Can your estate plan help you to avoid probate in Texas?
Our probate and estate administration attorneys at Murray Lobb routinely provide advice to our clients in simple and complex probate and estate administration matters, providing representation from start to finish – from the initial appointment of fiduciaries through the final closing of the estate.
We provide a range of services to our probate and estate clients including:
- Clearing titles
- Satisfying creditors
- Paying expenses
- Collecting debts
- Organizing an estate’s assets
- Heirship determinations
- Distribution of property
- Representation in court proceedings
We also assist our clients in estate planning, wills, trusts, advance directives, and powers of attorney, and, whenever possible, we may be able to help your family and heirs avoid the probate process entirely.
Below, we will discuss why you may want to avoid probate and some methods we can use to help you avoid probate in Texas.
Reasons You May Want to Avoid Probate
There are many reasons to avoid the probate process when it is possible, including:
- Delay – probate can be a lengthy process that may take months or years, and, when the estate is complex or one of the heirs challenges the will, it can take longer.
- Financial hardships – while an estate makes its way through the probate process, relatives and heirs are waiting to receive their inheritance.
- Costs – the court will take a portion of the estate in probate fees, and the dependents of the estate will need to pay attorney fees throughout the process.
- Publicity – probate proceedings are a matter of public record, and anyone can access information about the estate including the beneficiaries, assets, liabilities, and representatives.
- Lawsuits – once a probate case has been opened, heirs, relatives, or creditors may decide to contest the will, make claims against the estate, or file lawsuits against the estate.
- Creditors – once a probate case has been opened, notice is sent to all creditors who can then make claims against the estate.
- Peace of mind – the last thing a grieving family needs is to be caught up in an extended years-long probate case. Whenever possible, it is in the family’s best interests to resolve questions of inheritance quickly and painlessly.
Methods for Avoiding Probate in Texas
Although it is impossible to avoid probate in every case, there are methods and strategies we can use when planning your estate to maximize the odds of staying out of probate court.
For example, in appropriate cases, our attorneys can help you to:
Create Living Trusts
A trust is something like a container that we can use to hold assets. You can place assets into a trust, name heirs who will receive the assets upon death, and name a successor trustee who will manage the trust after your death.
During life, the assets will be managed according to the terms of the trust, and, after death, the assets will pass to the beneficiaries – without going through probate.
Payable on Death Accounts
You can create bank accounts that are designated as “payable on death.” Then, after death, the funds will pass to the designated beneficiary without going through probate.
This is not limited to bank accounts – many other types of accounts in Texas can be designated as payable on death, eliminating the need for them to pass through probate.
Transfer on Death Deeds
Similar to a payable on death account, you can create a transfer on death deed for your property. (See Tex. Estates Code §§ 114.001). Although the beneficiary has no rights to the property during the owner’s life, the property will pass to the beneficiary upon death without going through probate.
Transfer on Death Vehicle Registration
In Texas, you can also register your vehicle as transfer on death, name the beneficiary, and they will automatically inherit your vehicle after your death without going through probate.
Joint Tenancy
A joint tenancy agreement can be used to protect your home from probate – when either tenant dies, their interest in the property will automatically pass to the other tenant. (See Tex. Estates Code § 121.152)
It does not matter if the co-owners are married, but they must 1) both have interests in the property and 2) sign a joint tenancy agreement.
Survivorship Community Property
When a couple is married, Texas law allows for community property to pass to the surviving spouse without going through probate. (See Tex. Estates Code §§ 112.051)
Transfer Your Property While You are Alive
Although this may seem obvious, you can transfer assets to your heirs before your death to avoid the probate process.
We can also assist you in setting up trusts (see living trusts above) that allow you to continue to benefit from your assets during your lifetime, but automatically transfer your assets upon your death without going through probate.
Designate Beneficiaries on Life Insurance and Retirement Accounts
Benefits from your life insurance and retirements accounts should pass directly to the beneficiaries upon death without going through probate – you can purchase additional life insurance policies to designate beneficiaries and avoid having your assets go through probate.
Small Estates
If the remaining estate is small enough – less than $75,000 in property or the estate’s debts exceed its worth, the administrator can close the estate by filing a small estate affidavit and avoid the probate process.
Please feel free to contact one of our Murray Lobb attorneys to obtain our legal advice regarding how to avoid probate court in Texas. We also remain available to help you with all your general business, corporate, and estate planning needs.