Protect your family with an estate plan
Losing a loved one is one of the most challenging times in a person’s life. It not only presents emotional challenges for the bereaved, it can often present the practical challenge of dealing with the financial affairs of that loved one.
For peace of mind, everyone should put in place standard estate planning tools to avoid causing their families unnecessary expense and difficulty when they pass.
What is an "estate"?
Your estate are all the things you own at the time you pass away, such as your house and your bank accounts.
Without a plan in place, all of those things pass through probate, the court process of distributing your property to your heirs.
What happens if a person passes without an estate plan?
When a person passes without a Will, the law labels them "intestate." Passing away while intestate has a few different impacts on your family.
Your heirs (the people who inherit your property) are designated by state law.
In short, if you're married, the law first separates the community property from your marriage from any separate property you may own. Then it sets out a distribution between your spouse and children -- which changes depending on whether your spouse is also the parent of your children or not.
If you pass without either a spouse or children, then the next people in line to inherit are your parents, followed by your siblings, etc.
The state may try to confiscate some of your estate as reimbursement for nursing home care and other healthcare expenses
Many people receive government assistance before they pass to help pay expenses for nursing homes, and/or various in-home care options. That assistance is paid through Medicaid, and after you pass, the state can lay a claim to your estate for reimbursement. The process is referred to as the Medicaid Estate Recovery Program, or MERP.
But your assets are only vulnerable if they pass through probate, and there are tools that will ensure certain assets (like your home or your bank accounts) transfer to your chosen heir immediately upon your passing without going through the probate process. Those are important tools to help your heirs receive everything you can give them.
For family to receive their inheritance, they must go to court for a legal procedure called an Application to Determine Heirship
Although state law says which categories of people should inherit your estate (spouse, children, etc.), there is no database that automatically prints a report showing who those people are.
Instead, potential heirs must go to court and file an Application to Determine Heirship, which requires those heirs to appear before a judge and present witnesses who can testify about who the members of your family are. The goal is for a judge to then issue a Declaration of Heirship, which names your heirs and sets out the percentage of your estate they are entitled to inherit. The process is set out in Texas Estates Code 202.
There can be conflict among family about who should be the "administrator" of the estate
The administrator of an estate (also known as executor or personal representative) is the person given responsibility for gathering all the assets of the estate, liquidating them if necessary, and distributing them properly to the estate's heirs.
If you do not have an estate plan, a court must decide who to name administrator; and the potential administrators can potentially fight in court about who should receive that appointment. Not every probate case resembles an episode of Succession, but there is a risk of tension between family members when money and inheritance are at stake. The process is set out in Texas Estates Code section 304, 305, and 306.
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