Probate is the court-supervised process of settling a deceased person’s final affairs. It is a common misconception that having a valid Will avoids probate at death; however, this is not necessarily true. See Hazards of Will Planning for more information. Probate proceedings can be expensive and time-consuming. Additionally, the court proceeding and associated documents are all a matter of public record. Many people choose to avoid probate in order to save money, spare their heirs a legal hassle, and keep their personal affairs private.
Joint Tenancy with Rights of Survivorship is a form of real property ownership, most often found between spouses. Joint tenancy (or TBE) has the advantage of avoiding probate at the death of the first spouse. However, the surviving spouse should not add the names of other relatives to their assets without first seeking legal counsel. Doing so may subject the real estate to loss through the debts, bankruptcies, divorces and/or lawsuits of any additional joint tenants. Doing so may also trigger unintended and avoidable gift tax liability. Joint tenancy planning also may result in unnecessary death taxes on the estate of a married couple.
The most common form of ownership between spouses in Texas is Community Property. While there are clear advantages to this form of ownership over Joint Tenancy, owning property with your spouse as Community Property does not necessarily avoid probate. See Revocable Living Trusts in "Plain English" to learn more how you can avoid probate.
The document a person signs to provide for the orderly disposition of assets after death. Wills do not avoid probate. Wills have no legal authority until the willmaker dies and the will is delivered to the Probate Court. See Will Based Estate Planning to learn more.
In Texas, this is sometimes called Directive to Physicians. A living will allows you to state your wishes in advance regarding what types of medical life support measures you prefer to have, or have withheld/withdrawn if you are in a terminal condition (without reasonable hope of recovery) and cannot express those wishes. Oftentimes a living will is executed along with a Medical Power of Attorney, which gives someone legal authority to make your health care decisions when you are unable to do so.
If you die without a Will (to die intestate) and if your assets doing avoid probate by some other means, such as a Living Trust, the Texas legislature has already determined who will inherit your assets and when they will inherit them. And even though you may not agree with this default Texas “Will,” over half of all Texas currently use it. Intestacy will generally cost your family substantially more money and require more time to complete than if you die with a will (to die “testate”). To avoid probate altogether, you should consider creating a Living Trust. See Revocable Living Trusts in "Plain English" for more details.
You may avoid probate on the transfer of some assets at your death through the use of beneficiary designations. Laws regarding what assets may be transferred without probate (non-probate transfer laws) vary from state to state. Some common examples include life insurance death benefits and bank accounts.
You may avoid probate on the transfer of some assets at your death through the use of beneficiary designations. Laws regarding what assets may be transferred without probate (non-probate transfer laws) vary from state to state. Some common examples include life insurance death benefits and bank accounts. While some try to avoid probate by merely using beneficiary designations, you may not, however, name a beneficiary on the deed of your Texas real estate. Avoiding probate is just one of the many benefits of using a Living Trust. See Revocable Living Trusts in "Plain English" for more details.
A Durable Power of Attorney is a legal document which gives authority to your agent to make financial decisions for you, even if you cannot. If you are incapacitated without a Durable Power of Attorney, then you and your family may be forced into a probate proceeding known as a court guardianship. This is the court proceeding where a judge determines who should make these decisions for you under the ongoing supervision of the court.
Even though Powers of Attorney for financial decisions have existed in Texas for over 150 years, these legal documents suffer from a serious defect in the law. That is, there is no requirement that a third party accept this document. In fact, many banks, brokerages, and title companies (to name a few) won’t accept a Power of Attorney. This little known, but very serious, problem can be avoided using Living Trust planning. See Revocable Living Trusts in "Plain English" for more details.
This is an agreement with three parties: the Trust-makers, the Trustees (or Trust Managers), and the Trust Beneficiaries. For example, a husband and wife may name themselves all three parties to create their trust, manage all the assets transferred to the trust, and have full use and enjoyment of all the trust assets as beneficiaries. Further "back-up" managers can step in under the terms of the trust to manage the assets should the couple become incapacitated or die. Special provisions in the trust also control the management and distribution of assets to heirs in the event of the trustmaker's death. With proper planning, the couple also can avoid or eliminate death taxes on their estate. The Revocable Living Trust may allow them to accomplish all this outside of any court proceeding. See Revocable Living Trusts in “Plain English” for more details.
Whether you are young or old, rich or poor, married or single, if you own titled assets, such as a house or bank account, and want your loved ones to avoid court interference at your death or incapacity, consider a revocable living trust. A trust allows you to bring all of your assets together under one plan.
Vacek & Thain, PLLC serves Texas families with their estate planning, estate tax planning, charitable planning, revocable living trusts, irrevocable trusts, Heritage trusts, wills, power of attorney, family limited partnerships, advanced asset protection planning, declaration of guardian for minor children, healthcare documents, will based estate planning and the hazards of will planning, special needs estate planning, estate administration and trust administration. Contact Vacek & Thain, PLLC if you or your loved ones reside in the Houston, Texas area, including: Katy, Cinco Ranch, Mission Bend, Pecan Grove, Richmond, Rosenberg, Greatwood, Sugar Land, Meadows Place, Bellaire, Fresno, Pearland, South Houston, Spring Valley Village, Pasadena, Clear Lake, Friendswood, and more!
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