Texas Increases Allowances for Surviving Spouse and Children

Hooray for modern times! As part of the new Texas Estates Code, the Texas Legislature finally got around to increasing various exemptions and allowances for surviving family members.

Section 102.004 of the Texas Estates Code clarifies that the homestead of a decedent who is survived by a spouse or a minor child is not liable for the payment of any debts of the deceased’s estate, other than certain debts which may be secured by that homestead under the Texas Constitution – essentially, purchase money or home equity liens, ad valorem property taxes, certain materialmen’s liens, an owelty of partition, or a reverse mortgage.

Effective January 1, 2014, Chapter 353 of the Texas Estates Code sets new amounts for certain allowances that may be claimed by a surviving spouse or certain children of the deceased, prior to payment of any creditor’s claims.

Under Section 353.053, in place of a homestead under Section 102.004 (for persons who lease or otherwise do not have a suitable homestead), qualified survivors can request that the probate court set aside an allowance up to $45,000 – previously, the maximum allowance in place of the homestead was $15,000. 

In lieu of any exempt personal property, the survivors can also request the probate court set aside an allowance up to $30,000 – the previous cap on this allowance was $5,000. 

These two allowances are in addition to the “family allowance” that may be requested under Section 353.102 of the Texas Estates Code for the maintenance of the surviving spouse, minor children, and any adult incapacitated children for one year from the date of the decedent’s death. 

Effectively, the Texas Legislature now permits qualified survivors to set aside up to $75,000 (versus the previous $20,000), as well as a “family allowance” when necessary, to help provide for their care without the fear of such funds being seized by the deceased’s creditors. 

By: Cynthia W. Veidt, cindy@lpvlaw.com

Do You Know Who Gets Your Property If You Die Without a Will?

Well, you may think that you do. And most of you are probably wrong. At least under Texas law.

Recently, I overheard a well-educated financial expert tell his clients that they didn’t need to have a will, because Texas is a community property state and the surviving spouse will inherit everything, anyway.

After figuratively beating my head against a wall for the next five minute, I decided to revisit this misunderstood topic on our Blog instead.

Everyone needs a will – here are a few reasons why:

First, don’t assume you’ll have a surviving spouse. Married couples could both die during an accident, or within 30 days of each other, or after a divorce - any number of unfortunate circumstances may result in the law failing to recognize a “surviving spouse.”

Second, your surviving spouse does not automatically inherit everything you own. Other family members, particularly children (whether they are also children of your surviving spouse or not), will also inherit certain types of property under Texas law. Add in children from a prior relationship, and your surviving spouse may receive an unpleasant surprise.

Third, not everything you own is legally characterized as “community property” just because you happen to be married. And separate property is treated differently under Texas laws than community property.

Fourth, Texas’ statutes governing the distribution of your property if you die without a will (called being “intestate”) are very confusing. The Travis County Probate Court has a color-coded pie chart that helps demonstrate this complexity quite nicely: http://www.co.travis.tx.us/probate/pdfs/DnD_diagrams.pdf.  

Fifth, your bank accounts and other investments may not pass by beneficiary designation or a right-of-survivorship clause, which means a probate court will need to enter a judgment determining the identity and inheritance rights of your legal heirs. That process will hold up access to your funds at a time when they are most necessary for your surviving family members. 

Why risk an unwanted result, when you can simply prepare a will that clearly tells everyone how to handle your property after you pass away? 

By: Cynthia W. Veidt, cindy@lpvlaw.com