Cory Clements and Ashton Anderson

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When can you avoid probate in Texas?

On Behalf of | May 29, 2024 | Estate Planning

Estate planning is an important task that all adults should complete while they’re still of sound mind and body. A comprehensive plan can outline, among other concerns, what you want to happen to your assets when you die.

For some, the main goal of an estate plan is to ensure their loved ones don’t have to go through the probate process. There are several options that can keep your estate out of probate court if you set them up properly.

Establishing living trusts

A living trust is a legal arrangement where you transfer ownership of assets into the trust during your lifetime. The trust is managed by a trustee for the benefit of the beneficiaries. When you die, the assets in the trust are distributed directly to your beneficiaries according to the terms of the trust. This method can save time and reduce the costs associated with probate. Additionally, living trusts can offer privacy because the details of the trust aren’t made public.

Utilizing non-probate assets

Certain assets can bypass the probate process through beneficiary designations or other arrangements that automatically transfer ownership upon death. These non-probate assets include:

  • Joint tenancy with right of survivorship: Property owned jointly with another person, such as your spouse, with the right of survivorship automatically passes to the surviving joint owner upon your death.
  • Payable-on-death (POD) accounts: Bank accounts and other financial accounts can be designated as payable-on-death, allowing you to name a beneficiary who will receive the funds directly upon your death.
  • Transfer-on-death (TOD) designations: Similar to POD accounts, securities and brokerage accounts can have transfer-on-death designations, enabling the assets to transfer directly to the named beneficiary without going through probate.
  • Life insurance and retirement accounts: Life insurance policies and retirement accounts, such as IRAs and 401(k)s, allow you to name beneficiaries who will receive the proceeds directly upon your death.

In Texas, married couples can hold property as community property with right of survivorship. This designation ensures that upon the death of one spouse, the deceased spouse’s interest in the property automatically transfers to the surviving spouse without the need for probate.

Creating an estate plan that makes it as easy as possible for your beneficiaries to receive what they’re due can give you greater peace of mind. Discussing your situation with a legal representative sooner rather than later can help you to get started.