If you are planning a move to Texas or have recently arrived to the state, updating your estate plan is an important item to add to your to-do list. Legal requirements related to estate planning vary by state and ensuring that these differences do no not catch you by surprise is crucial.
Marital Property Rules in Texas
One of the biggest differences between Texas and most other states concerns division of property in the case of divorce. Texas, alongside Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Washington, and Wisconsin, follow “community” distribution rules while most other states follow “equitable” distribution rules. This means that while elsewhere it may be the case that whatever is in your name is yours (and will stay yours), in Texas this is not necessarily true. Under the community model, all property acquired during a marriage is presumed to be community property no matter whose name is on the title. Even property that is in fact separate property, such as inheritance or gifts, is presumed to be community property and great care must be taken to make sure that it is not commingled with community property or it will become quasi-community property.
For couples where one or both members arrived to the marriage with children from a past partnership, the difference between community and equitable distribution models is especially important. After all, in such cases individuals often seek to keep assets separate so as not to complicate matters within the family. Even couples who do not meet this description will want to revise their plan in light of your move since chances are it was not Texas’s system that you had in mind when you first put your assets in order.
Avoiding Probate Issues
Even if you are moving from a state that also employs a community property division model or if the change from an equitable model makes no difference to you, you will nonetheless want to revise your plan and redraft all documents on Texas forms. While a will drafted in New York, for instance, can be probated in Texas, the court may require two persons who can swear to your signature in order to do so. If all such people are back in your home state, the process of ensuring your assets end up where you intend gains a layer of complexity. What is more, if your New York-drafted will lacks provisions specific to Texas the probate process may become yet more costly and trying for your heirs.
Other documents that you will likewise want to ensure comply with Texas law and are drafted in a recognizable format are your advance directives and revocable living trust (if you have one). In the case of a revocable living trust, this is to ensure no hiccups occur when you need it to work as you intended. Trust law varies from state to state and it may well be that minor amendments are required to ensure your intentions are met.
Changing States is Not the Only Time Revisions Are Needed
Even if no big move is on the horizon, it is still important to revise your estate plan every few years or whenever a major life event occurs. Any time you marry or divorce, welcome a new child or grandchild into your family, or see your relationship with a beneficiary change, you want to ensure your estate plan reflects the new situation. Indeed, even if no seismic shifts occur, you want to revise your plan periodically in recognition of the fact that life is not a static event.
If you are a new arrival to Texas, welcome! It would be our pleasure to ensure your estate plan meets Texas requirements. Likewise, if you are looking to update your plan for any other reason, we would love to talk! Get in touch by either calling our office at 512-910-8977 in Austin or 210-570-2458 in San Antonio or via the contact form on our website.