Community Property – It’s NOT What You Think: Justin Crain, Partner

Community Property – It’s NOT What You Think: Justin Crain, Partner

Have you noticed that life keeps getting more and more complicated? Things that we thought we knew and understood seem to not be as simple as they once were. An area of law that is often misunderstood in this manner is community property.

In Texas, community property means that each person owns a certain percentage of assets. The most common analogy is a married couple: spouse #1 owns 50% of assets acquired after marriage and spouse # 2 owns the remaining 50%. Simple enough, right? Well, that is where the simplicity ends. Complexity and misunderstanding arise when talking about distributing community property assets in cases of death (let alone with disability – which is a whole other topic). 

A common misunderstanding surrounds the distribution of title assets like real estate. A normal, yet mistaken, thought process goes something like this: “I am married, and we are both residents of Texas. Since Texas is a community property state when I die all my property will automatically transfer to my spouse.” On face value, this sounds right. However, it is simply an incorrect assumption and the truth surrounding community property surprises many people – often during times of personal loss and tragedy. 

Bottom line: upon the death of one partner, the surviving spouse will be able to keep his or her 50% of assets. The decedent’s 50% of assets transfer according to legal documents such as wills, trusts, and contracts. When a spouse dies without a will, trust or contract in place, he or she dies intestate (without instructions) making it difficult and expensive for the survivor to sell, refinance, or distribute title assets.

If you own a home, have CDs, mineral interests…ANYTHING WITH A TITLE, it is imperative that your assets be included in a legally binding will, trust or contract. Please, don’t let urban legends and general misunderstanding about community property stop you from creating a comprehensive estate plan.

Have questions about community property email us today.

  • Tracey Messner
    Posted at 18:37h, 14 June Reply

    Last sentence has a typo: “Please, let don’t urban legends . . .”

    Looking forward to your Seminar on 6/22/20.

    • admin
      Posted at 09:00h, 15 June Reply

      Thank you for letting us know. Those darn typos. Fixed it!
      See you on June 22!

  • Pam Payne
    Posted at 22:21h, 24 June Reply

    Does your office handle literary rights as part of an estate plan?

    • admin
      Posted at 08:53h, 26 June Reply

      Oh yes! It is extremely important to include any type of intellectual property / copyright (digital or otherwise) in an estate plan. Feel free to call us to set a time to talk 1:1 – 972-560-6288.

  • Maria Salazar Plata.
    Posted at 22:33h, 29 September Reply

    Okay I own my home I bought it when my first husband died I sold our house and got the one I now live in. I got married two years after my first husband died, so is he entitled to fifty percent? I also have a bit of money saved it’s from the home I sold. I don’t have a will cause I have been told that it costs over a thousand dollars, me and my first husband had six kids together, can my husband now take everything from my kids? They are all grown and married I kept my first husband’ s last name. I don’t have a website

    • admin
      Posted at 11:26h, 30 September Reply

      Hi Maria! Thanks for commenting. You have a very complicated situation. Without a written estate plan, will or trust, your family will (to be blunt) be in a world of hurt. This is called dying intestate and in this situation heirship proceedings will have to take place BEFORE anyone (husband or kids) can sell house / disburse assets. This will cost $$$$$ and take a lot of time. This is BEFORE community property law complications and yes those do impact your situation. A stand alone will for you (not your husband) will be around $500-600 and avoid dying intestate. A will only for both of you will be about $1000.

  • Denell Cobb
    Posted at 16:07h, 03 December Reply

    My husband and I both have wills. His health is not good. Do I need to do anything to get the house in my name only before he dies.? I do not want to go to probate and spend a lot of money. We live in Texas.

    • admin
      Posted at 12:23h, 04 December Reply

      Good Morning! The first thing we would need to do is review your husbands will so that any possible deed work done would not pose an issue. Then we would talk with you 1:1 about the pros and cons surrounding the different deed work options that might help you. Feel free to call our office 972-560-6288 to set a time to talk with an attorney or schedule here on our webiste!

Post A Comment