Texas Homestead Law: an Easy Explanation of How it Works

EDITOR’S NOTE:

Many clients ask us about Texas Homestead Law. Typical questions are ‘What does a homestead exemption do in Texas?,’ or ‘Who qualifies for a homestead exemption in Texas.’ In this blog post, we explain what the homestead exemption is, and the basics of how it works in Texas. Remember, however, that if you are doing estate planning or perhaps facing a potential probate, trust, or estate dispute, reach out to one of our Dallas-based attorneys for a consultation. No two situations are alike, and only an attorney consultation can function as the first step towards a correct understanding of the facts and the law.

Texas Homestead Law

Photo credit: jpo via Foter.com / CC BY-SA

THE TEXAS HOMESTEAD – WHAT IS IT?

Homestead law was designed to preserve the family and to protect the head of the family so that he or she could continue to provide support for the family. By specifying certain property as being one’s “homestead”, and making that property exempt from the claims of most creditors, Texas gave preferential treatment to the independence and security of home ownership as a place of residence for the family. Court decisions have ruled that “homestead protections are liberally construed to prevent people from losing their homes”. Texas law provides for both an urban homestead and a rural homestead. The rural homestead will be 100 acres per person or 200 acres for husband and wife. Improvements are included within the protections provided by the homestead for both urban and rural. The urban homestead consists of one or more contiguous lots subject to a maximum of ten acres. A person cannot claim both a rural homestead and an urban homestead.

WHAT ARE THE RESPONSIBILITIES OF A PERSON WHO CLAIMS A HOMESTEAD UNDER TEXAS LAWS?

A surviving spouse asserting a homestead is responsible for: 1.) the expenses for upkeep of the property such as ordinary repairs. A person claiming a homestead is not entitled to reimbursement for improvements made voluntarily. 2). the payment of ad valorem (property) taxes. 3.) the payment of interest on any mortgage for which the property is secured as collateral. However, the person claiming the homestead is not legally required to make payment of the mortgage principal of the amount of any mortgage payment attributable to the “principal”. 4.) A person claiming Texas homestead is not required to make payment of insurance premiums for extended casualty insurance. There is no requirement to make that payment unless they own part of the underlying interest in the property.

UNDER WHAT CIRCUMSTANCES CAN A HOMESTEAD RIGHT BE WAIVED OR ABANDONED?

The general legal principal is that there must be clear evidence there has been “a total abandonment and intention not to return”, according to a 1942 Texas case. In order to constitute an abandonment that would subject the homestead property to sale or reversion to the remaindermen (often children from a previous marriage), there must be a voluntary leaving of the residence. Generally speaking, abandonment is determined on a case by case basis. In cases of physical absence from the property, the lack of a definite intention to return and occupy the homestead is a controlling fact.

Compliance with many of these guidelines can be accomplished by setting up appro¬priate estate accounts and handling the estate accounting matters in the manner described by the attorney representing you.

EDITOR’S SUMMARY

In this blog post, we learned some of the basics of Texas Homestead Law. Hopefully, you have a better understanding of what the Texas homestead exemption is, and how it works. If you are facing a potential estate, trust, or probate dispute or even potential litigation, reach out to one of our Dallas-based probate attorneys for a consultation. We also have a convenient office in Plano, Texas, where we can meet to discuss the facts and law of your potential issue.

 


Photo credit: jpo via Foter.com / CC BY-SA