Texas probate is rather simple compared to some other states, but still, it can be worth it to avoid having to go through probate even in our state. This blog will discuss probate: understanding the process and how to avoid it. A Texas estate planning attorney could draft the legal documents you need to avoid probate.
The Probate Process in Texas
The simplest type of probate in Texas is one that uses an independent administration process. The court will appoint someone to serve as the Administrator of the estate. The Administrator files an inventory of all the estate assets and a list of debtors of the estate (people or companies who owe the estate money) with the court.
Once these items get filed, the Administrator completes all the remaining steps, like paying valid debts of the estate, filing tax returns for the estate and the decedent, and distributing the net assets to the beneficiaries, without having to get approval from the court. Assuming that everything goes smoothly, the process can get completed in as little as six months.
Sometimes, the probate process takes significantly longer. Some estates cannot use independent administration. Any disputes or will contests can delay the process. If the will cannot get located, the court will have to step in.
If the estate has to go through “dependent administration,” the Administrator will have to write many reports, attend hearings, and get court approval for every step of the process. Dependent administration and disputes increase administration costs significantly and take much longer than independent administration.
Ways to Avoid Probate in Texas
Your estate does not have to go through dependent or independent probate administration if you take certain steps ahead of time. Here are four of the most common ways to avoid probate in Texas:
- Make a living trust. You could make a revocable living trust instead of a will. Your trust only has to get filed in probate court if it gets contested. Staying out of court keeps the terms of your trust private, as opposed to a will, which becomes public record when filed in court. The person who serves as trustee can administer your estate according to the terms of your trust document without the approval or supervision of the court.
- Designate beneficiaries. Life insurance policies and retirement accounts ask you to designate a beneficiary for these assets. You do not want to leave the beneficiary designation blank on the account form because, with no named beneficiary, the asset will have to go through probate. When you select a beneficiary, the asset goes directly to the recipient when you die, which gets money to your beneficiary much quicker than it would through the probate process.
- Transfer on Death or Payable on Death. Similar to beneficiary designations, when you name someone as the Transfer on Death (TOD) or Payable on Death (POD) beneficiary of your bank account or investment account, the financial institution changes the title of the account to the person you selected to receive the asset upon your death.
- Joint property. When you owe property jointly with rights of survivorship, the property does not go through probate. The other joint owner automatically owns the asset when you pass on, without further action required.
You can work with a Texas estate planning attorney to craft a plan that best suits your needs and avoids probate. Get in touch with our office today for help with your case.