While Texas’s probate process is not as complex as other states, it is still possible to avoid it. If you pass away without a will and leave property and assets behind, they could be probated in accordance with the intestacy laws. To avoid your assets going to people you didn’t intend them to and to prevent them from going through the probate process, you can set up a trust, joint ownership with a right of survivorship, transfer on death deeds, or beneficiary designations.
The Importance of Estate Planning to Avoid Probate
Probate is a legal process during which the court recognizes that a person has died. In some cases of probate, the court oversees the distribution of assets and settling of the estate. The court’s role and others working on administering the estate is to handle the probate administration process.
Your executor or representative will need to file for probate if you have a will. However, this kind of probate is only necessary to verify the will and determine how the estate will be handled. Court oversight isn’t necessary in some cases.
Not all assets have to go through probate. To avoid as many of the complications of probate as possible, consider the following four options to assign your assets to beneficiaries and include them in a non-probate estate.
Revocable Living Trusts
Revocable living trusts are trusts that you can change at any time during your life. When you pass away, the trust takes any remaining assets and passes them on directly to your heirs and beneficiaries.
Revocable living trusts help you protect your privacy, as well as the privacy of your beneficiary while minimizing estate taxes and avoiding probate.
Joint Ownership with a Right of Survivorship
A joint tenancy with rights of survivorship account is owned by two or more people. When one of the people passes away, the ownership of the property passes on to the other account holders. For example, if you have a bank account and add your spouse as a joint owner with the right of survivorship, they’d receive the full account upon your passing. This option allows your surviving beneficiary to avoid probate since ownership is transferred directly.
Transfer on Death Deeds
Transfer on death deeds is another popular way to avoid probate. With a TOD, an asset transfers to the beneficiary at the time of your death. TODs are usually used for brokerage accounts, qualified securities, real estate, or automobiles. What makes transfer on death deeds so beneficial is that you may retain the asset until your death. You can change the beneficiary at any time, and you can also opt to sell a piece of property or close an account whenever you’d like.
Some assets allow you to set up beneficiary designations. With these, the asset will pass directly to the beneficiary at the time of your death. Not all kinds of property can have beneficiary designations. Some that can include:
- Life insurance policies
- Retirement accounts
- Bank accounts
- Securities accounts
- Savings bonds
There may be other kinds of accounts that you can add a beneficiary designation to, which is why it’s a good idea to go over these with someone with legal expertise in estate planning.
Help Your Loved Ones Avoid Probate with the Right Estate Plan
The right estate plan can help you pass on your assets while avoiding the time-consuming probate court process. With the right planning, you can ensure your assets go exactly where you want them to.