Given how hard most people work to pay their bills and save up for their retirement years, you would think all of us would want to maintain strict control over who will inherit from us. Yet statistics reveal that only about forty percent (40%) of Americans have faced their mortality and asked their lawyers to help them create Wills.
When we make this error, we increase the chances that relatives we don’t know very well – or perhaps even like – may one day receive all our wealth. That’s regrettable since most of us have specific family members who would benefit the most from an inheritance. And great charities and faith-related beneficiaries can always use our funds to bless many others.
Hopefully, this article will help you see the advantages of meeting with your Houston estate planning attorney to create a first Will — and then later update it as your estate grows.
What are the five ways Texas wealth is often distributed when there is no Will?
- Under the state’s intestate succession laws. While these are useful, they do not let you determine who will inherit from you. Furthermore, if you own any of the following types of accounts or property, you must make sure that you’ve provided an updated list of beneficiaries to those who maintain these accounts (or other forms of wealth) on your behalf.
- Proceeds from a life insurance policy
- Retirement account funds that may include a 401k, IRA — or another, similar type of account
- Property that you and another person own together
- POD or payable-on-death account funds
- Property that’s already held in some type of living trust
- Through the filing of an Affidavit of Heirship. This approach can normally only be used when the assets requiring a title transfer are real estate. However, you can sometimes use this type of affidavit for non-property assets – depending on the rules of the institution that currently manages those items. Be prepared to discuss this topic in detail with your lawyer since there are certain limitations involved with using this type of affidavit.
For example, some title companies will not accept these types of affidavits when you’re trying to establish a legally valid chain of title for property. In addition, since no personal representative will be appointed, there won’t be anyone who can manage the estate’s assets and pay all required debts. Also, two witnesses must sign this type of affidavit and both are liable for any false statements that may be contained in it.
- By filing a Small Estate Affidavit. If your attorney takes this approach, he’ll first have to determine if the estate is solvent and if it’s worth $75,000 or less. In addition, the affidavit can only be used to transfer title to a homestead. Furthermore, there will be no appointed personal representative to collect all the assets, pay all required debts and deal with necessary third parties. Financially responsible witnesses must also sign this type of affidavit.
- Using a probate court proceeding called a determination of heirship. The advantages of this approach include having a hearing, the presentation of evidence and a court issuing a judgment accepting or rejecting all submitted affidavits of heirship. However, some relatives eager to settle an estate may find this approach less appealing since it can be rather costly – mainly due to the need to file various pleadings with the probate court. You must also coordinate everything with the court appointed attorney ad litem who will investigate whether there’s any possible fraud regarding the filed affidavits of heirship. However, obtaining a court ruling that specific parties are lawful heirs is very useful;
- Handling the matter as either an independent or dependent administration of the estate.
The difference between these two types of administrations is based on the degree to which the probate court must be involved in the proceedings. The term “independent administration” simply means that the court has minimal involvement.
Whichever approach is chosen, there will need to be an appointment of a personal representative who is qualified to receive letters of administration provided by the probate court. These “letters” allow the personal representative to collect all the assets and pay all the debts. The biggest drawback of this approach is that it’s often the most expensive way to handle the estate of someone who died without a Will.
Hopefully, this general information has helped you see that creating a Will is one of the best ways to move forward into a more stable financial future.
Please feel free to contact one of our Murray Lobb lawyers so we can answer any questions you may have about settling someone else’s estate — or drawing up a Will (or full estate plan) of your own. We appreciate the opportunity to help our clients handle these types of matters and look forward to hearing from you soon.