It's actually a commonly-held misconception that "everything goes to the state." A more accurate way to state it is that "without a Will, the state determines where everything goes." The state determines that, though, through its inheritance laws. Here is a brief overview of what happens when an unmarried person residing in Texas dies without a Will:
Did the person have any children or further descendants? If so, everything goes to the children in equal shares. The children of a deceased child would receive that child's share.
If no descendants, were either of the person's parents living? If so, one-half goes to the father and one-half goes to the mother. If a parent is not living, that deceased parent's one-half goes to that parent's children.
If neither of the parents is living, then everything goes to the person's brothers and sisters (generally equally, but half-siblings receive less than full siblings). The children of a deceased sibling (that is, nieces and nephews) receive the share which would have gone to the deceased sibling.
if there is no surviving sibling, then generally one-half goes to paternal grandparents and one-half to maternal grandparents. If a grandparent is not living, that grandparent's share goes to his/her children or further descendants (that is, the deceased person's aunts and uncles, then cousins, second cousins, etc.).
In unusual situations, you might have to go further up the family tree to great-grandparents and down through their descendants.
Only if no relatives of the deceased person can be identified would the deceased person's assets ever "go to the state." I've only encountered this situation once, and that was many years ago.
