Prying homestead rights away from spouse could be costly
Q: I remarried three years ago, and I have two grown children. My wife has one grown child. None of them resides with us. I owned our house free and clear before we got married. Does a Transfer on Death Deed (in this case to my children) have any effect on the Texas homestead rights of my wife if I die before her?
A: No, it has no effect at all. Before you die, there are only two ways for your wife to lose her homestead right. One is if she agrees in writing to give it up. The other is if the two of you get divorced.
You could also sell the home and rent a home or apartment, and if you die without a homestead, then there would be no property for her to claim as the marital homestead. But clearly, you would be penalizing yourself, possibly for decades, just to keep your wife from making a homestead claim.
Typically, you would see a waiver of the homestead right contained in a prenuptial agreement. It is much rarer to see it in a postnuptial agreement, which is a marital property agreement signed by two people who are already married, because the spouse without the house would have little reason or motivation to sign.
To persuade your wife to sign such an agreement, you would likely need to give her something valuable in exchange.
Also, for a marital property agreement to be enforceable, it is highly advisable that each spouse be represented by a separate attorney. In your case, the lawyer representing your wife would undoubtedly tell her she shouldn’t sign away her homestead right without being adequately compensated. As a consequence, she might demand enough cash or stocks either at the time of signing or at the time of your death to cover the cost of renting or buying a substitute home.
Clearly, that could be a considerable sum. And that’s in addition to the fees you would have to pay to the two lawyers.
After you have died, your wife can abandon the home, but no one can force her to move out.
The bottom line is that the homestead right of a surviving spouse is extremely valuable, and you can’t get around the law by simply signing a Transfer on Death Deed.
Q: Where can I get a guidebook for a beginner explaining how to settle an estate in Texas that has financial assets, a house, a car and household items? There are no debts, and it’s under $1 million.
A: You can download a 50page guidebook from the State Bar’s website at www.texasbar.com. Once there, click on “For the Public” then on “Free Legal Resources” then on “Pamphlets” and then on “Wills and Probate.”
There are two guidebooks, one on wills and the other on probate.
The information in this column is intended to provide a general understanding of the law, not legal advice. Readers with legal problems, including those whose questions are addressed here, should consult attorneys for advice on their particular circumstances.
Lipman of the Houston law firm Lipman & Associates is board-certified in estate planning and probate law by the Texas Board of Legal Specialization. Email questions to stateyourcase@lipmanpc.com.