San Antonio Express-News
Copyright 2009, Paul Premack
October 6, 2009

* Avoid Probate with Preplanning *

Dear Mr. Premack: My husband and I own a house together in both our names. He has a son and daughter from his previous marriage. He recently died without having a Will. Do I have survivorship rights so that the house is now mine, or do I share ownership with his two children? The house still has a mortgage. If I want the house in my name only, what will I have to do? -  RF

The laws of Texas give couples a variety of options so that they can control how their assets will pass upon their deaths. The laws also define what will happen if the couple is not proactive and fails to take advantage of the preplanning options.

First, be aware that in Texas joint ownership does not automatically include survivorship rights. Because this is a community property state, spouses most often each own a fifty percent share of their home. Your husband had control over ownership of his half, and could have chosen among these options:

1. A Community Property Survivorship Agreement, when signed by both of you, would have allowed his half of the house to become your property upon his death, without probate;

2. A Last Will and Testament, properly drafted by a lawyer and executed by your husband, could have given you his half of the house, which you would claim by having the Will probated;

3. A Living Trust, when created and funded by both of you, would have put title to the house into the trust and named you as the trust beneficiary. Upon his death, you would be the only person with rights to the house;

4. A deed could have been written and signed by both of you, making you sole owner of the house or giving you a remainder interest in his share upon his death.

According to your letter, he did not make a Will. Did he take advantage of any of his other planning opportunities? If yes, then look to those legal documents to see what rights you now have in the property. If no, then the state’s law on intestate death now applies to decide who receives his share of the house.

Intestacy law often gives assets to the surviving spouse. You, however, are subject to a huge legal exception: when there are children from a prior marriage, they inherit the bulk of their parent’s intestate assets. Thus, assuming he did not utilize any of his preplanning options, his half of the house now belongs to his son and daughter while your half still belongs to you.

Even if his children own half of your home, their ownership is secondary to your legal occupancy rights under Texas law. You may continue to live in the home, and they cannot force sale of it without your consent. While you live in the house, they are responsible for their share of the insurance, of the taxes and of many types of repairs the house may require as time passes. You retain the right to dispose of your half in your own Last Will and Testament.

The mortgage is another story. By law, they are responsible for half of the principal payment due each month while you are responsible for all of the interest and half the principal. But by contract (that is, under the terms of the mortgage) you are entirely liable to the mortgage company for the entire monthly payment. The mortgage company will come after you for payment before it looks to them; you are stuck with the job of collecting from them the amounts that they owe.

What do you have to do if you want the house in your name only? You have to reacquire your husband’s half from his children. Perhaps they will, from a sense of love and gratitude, gift it back to you. Perhaps they will insist on being paid the full market value of their shares. And perhaps they will refuse to sell it to you, in which case you must either accept their refusal or take them to court (which is a far more expensive route than any of the preplanning options among which you and your husband could have selected).

The moral of your story is that spending a few dollars to preplan is faster and less expensive than relying on the intestacy laws. Couples like you should visit with a qualified estate or elder law attorney to find a way to handle disposition of titles to important assets (like their homes).