Buda, TX Estate Planning Law Firms & Lawyers

In Texas a surviving spouse has a lifetime right of occupancy in the home.   Your father's Will may or may not say that he contracted with your mother not to revoke the Will in order to provide for her and for children of their marriage.  If it does not, he could Will the home to his new spouse.  You are correct that she could give up her right to a community property interest in the home in a valid prenup (or a valid Marital Property Agreement).  She would still have a lifetime right of occupancy and, if she paid on the mortgage or made other financial contributions, a right to be reimbursed for them.

Whether or not you had children together is irrelevant.  Whether he had a child with someone else affects how his separate real property, if any, passes under the Texas laws of descent (real estate) and distribution (personal property). Pensions, 401(k)s and IRAs pass to the designated beneficiaries.  If you are named as the beneficiary, they pass to you.  If no beneficiary is named, pensions pass according to the rules of the pension plan, 401(k)s pass to the surviving spouse and IRAs pass to the estate.  Since IRAs are usually created with community assets, they are usually viewed as community property.  The surviving spouse retains her 50% community property interest.  The deceased spouse's community property interest passes according to his Will or, if there is none, according to the Texas laws of descent and distribution. In Texas, even if the home was separate property, purchased before the marriage and paid for with separate funds, the surviving spouse has a right to live in it for life. Please see a local probate attorney about probating (proving) your husband's estate.                

Heirs are not responsible for paying a decedent's debts. Hopefully the life insurance is payable to one of you, not to his estate. In the latter case, the $ coming into his estate would be available to pay creditors before it got to you guys.