Dying without a will causes all children to be treated equally under Texas intestacy laws.
Not all of your children have equal needs.
How Texas Intestacy Laws Treat Children
When someone dies without a will in Texas, the state’s intestacy laws decide who inherits. These laws treat every child the same so each receives an equal share. While that approach may seem fair on the surface, it often fails families that include a child with special needs. That child may require significantly more financial support and carefully structured resources for the rest of their life. Equal division under intestacy can leave them under-protected and, worse, can jeopardize the government benefits they rely on.
Only assets that pass through probate are governed by intestacy rules. Many assets avoid probate completely, including living trusts, life insurance, accounts with named beneficiaries, TOD and POD accounts, and property held in joint tenancy with right of survivorship.
Community Property and the Order of Inheritance
Texas is a community-property state. Most property acquired during marriage is generally considered owned equally by both spouses. At the death of the first spouse, that spouse’s share of community property frequently passes to the surviving spouse. Separate property follows different rules, and children from a prior relationship may inherit a portion of the community property alongside or ahead of the surviving spouse.
If there is no surviving spouse, the children inherit next. The estate is typically divided per capita, meaning it is divided equally among them.
The Unique Problems Facing a Child with Special Needs
Equal shares create serious difficulties when one child has a disability. That child often needs more resources than siblings, yet intestacy law makes no exception. An outright inheritance can also push the child over the strict $2,000 resource limit for Medicaid and SSI, resulting in the loss of essential benefits. The shortfall may then fall on the other siblings, creating an unfair and lasting financial burden.
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Three Practical Ways to Provide Better Protection
Families can take deliberate steps so that equal does not become inequitable:
- Create a Will
A will lets you decide exactly who receives what. You can direct greater support to the child who needs it most. Avoid leaving money outright to a person with a disability, as this can disqualify them from benefits.
- Use an ABLE Account
Texas opened its ABLE program in 2018. These tax-advantaged accounts are available to individuals whose disability began before age 46. Funds generally do not count against the Medicaid asset limit, and the first $100,000 is disregarded for SSI. The annual contribution limit is $20,000 in 2026.
- Establish a Special Needs Trust
A third-party special needs trust is one of the strongest tools available. It can be funded during life or through a will at death. Properly structured, it preserves eligibility for Medicaid and SSI and is not subject to Medicaid payback. The trustee has clear authority to use the assets solely for the beneficiary’s benefit.
These tools are often combined. A will can pour assets into a special needs trust, and the trustee can later contribute to an ABLE account within annual limits.
The Value of a Complete Plan
A simple will is better than no plan, but the strongest protection comes from integrating the will into a full special-needs plan. Coordinating a will, ABLE account, and special needs trust according to the family’s specific situation can prevent confusion, conflict, and hardship later. Taking action now gives a child with special needs greater security and eases the burden on the rest of the family.
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This Blog is for educational purposes only — it’s not personal legal or financial advice. Always talk with a qualified estate planning attorney and special-needs planning professional about your own situation.