Ways to Avoid Probate

People often come into our office because someone close to them has passed. Their mom, dad, or loved one drafted a Will leaving everything to the client walking through the door. Often these clients are dismayed to learn that it will be months and cost a good amount of money before they can carry out the terms of their loved one’s will.This is the nature of Probate in Texas.

Sure, Texas allows independent administration, one of the least troublesome and court-involved probate processes in the nation. However, as with all things involving the courts, time, effort, and money are required expenditures. If you rely on a Will alone to transfer your estate’s assets, it will not matter how clearly you are entitled to your loved one’s assets or how little the assets in the estate are worth, you will still need to probate the Will.

The Silver Lining? With proper estate planning, the probate process can be avoided completely. You see, the probate estate of a deceased individual does not include all of their assets. For example, life insurance policies that designate an individual other than the deceased will pass automatically non-probate to the designated individual without the need of opening probate proceedings. What many people do not realize is that you can take a similar non-probate approach with the majority of your assets.

Bank Accounts:

Bank accounts are an easy asset to change from probate to a non-probate distribution. Every bank will have an internal system that allows you to fill out a form to allow you to create a Transfer on Death Designation (TOD). When you execute a TOD, all your designated beneficiary will need to do to get access to that bank account is their driver’s license and a copy of your death certificate. Easy-Peasy.

Cars:

Similar to a bank account, the DMV has its own forms you can complete to designate a transfer on death beneficiary. These forms can be found on the DMV website. You will need to complete an Application for Texas Title and/or Registration (Form 130-U) to let the DMV know you are wanting to add a beneficiary and the Beneficiary Designation for Motor Vehicle (Form VTR-121) to make that designation. Additionally, if you share the vehicle with another person, you will need to execute a Right of Survivorship Ownership Agreement for Motor Vehicle (Form VTR-122), to ensure that the car title transfers only after both owners have deceased. Once all of these forms are on file with the county tax office, your designated beneficiary will have title vested directly to them after informing the office of your passing.

Real Property:

Whether it be your family home of 20 years or an empty .1-acre lot of land in Wood County, relying on the probate process to transfer real property can be burdensome on your beneficiaries. As mentioned before, the probate process can take up to 6 months to transfer title of the property, and that 6-month time window is based upon when courts are working most efficiently (Covid has caused expected probate times to fluctuate wildly). After you pass, but before your beneficiaries gain title to the home, the property is still racking up utility bills and property taxes. This is particularly annoying for beneficiaries who intend to sell the home because there will be a months-long window where the house turns into a money pit before they can even put it on the market.

Thankfully, Texas law recognizes Lady Bird Deeds, also known as Revocable Life Estate Deeds. A Lady Bird deed operates as most deeds do. You designate someone to transfer property too and you file the form in the county records office. However, a Lady Bird deed is revocable up to the time of your death. This means you are still free to refinance, revoke beneficiary designations, or sell the home as you please. However, once you pass, the transfer becomes permanent and title transfer’s direct to your designated beneficiary without the need to initiate the probate process! This can save months and thousands of dollars your beneficiaries would otherwise have to expend in the probate courts.

There are many different steps available for you to make life easier on your friends and families whenever your life ends. Law work can be long, boring, confusing, and expensive. Requiring your family to do law work while grieving for your loss can be overly burdensome. Talk to an Attorney at Dyer & Mauro and we can help figure out how to take the load off your family’s back. Take the extra step to protect your family and call today.