When most folks think of estate planning, they think of writing their Last Will and Testament in
preparation for their passing. In fact, estate planning is about much more than end-of-life
preparations. It is about setting coordinates to steer you towards a successful retirement. It is
about ensuring a trusted loved one or advisor is designated to manage your medical and financial
affairs should you suffer incapacitation. If you run a business, it is about ensuring the continuity
of your enterprise. And lastly, yes, an estate plan is about the efficient transfer of assets to
beneficiaries but it is also about ensuring your assets don’t end up in the wrong hands. All of
these are reasons why even Texans without heirs need an estate plan.
What Happens to Your Assets if You Die Without Beneficiaries?
Plenty of individuals have no family or no family to whom they wish to leave their estate. Those
in this position often reason that having no heirs means they need no estate plan and yet there is a
deep flaw in this logic.
A person who dies with no Last Will and Testament or any other estate planning documents is
said to have died “intestate.” When this happens, state legislation intervenes to determine who
should receive their assets. Probate court oversees this process and the first step taken is to locate
any living family members who might be rightful beneficiaries.
While individual states differ, in Texas when there is no Will the probate code dictates that assets
pass first to one’s surviving spouse and children. In their absence, they pass to the parents and
siblings and in their absence, to the grandparents. If there are no grandparents, one’s assets are
divided and passed to the grandparents’ decedentsdescendants, their decedentsdescendants, and
so on to the nearest lineal ancestors. If no family members can be located, a person’s assets
escheat to (meaning become the property of) the State of Texas.
Most folks with no heirs do not want their life’s work to pass to a distant cousin of a cousin they
have never met or to the state itself which–in addition to the reasons cited above–is why it is
important to execute an estate plan even if you have no surviving close family.
Common Beneficiary Designations for Those Without Heirs
Individuals without heirs often designate a friend or charitable organization to inherit their assets.
In addition, many people choose to pursue philanthropic options. Common vehicles for the latter
include a charitable remainder trust, donor-advised fund, or private foundation. Each of these
routes carries different tax implications and is suitable in different situations and so it is
important to seek counsel from an experienced estate planning attorney when making your
decision.
To learn more about estate plans and why every adult, regardless of their age, family situation, or
wealth needs one, do not hesitate to reach out to the Hailey-Petty Law Firm either by calling
(512) 910-8977 in Austin, (210) 570-2458 in San Antonio or by using the contact form on our website.