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

Texas Inheritance Law | What you need to know - SmartAsset (1)

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 There is no inheritance orproperty taxes in texas🇧🇷 The state repealed inheritance tax effective September 1, 2015.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.

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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

Texas Inheritance Law | What you need to know - SmartAsset (2)

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.

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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.

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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.

Succession without testament: spouses and children
inheritance status Who Inherits Your Property?
-If you are a spouse but not parents, siblings or children -All assets for the spouse
-If spouse and children from the relationship with the spouse -Participation of the deceased in the property common to the spouse
-All real personal assets for lifetime spouse, then children
-1/3 of the personal assets separated from the spouse
-Balance of inheritance to children
-If the spouse and children are not related to the spouse -Participation of the deceased in community property for the children
-2/3 of the personal assets separated from the children
-Balance of personal assets separated from the spouse
-All real personal assets for lifetime spouse, then children
- If spouse and parents -Participation of the deceased in the property common to the spouse
-All personal assets separated from the spouse
-1/2 of the spouse's separated real estate
-Balance of properties separated from parents
-If you are a spouse and siblings but not parents -Participation of the deceased in the property common to the spouse
-All personal assets separated from the spouse
-1/2 of the spouse's separated real estate
-Balance of properties separated from siblings

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:

Intestate succession: extended family
inheritance status Who Inherits Your Property?
-If there are no children or spouse -1/2 of the assets to each parent
-If only one of the parents -1/2 of inheritance to parents
-1/2 of the inheritance divided equally between siblings
-If there are no parents -Equity divided equally between siblings
-If there are no siblings - Assets divided equally between nieces and nephews
-if not nieces and nephews -1/2 of the inheritance to maternal grandparents
-1/2 of the inheritance to the paternal grandparents
-If only grandparents on one side -Half of that side is split evenly between aunts, uncles, and grandfather.
-If there are no paternal and/or maternal grandparents - Equity divided equally between paternal and maternal aunts and uncles
-If there are no paternal aunts and uncles -Equity to the next of kin

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

Texas Inheritance Law | What you need to know - SmartAsset (3)

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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.

Photo credit: ©iStock.com/courtneyk, ©iStock.com/Tiago_Fernandez

Chris Thompson, CEPF®Chris Thompson is a retirement, savings, investment and personal finance expert at SmartAsset. He has reviewed hundreds of financial products and financial advisors in an effort to help people improve their financial lives. Chris is a Certified Personal Finance Educator® (CEPF®) and a member of the Society for the Advancement of Business Writing and Publishing. He is a graduate of Montclair State University, where he received the Journalistic Achievement Award. Chris' articles have appeared in places like Yahoo! Finance, MSN and Bleacher Report. He lives in New Jersey and is a fan of the Mets, Jets and Nets.



How much can you inherit in Texas without paying taxes? ›

Once the net estate value is calculated, the estate tax exemption amount is subtracted from that value to arrive at their taxable estate. As of 2022, the estate tax exemption is $12,060,000, and in 2023 that will rise to $12,920,000.

Do you have to pay taxes on inherited money in Texas? ›

There is no inheritance tax in Texas.

You may have to pay federal estate taxes, but not state inheritance taxes. Texas is one of a handful of states that does not have an inheritance tax.

Does an executor have to show accounting to beneficiaries in Texas? ›

In Texas, while an executor of an estate does have to file an inventory, appraisement, and list of claims with the probate court, they are not necessarily required to show accountings to beneficiaries. A personal representative must file an inventory of the estate assets within 90 days of qualification.

How long does an executor have to distribute assets in Texas? ›

The executor generally has three years after their appointment to distribute the remaining assets (after debts and disputes are resolved). The Texas probate process can be fairly simple in most cases.

How does inheritance work in Texas? ›

The state divides separate personal property between your spouse and your children, with two thirds afforded to all the children and the leftover one third going to the spouse. Separate real property is divvied out in the same manner, but once the surviving spouse dies, real property is transferred to the children.

Do you have to report inheritance money to IRS? ›

Inheritances are not considered income for federal tax purposes, whether you inherit cash, investments or property. However, any subsequent earnings on the inherited assets are taxable, unless it comes from a tax-free source.

How much can you inherit from your parents without paying taxes? ›

The federal estate tax exemption shields $12.06 million from tax as of 2022 (rising to $12.92 million in 2023). 2 There's no income tax on inheritances.

How much does an estate have to be worth to go to probate in Texas? ›

Under Texas Estates Code, Title 2, Chapter 205, an estate need not pass through the probate process if there is no will and the total value of the estate (not counting any homestead real estate owned by the Decedent) is $75,000 or less.

How much can you inherit in Texas? ›

As of 2022, if an individual leaves less than $12.06 million to their heirs, they won't have to worry about paying any federal estate tax in the US. Married couples can shield up to $24.12 million together, tax-free. Anything over these amounts will be taxed at a rate of 40%.

What is the 65 day rule for estates? ›

Under Section 663(b) of the Internal Revenue Code, any distribution by an estate or trust within the first 65 days of the tax year can be treated as having been made on the last day of the preceding tax year.

What assets are not subject to probate in Texas? ›

Texas Non-Probate Assets
  • Insurance policies.
  • IRAs.
  • KEOGHs.
  • Pensions.
  • Profit sharing plans.
  • 401(k) plans.
  • Property owned in joint tenancy with a right of survivorship.
  • Assets in trusts.

What an executor Cannot do in Texas? ›

As an Executor, what you cannot do is go against the terms of the Will, Breach Fiduciary duty, fail to act, self-deal, embezzle, intentionally or unintentionally through neglect harm the estate, and cannot do threats to beneficiaries and heirs.

Do I have to pay taxes on a $10 000 inheritance? ›

In California, there is no state-level estate or inheritance tax. If you are a California resident, you do not need to worry about paying an inheritance tax on the money you inherit from a deceased individual. As of 2023, only six states require an inheritance tax on people who inherit money.

How much can I inherit from my parents tax free? ›

In the current tax year, 2022/23, no inheritance tax is due on the first £325,000 of an estate, with 40% normally being charged on any amount above that. However, what is charged will be less if you leave behind your home to your direct descendants, such as children or grandchildren.


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