Yes. Although Texas law details what happens to your property, it will be much easier on your family if you put your wishes in writing. It’s especially important that you name who should be in charge of things. And having a will prevents the likely necessity of a determination of heirship proceeding.
Typically, beneficiaries are not taxed on their inheritance in Texas. If an estate is valued at more than the federal exemption amount, the estate will likely have to pay taxes before giving money to beneficiaries. The federal estate tax exemption amount for 2020 is $11,580,000 for a single person. That means that if your estate – the value of everything you own – is less than the exemption amount in the year that you die, your estate should not owe any estate tax.
When the beneficiary inherits a non-Roth retirement account, though, income taxes are due when that account pays the beneficiary.
Decedent is the term used for the person who died.
Beneficiaries are the people who are named in the will or in accounts to receive property and assets after the decedent dies.
Heirs are people that will inherit property when there is no will. Your heirs are relatives. Texas has a particular order for deciding who inherits property.
The personal representative is the person the court appoints to be in charge of the estate. This could be an executor (or executrix) or an administrator.
The executor (often called an executrix when female) is the person named in a will to be in charge of the estate after the decedent dies. To have official authority, the executor needs to be appointed by the court.
The administrator of an estate is the person appointed by the court to be in charge of the estate after the decedent dies. We use “administrator” when the decedent did not have a will.
When talking about probate or an estate, the place (house, mobile home, townhome) where the decedent lived and that was owned, at least in part, by the decedent, is the decedent’s homestead. Texas protects the homestead (to the degree the decedent owned it) when a surviving spouse or minor children live there. Texas also protects the homestead under certain conditions when an adult child lives in the home.
In addition to the homestead, some of the decedent’s property is considered to be exempt. Being exempt means that it cannot be used to pay debts the decedent owed. Instead, when there is not enough money in the estate to pay the debts, this property is saved to help take care of select categories of people. Exempt property includes things such as home furnishings, vehicles for farming and ranching, clothes, tools, a limited amount of jewelry, two firearms, sporting equipment, pets, and certain livestock.
When the estate owes creditors money, before those debts are paid, the family — the surviving spouse and minor children — could get money set aside to help take care of them.
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