Probate is the legal process of distributing the assets of a deceased person among their heirs or beneficiaries. It can be a time-consuming and costly process, which is why many people want to avoid it. If you live in Texas, there are several ways you can avoid probate. In this blog, we'll discuss some of the most effective strategies for doing so.
- Create a Living Trust
One of the most effective ways to avoid probate in Texas is to create a living trust. A living trust is a legal document that allows you to transfer your assets into a trust while you're still alive. You can then name a trustee to manage the trust's assets and distribute them to your beneficiaries after you pass away. Because the assets are held in the trust, they don't have to go through probate.
- Joint Ownership
Another way to avoid probate is to own your assets jointly with someone else. For example, you could own your home with your spouse as joint tenants with right of survivorship. When one of you passes away, the other automatically becomes the sole owner of the property without the need for probate.
- Beneficiary Designations
Many financial accounts, such as retirement accounts and life insurance policies, allow you to name a beneficiary. When you pass away, the account or policy will be paid directly to your named beneficiary without the need for probate.
- Payable-on-Death (POD) Accounts
Similar to beneficiary designations, payable-on-death accounts allow you to designate a beneficiary who will receive the account's funds when you pass away. This can include bank accounts, certificates of deposit, and brokerage accounts.
- Transfer-on-Death (TOD) Deeds
If you own real estate in Texas, you can use a transfer-on-death deed to transfer ownership of the property to your named beneficiary when you pass away. This can help your heirs avoid probate and take ownership of the property more quickly.
- Small Estate Affidavit
If the value of your estate is less than $75,000 in Texas, your heirs may be able to use a small estate affidavit to transfer your assets without going through probate.
Probate can be a time-consuming and costly process, but there are several strategies you can use to avoid it in Texas. Creating a living trust, owning assets jointly, using beneficiary designations and POD accounts, and using transfer-on-death deeds are all effective ways to transfer your assets to your heirs without the need for probate. It's important to talk to an attorney to determine which strategy is right for you and your unique situation.