Re-title assets upon marriage in Texas?

[soupcxan]

My wife and I got married last year (we're in our 20s, first marriage, no kids, live in Texas) and each of us brought some assets to the party:

Her: sizable house that was purchased on a mortgage
Me: sizable investments (taxable brokerage account, 401k, and Roth)

My concern is, what if one of us passed away unexpectedly? I am not listed on the mortgage or title. Does she need to do something to allow the house to pass to me (and avoid a hassle/expense) in the event of her passing?

On the other hand, do I need to do something with my investment accounts for her in case I am hit by a bus tomorrow? Designating her as the beneficiary for the 401k and Roth IRA is simple enough. But what about the taxable account? Do I need to specify that she is the beneficiary? Or should we create a joint investment account instead?

[kumquat]

Write wills.

[SecondCor521]

kumquat is correct. If you don't have wills, your property will pass according to Texas' intestacy laws, which may do what you want but more likely will not.

You can also contact your brokerage firm about adding her name to the account and making it a joint account. In practice, they will probably effect that change by opening a new joint account for you and your wife, then transferring the assets from your old individual account into your new joint account. There are several flavors of joint accounts; I always chose JTWROS, but you should evaluate your choices there as well.

2Cor521

[Urchina]

Ditto what Kumquat said. I'd recommend, as a starting point, the Nolo Press book on the subject: Nolo's Simple Will Book, at Nolo: Law Books, Legal Forms and Legal Software.

It took me about 3 hours to read the book and then about 1/2 hour to write a will (including a trust for our children) using the included software. I checked it out of our library for free.

[soupcxan]

Certainly we do need wills and I'll check into the nolo guide. But I was under the impression that it's better for the house to pass directly to the surviving spouse rather than go through probate (which can be time consuming and expensive at what is already a difficult time). Does this happen automatically for married folks? Same question applies for investment accounts if they are only titled in one persons name.

[Walt34]

Kumquat is correct and that's the easiest way, and the easiest to change if, um, things don't work out as expected.

If she puts you on the title to the house, and you make her joint on the investments, all that is a lot more difficult to undo if, um, things don't work out as expected.

Not trying to be a pessimist or anything, but experience has shown that sometimes thing just don't, um, work out as expected. Don't ask how I know.

[Cruisinthru]

soupcxan,

You need to be careful with co-mingling of assets. Texas is a community property state. Should you split up you could be opening a new can of worms. If your name is on the house, she could be forced to pay you for your half. If her name is put onto your investments she could ask for half of them at the time of the split. Your assets are considered seperate property until you co-mingle" and then they are community property for the judge to divide.

Since yours is a new marriage maybe you should look into a transfer on death arrangement for now. A will would do that for you.

[packrat44]

Time to set up a Revocable Living Trust.

[Texas Proud]

Quote:

Originally Posted by soupcxan Certainly we do need wills and I'll check into the nolo guide. But I was under the impression that it's better for the house to pass directly to the surviving spouse rather than go through probate (which can be time consuming and expensive at what is already a difficult time). Does this happen automatically for married folks? Same question applies for investment accounts if they are only titled in one persons name.

Texas has changed it's laws.... my BIL passed last year and from what we have been told all we have to do it make some kind of filing and a list of assets and that is IT.... and the lawyer said we have 7 years...

This is with no children... by law, all assets go to the spouse...

EASY PEASY....

[Art G]

Texas is a community property State. All assets automatically go to the spouse unless designated otherwise. In fact, in qualified accounts, your spouse has to sign off if the assets are to go to someone else.

[Cruisinthru]

Quote:

Originally Posted by Art G Texas is a community property State. All assets automatically go to the spouse unless designated otherwise. In fact, in qualified accounts, your spouse has to sign off if the assets are to go to someone else.

If assets belong to you prior to the marriage and are never co-mingled (sold to buy joint property, names added to accounts, deposited in both names, etc) they are still the property of the person bringing them into the marriage. Only that obtained during the marriage is community property.

If soupxcan's name isn't on the house, he may not get it if the wife dies. His accounts would have to go thru probate and if her name is not on them, she better have a good will.

I still think that the best bet is a good will for the next few years.

Don't ask me how I learned all this, just know that second husband and I didn't co-mingle funds for the first fifteen years of our marriage. Yes, we live in Texas, and so do our Ex's.

[Texas Proud]

Quote:

Originally Posted by Cruisinthru If assets belong to you prior to the marriage and are never co-mingled (sold to buy joint property, names added to accounts, deposited in both names, etc) they are still the property of the person bringing them into the marriage. Only that obtained during the marriage is community property. If soupxcan's name isn't on the house, he may not get it if the wife dies. His accounts would have to go thru probate and if her name is not on them, she better have a good will. I still think that the best bet is a good will for the next few years. Don't ask me how I learned all this, just know that second husband and I didn't co-mingle funds for the first fifteen years of our marriage. Yes, we live in Texas, and so do our Ex's.

But yours must be different than what he put down...

If you do not have children... then it is irrelevant if it is community property or separate property...

And to tell the truth... even community property is actually owned half by each spouse so the other one can do as they wish with their half.... even leaving it to the blond bimbo that the wife did not know about..

Finally, a wife has a life estate in the house they were living even if she does not own any of it... the owner after death has to live with it...

[Cruisinthru]

The point is that if it was not community property, but solely owned by one partner prior to the marriage, it doesn't become community property unless one takes an action to make it so. I am thinking of soupxcans financial investments. What he had at the time of the marriage is still his if he does not add his wifes name to the accounts. Any additional growth from the time of the marriage would be community property and would have to be split as such. In this case he needs a will and maybe a transfer on death on accounts.

The house is in wifes name. Should she die, yes he can continue to live there, but it is not necessarily his unless she willed it to him. If she puts his name on the house, she is giving him ownership and should they split he gets half the equity. He needs to get a will in place.

[REWahoo]

Here is more than you could ever wish to know about Intestate Succession -- Texas

Edit: This was an especially enlightening section - "Children From Alternative Reproduction Technologies"

[eridanus]

Quote:

Originally Posted by Cruisinthru What he had at the time of the marriage is still his if he does not add his wifes name to the accounts. Any additional growth from the time of the marriage would be community property and would have to be split as such.

Any appreciation in the separate property is still separate property. Oddly, any interest or income from the separate property is considered community property.

Explanation of Texas community and separate property

[mark500]

I suggest you consult an estate attorney in Texas. Shoudn't charge that much, for your relatively simple situation.



.

[Texas Proud]

Quote:

Originally Posted by Cruisinthru The point is that if it was not community property, but solely owned by one partner prior to the marriage, it doesn't become community property unless one takes an action to make it so. I am thinking of soupxcans financial investments. What he had at the time of the marriage is still his if he does not add his wifes name to the accounts. Any additional growth from the time of the marriage would be community property and would have to be split as such. In this case he needs a will and maybe a transfer on death on accounts. The house is in wifes name. Should she die, yes he can continue to live there, but it is not necessarily his unless she willed it to him. If she puts his name on the house, she is giving him ownership and should they split he gets half the equity. He needs to get a will in place.

Please read below.... if no children it does not matter if it was community OR separate... all goes to the spouse...


Also... you are not correct in your statement on the community property either (unless it has changed)... the growth of separate property is still separate property... the INCOME on separate property is community property... If you do not want it commingled, then you need to skim off any income you get on your separate property portfolio and it will remain separate (just in case you get divorced later)....


As someone else said.... don't believe what you read as some are just wrong... consult a lawyer to make sure you have your bases covered...


2. No Surviving Descendants

a. Personal Property

If there are no surviving descendants, all separate personal property passes to the surviving spouse.
b. Real Property

(1) Surviving Parents, Siblings, or Descendants of Siblings

If there are no surviving descendants but there are surviving parents, siblings, or descendants of siblings, the surviving spouse inherits one-half of the separate real property outright with the remaining one-half passing to the parents, siblings, and descendants of siblings as if the intestate died without a surviving spouse (that is, this one-half passes using the same scheme as for individual property).
(2) No Surviving Parents, Siblings, or Descendants of Siblings

If the intestate has no surviving descendants, parents, siblings, or descendants of siblings, the surviving spouse inherits all of the separate real property.

[SecondCor521]

Just wanted to emphasize that each state's laws are different, so what is written in this thread may be correct if you live in Texas, but if you live in another state you should completely ignore what is written here and consult a local attorney and/or your own state laws.

2Cor521