To create a comprehensive estate plan, you must be familiar with all the laws and regulations in your state. For example, Texas is one of nine states that follows community property laws. What this means is that all assets acquired by spouses during the marriage while living in one of the nine states will be labeled as “community property,” regardless of which spouse purchased it. Our Dallas Fort Worth estate planning attorneys explain what community property is and how it may affect your estate planning process.
What Is Community Property?
When a spouse purchases assets in Texas during their marriage, the property is owned by both spouses 50/50. Therefore, when one spouse passes away, they can leave their share of the assets or property to whomever they wish. However – this can be a bit complicated when it comes to estate distribution.
For example, suppose Jack purchased a house in Texas a year after he married his wife Jen. Although Jack purchased the property, both Jack and Jen own 50 percent of the house since they bought it in a community property state. Each of spouse must plan, IN ADVANCE, for what to do with their 50 percent of the property. There is NO law in Texas that says a spouse automatically inherits the deceased spouse’s share of joint assets. To start planning, get in touch with out team at Crain & Wooley to protect your share.
Community Property Misconceptions
Many have the misconception that when one spouse passes away, the property will automatically transfer to the surviving spouse. However, this is an incorrect assumption. In reality, when one partner dies, the surviving spouse will only be able to keep their half of the assets. The deceased spouse’s half will be transferred according to legal documents, such as wills, trusts, and contracts. When a spouse passes away without legal documents that state their wishes, the court will then decide how their assets will be distributed.
Learn more about the misconceptions on community property in our blog post.
Have questions about how community property might affect your estate plan? Contact our Dallas Fort Worth estate planning attorneys today at (972) 560-6288 to schedule a consultation!