Probate Assets

When someone passes away, before any of their heirs receive anything that the deceased intended to leave them, the estate must pass through probate. While probate may be unavoidable to some extent, there are probate avoidance strategies that can reduce the amount of assets that must be probated, which can speed up the process and reduce the overall cost of probate. At the Houston estate planning law firm of McCulloch & Miller, PLLC, our dedicated probate lawyers have extensive experience helping clients simplify the probate process. With our help, you can ensure that your loved ones are not burdened by unnecessary probate procedures.

In Texas, the general rule is that any asset referenced in a person’s will must go through probate. However, there are two classes of assets that do not need to pass through probate: non-probate assets and exempt assets.

Non-probate assets do not need to be probated due to the type of ownership interest the deceased had in the assets. For example, retirement accounts and life insurance policies may be non-probate assets, provided there is a beneficiary listed on the account or policy. Similarly, any bank or brokerage account that has a payable-on-death designation will automatically transfer to the beneficiary without the need for probate. Real estate can also be a non-probate asset if the property is owned as joint tenants with a right of survivorship. Finally, assets properly transferred into a trust are removed from the probate requirement.

Exempt assets refer to a relatively small but important group of assets that Texas lawmakers have determined do not need to be probated. A few examples of assets that are exempt from the probate requirement include:

• A home (when it is being transferred to the deceased’s surviving spouse or children);
• Clothing;
• A certain amount of jewelry;
• One vehicle;
• Farming equipment;
• Two firearms;
• Books; and
• Tools.

Thus, by restructuring ownership interests, one can effectively remove many types of assets from the probate estate.

Assuming that you have assets that are not exempt, you may be able to convert what is otherwise a probate asset into a non-probate asset. There are a few different types of probate avoidance strategies, including:

• Creating a revocable living trust and transferring assets into the trust;
• Retitling certain assets to include a joint owner; and
• Adding transfer-on-death or beneficiary designations to bank and brokerage accounts.

Yes, in some situations, avoiding probate is important because it may save families a significant amount of time and expense. For example, the fewer probate assets one has in their estate, the simpler the probate process will be. This means that there are fewer concerns about creditors making a claim to the assets and a reduced chance that someone will contest the will, holding up the probate process. Not only can an estate encounter snags along the way that delay the process, but these delays typically result in an estate needing to incur additional legal fees and court costs.

If you are currently in the estate planning process and want to learn more about converting probate assets to non-probate assets, reach out to a dedicated Houston probate lawyer at McCulloch & Miller, PLLC. At McCulloch & Miller, PLLC, we’ve assembled a dedicated team of estate planning attorneys with significant, hands-on experience helping clients avoid the probate process. We understand that you will likely have questions, and our lawyers are more than happy to set aside time to answer them. The first step towards reducing your probate assets is to call McCulloch & Miller, PLLC, to schedule a confidential, no-obligation consultation with one of our probate attorneys. You can reach us at (713) 333-8900. You can also connect with us through our online contact form.