Having a will is important for every adult, but especially so if you are part of a blended family. Without a will, your assets will be distributed according to a statutory formula, which may not reflect the way you would want your assets to be distributed.
Intestacy can be complex in blended families
In Texas, when a married person dies without a will and leaves children from another relationship, his surviving spouse will only be entitled to keep her own one-half interest in the community estate. The deceased spouse’s share of the community estate will pass to his children in equal shares.
Additionally, only one-third of the deceased spouse’s separate personal property passes to his surviving spouse, with the remaining two-thirds passing to his children.
If the deceased spouse died leaving separate real property, the surviving spouse is entitled to only a life estate in one-third of that property. The remainder is inherited outright by the deceased spouse’s children in equal shares.
Distribution according to statutory formula can cause unintended results
To illustrate the problems that can result if you have a blended family and die intestate, let’s assume Jack and Jill have been married for 25 years and have two children of their own. Let’s also assume that Jack has two children from a previous marriage.
When Jack dies, he leaves behind the following assets:
- A beach house which be owned before he met Jill.
- A home that he and Jill purchased after they got married and lived in their entire married lives.
- A stock portfolio worth $400,000 to which both he and Jill contributed for their retirement.
The home in which he and Jill lived is community property. But because Jack has children from another marriage, the home will not be inherited by Jill alone. Although she will retain the right to live in the home during her lifetime, Jack’s children will inherit his half of the home in equal shares.
Since Jack owned the beach house before he met Jill, it is classified as separate property. Therefore, the beach house will be inherited by Jack’s children, instead of Jill. Although Jill will retain a one-third life interest in the property, she may not have unlimited access to the beach house as she once did, especially if she has a strained relationship with her children or stepchildren.
And what will happen to the stock portfolio that she and Jack spent 25 years saving for their retirement? It will be split in half. Jill will retain $200,000, but the rest will be split equally between John’s four children, which may result in Jill not having enough resources for her retirement.
Do you think this is the way Jack would have wanted his assets distributed?