How Can I Avoid the Probate Process in Texas?

After a loved one dies, it is hard enough as it is, but you may be concerned about having to endure through the probate process. Probate has a horrible reputation because it is often very long and can cost family members a lot of money. The beneficiaries are not cold and heartless for wanting this process to be over as soon as possible. They may know that they are about to inherit a house, but they also know that they cannot manage this property, and the best time to sell it may be now. This is the type of issue that family members have when it comes to inherited property. There is a solution to this problem. You can set things up through estate planning that keeps your beneficiaries from having to tolerate the probate process. We will explain how to do this in this article so that you save your heirs headaches in the future.

Why Should You Avoid Probate?

Probate is a legal process that causes many families an extreme amount of stress. It is also a highly costly process. For these two reasons alone, many people set out to avoid probate, and you can do it by choosing the right legal arrangements.

How to Avoid Probate in Texas

You may open an account with a bank or a credit union and name beneficiaries who will receive the funds in the account after you pass away. For example, you may open a certificate of deposit and name your significant other as the beneficiary. Your spouse would receive this money without needing to go to probate court.

If you currently have accounts in the bank, you can convert these accounts into POD accounts now. After you name one or more beneficiaries, they will receive the money in your deposit certificates, savings bonds, security deposits, savings accounts and checking accounts. All you need to do to create a beneficiary is let your bank know the name of that person. Then, you will need to fill out the bank’s beneficiary designation form so that the bank can convert the account to a POD account.

Joint Ownership with a Right of Survivorship

Several property types may fall under this designation, including real estate, securities, vehicles and bank accounts. You may co-own these types of properties with a spouse or other person. If one of you passes away while the property is in joint ownership with a right of survivorship designation, the ownership of the property passes to the other person.

This is another way to avoid probate, but you must be aware that the surviving partner will need to retitle the property. For example, if the property is real estate, you may need to submit documents and present the local public land records office with a death certificate for the deceased owner.

Transfer-on-Death (TOD) Deeds

TOD deeds are another avenue available for you to avoid probate. This type of deed transfers assets immediately to the beneficiary after the owner passes away. You will designate a beneficiary for this financial product in the same manner as the other two.

In most cases, a TOD deed does not affect ownership of the property, so you will be able to continue to use the property as you see fit. Your beneficiary will not enjoy the benefit of the property until after you have passed away. If you wish to revoke or change a TOD deed, you will be able to do so. You may also be able to name a beneficiary who will be your beneficiary if the first person passes away before you do. This is known as a “contingent beneficiary.”

Beneficiary Designations

A beneficiary designation is when you name the person who will inherit your bank account, for example, after you pass away. This avoids the probate process because the assets inside a life insurance policy, retirement account or bank account automatically transfer to the person you named as the beneficiary.

You are not always required to name a person as a beneficiary. You can name your estate as your beneficiary if you place your property in a trust. A trust will not be required to undergo the probate process.

If you do not choose a beneficiary designation, then your estate may become the beneficiary. If this were to occur, your estate would have to do what you are trying desperately to avoid and that is go through the probate process. This is a time when you must name a contingent beneficiary. Also, when you name your beneficiaries, you need to be as specific as possible. The best thing to do is write the beneficiaries’ full names. When you write which asset will go to which beneficiary, explain in detail how the asset must be divided.

What Happens if You Don’t Probate a Will in Texas?

You are not necessarily required to probate a will in Texas. However, probate is the only way that you can implement the decedent’s wishes. If you do not take the advice in this article and set your assets up so that probate will not be necessary, then your beneficiaries will not receive their inheritances. The only way that you can distribute the assets in the will is to go through probate. This includes the property that the decedent owned but did not name a beneficiary designation for its transfer.

You can avoid probate when there is a will, but to do this, the estate cannot have any assets. This is why you must place your assets in a revocable living trust. Then, the assets belong in the trust and will be distributed according to the directions in the trust. There is no need for probate in this example. You will also avoid probate if the assets in the will are all community property or assets that are not subject to probate.

If you miss the deadline for submitting a will to the probate court, the court considers the will to be non-existent. The decedent’s assets can still be distributed, but they will be distributed according to the Texas intestate succession law. When this occurs, the state of Texas decides who will receive the decedent’s assets, and it is a nightmare scenario. The state does not need to follow the decedent’s instructions in the will, and this has been the cause of huge rifts between family members.

Fortunately, you can set up a trust and designate beneficiaries to receive your assets easily without the probate process. This is beneficial for everyone and is worth you devoting time to estate financial planning. If you would like to ensure that your family members do not splinter apart after your death, contact us for financial planning services today.