Moving to Austin brings tacos, live music, and new legal rules. Texas follows community-property principles that treat most marital earnings as jointly owned. If you relocate from a common-law state, your existing estate plan may no longer fit. Understanding how community property affects probate ensures your legacy passes smoothly and tax-efficiently.
Distinguishing Community and Separate Assets
Income earned after you establish Texas domicile becomes community property, even if only one spouse works. Separate assets include property you owned before moving, inheritances, and gifts. Tracing funds is essential; mixing separate and community money in the same account risks transmutation into community property. Accurate records protect your premarital nest egg from unintended division and simplify probate inventory later.
Updating Wills and Trusts for Texas Law
Wills drafted elsewhere remain valid, but they may reference statutes that do not exist here. Updating your documents ensures Texas-specific executor powers, independent-administration clauses, and self-proving affidavits. If you used a living trust for privacy, Texas probate may be simple enough that a muniment of title could achieve your goals with less upkeep. A local review prevents surprises and aligns language with Travis County practice.
Re-Titling Real Estate and Bank Accounts
Deeds from non-community states often list one spouse as sole owner. Converting to community property can yield a full step-up in basis upon the first spouse’s death, slashing capital-gains tax on a future sale. Texas allows a community-property survivorship agreement that transfers assets outside probate. Signing one now simplifies administration later and can eliminate ancillary filings in other counties.
Considering Spousal Liability for Debts
Community property includes liabilities incurred for family expenses. If one spouse carries large student loans or business debts, you might use a partition agreement to keep future earnings separate. This contract shields the non-debtor spouse’s half of community property from certain creditors, preserving more wealth for heirs. Pairing the agreement with updated beneficiary designations keeps retirement funds aligned with your new structure.
Adjusting Beneficiary Forms and Retirement Plans
Texas gives spouses a one-half community interest in retirement contributions made after the move. Review beneficiary forms to avoid conflicts between plan documents and state law. You may need spousal consents to leave more than half to children or charities. Confirming designations now prevents ERISA disputes and accelerates payout timelines when probate starts.
Community Property and Estate-Tax Planning for High-Net-Worth Couples
Although Texas has no state estate tax, large estates still face federal liability. Community-property status can double the unused spousal exclusion and produce basis adjustments that minimize future gains. Coordinating portability elections and marital-deduction trusts with a community framework maximizes flexibility. Couples relocating from high-tax states often find significant savings by recalibrating gift strategies once settled in Austin.
Planning for Out-of-State Real Estate
Homes or cabins you still own elsewhere remain subject to that state’s probate. A living trust or transfer-on-death deed can avoid ancillary probate and keep your Austin executor from juggling multiple court calendars. Coordinating titling strategies across states strengthens your overall plan and speeds up final distributions.
Settling into Austin should feel exciting, not legally confusing. Prepare your estate for community-property rules by calling McCulloch & Miller, PLLC at 713-333-8900—take your first confident step toward a seamless Texas transition.