Picture this typical scenario. A loved one passes away, leaving their surviving spouse and a child. The decedent has written into their testamentary instrument that he or she wishes to leave half to the surviving spouse and half to the child. All in all, not unusual. However, unbeknownst to the decedent, his or her true wishes may not reflect the reality of what will happen when the will is admitted to probate.
Community Property State
Texas is a community property state. Any property acquired during the marriage presumptively belongs in equal shares to each spouse, unless received by gift, devise, or inheritance. So when our decedent in the image above wills half to the surviving spouse, he or she most likely intended that all of the property that the couple owned would split right down the middle, half going each direction.
In reality, the decedent has only devised half of what the decedent actually owned – and if the majority of that is community property, the child will only get half of the half that the decedent owned. The kid gets 25% and the surviving spouse gets 75%. Probably not the goal the decedent had in mind when he or she willed half to each.
Of course any separate property would be split in a true 50/50 fashion among the devisees – but the longer a marriage lasts, the greater the chance for separate and community property to become commingled, resulting in community property.
Keeping careful track of separate property, otherwise known as tracing, is critical to marital property characterization and allows both spouses to know who owns what, so that their testamentary instruments reflect their actual intentions.
In the image above, if the couple owned effectively no separate property after a long marriage, the decedent might devise all they own to their child. The surviving spouse would maintain his or her community property 50%, and all of the 50% that the decedent owner would pass to their child.
The ins and outs of separate and community property and ensuring that each goes where it is supposed to go at death is complicated stuff, so keeping track of who owns what is critical to ensuring who gets what.
Hammerle Finley Can Help With Your Estate Planning Needs
If you are looking for estate planning assistance, schedule a consultation with one of the experienced attorneys at Hammerle Finley to discuss your options.
Bryce Griffin is a third-year J.D. student at Baylor University School of Law, and completed his undergraduate in Philosophy and Political Science at Baylor University. He is looking forward to entering the estate planning legal field upon graduation and passing the Bar.
