8 Clever Tactics to Avoid Probate and Keep Your Money Safe

Probate can be a lengthy and costly process in Texas. The average Texas probate takes 6-12 months to complete, and attorney fees, court costs, appraisal fees, and executor commissions can quickly add up.

Fortunately, with proper estate planning, many people can avoid probate in Texas completely or at least simplify the process significantly.

In this guide, we’ll overview 8 strategies Texans can use to avoid probate and settle an estate without court intervention. We’ll also answer common questions, like whether you still need probate with a will, and provide key takeaways to minimize hassle for your loved ones.

What Does Probate Mean?

Probate is the legal process for reviewing and validating a deceased person’s will, resolving any challenges or disputes over the will, inventorying assets, paying outstanding debts and taxes, and distributing remaining assets to beneficiaries.

The probate process takes place in the county where the deceased lived and is overseen by the local probate court and a probate judge. The executor designated in the will or an administrator appointed by the court assumes the responsibility for fulfilling probate obligations.

In Texas, probate is required for assets owned by the deceased. This can include real estate, vehicles, financial accounts, and personal belongings. Assets with designated beneficiaries like life insurance or retirement accounts bypass probate.

Why Would You Want to Avoid Probate in Texas?

There are several reasons why Texas residents may want to avoid probate if possible:

• Costs – Attorney fees, executor fees, court costs, and appraisal fees can easily total 3-5% of the estate’s value.
• Delays – The average Texas probate takes 6-12 months. Some complex estates drag out far longer. This delays beneficiaries from receiving inheritances.
• Privacy – Probate records are public, so anyone can access details on assets, debts, heirs, and more. This eliminates privacy.
• Family disputes – The probate process can exacerbate family conflicts over the estate or the validity of the will. This causes angst at a difficult time.
• Creditor claims – The probate process notifies creditors, who may file claims against the estate even if debts are old or expired. This complicates things.

For these reasons, avoiding probate through proper estate planning is usually advisable for Texas residents.

How to Avoid Probate in Texas: 8 Strategies

Here are 8 of the most effective strategies and estate planning tools Texans can use to avoid probate:

1. Use a Revocable Living Trust

A revocable living trust is one of the best ways to avoid probate in Texas. With a living trust:

• You (the grantor) transfer assets like real estate, accounts, and investments into the trust.
• You designate beneficiaries who will inherit the trust assets when you pass away.
• You name a trustee (often yourself initially) to manage the assets according to the trust terms.
• Upon your death, the trustee distributes assets directly to beneficiaries, bypassing probate.

Living trusts avoid probate, are private, and allow you to outline detailed distribution wishes. The downsides are the initial time/cost of creating the trust and retitling assets.

2. Own Property Jointly with Survivorship Rights

Owning major assets like real estate or vehicles jointly with survivorship rights avoids probate. Joint ownership usually takes two forms:

• Joint tenancy – When a joint tenant dies, their ownership stake automatically transfers to the surviving joint tenant(s). No probate needed.
• Tenancy by the entirety – A form of joint ownership for married couples. When one spouse dies, the surviving spouse automatically receives full ownership.

The downside of joint ownership is it removes flexibility to leave the asset to other beneficiaries. Creditors of any joint owner could also possibly access the asset.

3. Name Beneficiaries for Non-Probate Assets

Certain assets allow you to name beneficiary designations that transfer the asset directly to heirs upon death, avoiding probate.

Common accounts to designate beneficiaries include:

• Retirement accounts (401(k)s, IRAs)
• Life insurance policies
• Annuities
• Investment/brokerage accounts
• Bank accounts (with POD designation)

Review all assets with beneficiary options and keep designations updated. Coordinate designations with an overall estate plan.

4. Gift Assets Prior to Death

Gifting assets like real estate, vehicles, or valuables to heirs before you pass away removes those assets from your estate so they avoid probate.

This works best when done as part of an overall plan. Gift tax implications also need consideration for large gifts.

5. Use Payable-on-Death Designations

A payable-on-death (POD) designation on bank accounts or certificates of deposit names a beneficiary who automatically receives the funds upon your death.

POD accounts avoid the time and expense of probate and allow beneficiaries faster access to needed liquidity from your estate.

6. Purchase Life Estate Deed

A life estate deed transfers a property deed into your name for life, then transfers it to beneficiaries upon death.

You maintain full control and use of the property while alive. At death, beneficiaries file the deed to claim ownership, avoiding probate.

7. Convert to Community Property with Survivorship

Texas is a community property state. Married couples can hold community property with rights of survivorship so that full ownership transfers automatically to the surviving spouse upon one’s death, avoiding probate.

This is simpler than converting to joint tenancy for community property. Consult an attorney to properly convert the current property.

8. Use a Small Estate Affidavit

In Texas, estates valued under $75,000 may be eligible to use a Small Estate Affidavit to collect assets or distribute personal property while avoiding full probate. This simplifies things for small, uncomplicated estates.

Can You Avoid Probate in Texas if the Decedent Had a Will?

Contrary to popular belief, having a will does not automatically avoid probate in Texas. The majority of wills still require probate.

However, probate can sometimes be avoided after death even if the decedent had a will in situations like:

• Assets are left to beneficiaries through non-probate transfers like living trusts or beneficiary designations.
• All assets are owned jointly with rights of survivorship.
• For smaller estates, a Small Estate Affidavit procedure is used.
• In limited cases, the will may be probated as a muniment of title if no debts or other estate administration is needed.

While having a will does not expressly avoid probate, it can allow you to implement transfers or estate planning that reduce probate need. Proper coordination is key.

Work with an Attorney to Avoid Probate in Texas

Texas offers multiple strategies to avoid probate and simplify estate settlement for your loved ones, but the best way to ensure your loved ones skip court proceedings is by working with an experienced probate lawyer.

Our attorneys at the The Titus Law Firm can help you select the optimal strategies to avoid probate based on your unique situation and wishes. This is key to ensuring your estate plan aligns with both Texas laws and your goals.

Our Houston estate planning attorneys have extensive knowledge of Texas probate procedures and laws. We work diligently with each client to implement a customized estate plan that avoids or simplifies probate while protecting your legacy. Contact us today for a consultation.