-spouse. To avoid this, you will need to write a new will after your divorce with your ex-spouse if you still want to leave him or her anything after the fact.

A putative spouse is a person determined by the court who sincerely believed to be married to the deceased, even if legally this was not the case. To put this into a real-world situation, two people can be married without one of the spouses divorcing from a previous marriage, making the most recent marriage illegitimate and therefore the spouses merely putative. In Texas, these people have essentially the same inheritance rights as a legal spouse.

Deathbed marriages refer to when an individual marries someone who is about to die, not for love or partnership, but for a portion of his estate. So these are typically predatory in nature. As spouses typically have a strong interest in the deceased's estate, this can be a bone of contention for their families who realize that a deathbed marriage has taken place.

Texas law provides these families with a remedy to try to annul the marriage. Be sure to file a court case before the first anniversary of the death, or you may run out of time to annul the marriage. Only marriages that last three years or less are eligible for annulment under this law.

In short

Although Texas does not impose a state estate or estate tax, if you die intestate, your estate will be distributed through the state's intestate probate process. Intestacy laws only affect assets normally covered by a will, specifically assets that you own alone, such as real estate, stock market investments, businesses, and other types of physical property.

estate planning resources

• If you are trying to organize your estate or inheritance,financial advisorcan help you create an estate plan for your family's needs and goals.Ferramenta gratuita SmartAssetconnects you with up to three financial advisors serving your area, and you can interview their advisors at no cost to decide which one is right for you. If you're ready to find an advisor who can help you reach your financial goals,Start now.
• If you have considerable wealth,inheritance taxesat both the state and federal level can be considerable. However, you can maximize your loved ones' inheritancesgive away parts of your propertyin advance to the heirs, or even establish a relationship of trust.
• Inheritance is generally not considered income, but some inherited assets may have tax implications. Before Spending or Investing Your Inheritance Read Moreinheritance taxes and exemptions.

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