You are lying on your deathbed surrounded by the many assets you own: cash, bonds, automobiles in the driveway, the mansion.
Then you die, and your ownership dies with you. Poof.
Where does the ownership go? As you are winging your way to heaven, the ownership of your assets vests immediately in the beneficiaries of your will. If you die without a will, then ownership vests in your heirs at law.
How does that work?
If You Can’t Take it With You, Then Who Owns It?
Suppose in your will you leave your mansion to your daughter Katie. At the moment of your death, she becomes the owner of the mansion. Like magic. Your will needs to be probated, of course.
And so it goes. Cash, bonds, toothbrushes – your entire estate vests instantly in the people you named in your will.
There is never an absence of ownership. We may not know exactly who the owner is, but by gosh, someone owns it. If there is a dispute, then it is a mere timing issue. The winner of the dispute will take title to your assets as of the moment of your death. Texas Estates Code Section 101.001 takes care of that.
Heirs at Law
All of this wonderfulness comes with strings, of course. Your will must be admitted to probate for it to be valid. If it is not admitted, then the beneficiary designations found in it vanish, and ownership goes to your heirs at law.
Executor
Then there is the executor. Once the will is admitted and the executor qualifies, the executor has a duty to recover possession of the estate. The executor holds the property “in trust” for both the beneficiary and the creditors of the estate. That means while Katie may own the mansion, she is not yet entitled to possess it.
Creditors
Creditors? Ah yes. They play a big part in this. Your beneficiaries own title to the assets, but their interests are subject to your debts, except as exempted by law. That means Katie’s inherited mansion could be sold to pay your credit card bills.
Family Settlement Doctrine
Sometimes beneficiaries under a will are not happy with what they are left in the will. Here is where the family settlement doctrine comes in. It is based on the general principle that the property belongs to the beneficiaries under the will. If it were distributed to them, then they could transfer it as they wish. Thus, the doctrine goes, there is no reason that they may not divide it by agreement before they receive it.
Beneficiaries vs. Heirs at Law
The beneficiaries could even agree not to probate the will, but that comes with the danger that if the will is not probated, then it is not valid. If there is no valid will, then the heirs at law, not the named beneficiaries, inherit the property.
Beneficiaries vs. heirs at law. Now that is a fight worth seeing.
The State
At least the state cannot claim ownership of your assets. Or can it? For that, we look at the Texas escheat laws.
If you have been dead for at least seven years and your will has not been recorded or probated in the county where your property is located, then the law presumes you died without a will. If no one has asserted a “lawful” claim to your property or taken a “lawful” act of ownership within those seven years, then the law presumes you left no heirs.
The state can then take your property.
Ouch.
Spouse
All of this assumes that you were single when you died. If you were married, then the story becomes more complicated.
Hammerle Finley is Here to Help You With Estate Planning
Don’t let confusion, conflict, or anyone else but yourself decide what happens to your estate. Whether you’re planning or navigating a loved one’s legacy, having a clear, valid will is essential.
Schedule a consultation today to ensure your wishes are honored—and your property goes where you intend it to.
Virginia Hammerle is an accredited estate planner and represents clients in estate planning, probate, guardianship, and contested litigation. She may be reached at legaltalktexas@hammerle.com. This blog contains general information only and does not constitute legal advice.
