As estate and probate attorneys in Texas, we understand the burden of dealing with legal hurdles after a loved one's passing. We want to ease that burden by clarifying the process of probating a will and explaining how Texas Horizons Law Group can help.
What Does It Mean to Probate a Will?
Probate is a court-supervised legal process of overseeing the administration of a deceased person's assets. There are five general steps in probating a will:
- Filing an application to probate the will with the appropriate probate court.
- Attending a probate hearing in which the judge will determine the validity of the will and admit the will to probate.
- Notifying beneficiaries and creditors of the probated estate.
- Filing an Inventory, Appraisement and List of Claims.
- Distributing the estate under the terms of the Will.
The assets that are dealt with during probate are called the “estate.” The person who is in charge of the estate is called an “executor” or “administrator.”
Probate Court
A probate court is a specialized court or county court responsible for overseeing probate proceedings. The court deals with legal matters related to estates and ensures that state probate laws are adhered to.
Tips: To find a probate court in your area, just follow this link.
Factors Influencing Probate Law
Here are some key factors that can influence the probate process in Texas:
- Presence of a Valid Will: A valid will streamlines probate by providing clear instructions for asset distribution.
- Type of Assets: Certain assets, such as life insurance proceeds or individual retirement accounts (IRAs) with designated beneficiaries, may bypass probate altogether.
- Solvency of the Estate: Whether the estate has creditors and the amount of money owed by the estate can affect probate decisions.
- Distribution of the Estate: The distribution that is called for under the will of estate property can strongly influence the probate process.
What Are Probate Assets?
The following assets go through the probate process:
- Assets Titled Solely in the Deceased Person's Name: These include real estate, vehicles, and investment accounts solely owned by the decedent, which did not have a valid right of survivorship or beneficiary designation.
- Assets Without Designated Beneficiaries: Bank accounts, stocks, or bonds without a beneficiary designation fall under this category and require probate for distribution.
- Life Insurance Policies: If the policy does not name a beneficiary or designates the estate as the beneficiary, the proceeds become part of the probate estate.
You can streamline probate and ease the path for your heirs by naming beneficiaries for retirement accounts, life insurance policies, and bank accounts.
What Are Nonprobate Assets?
Some assets are not subject to probate and may pass directly to beneficiaries. In Texas, these include the following:
- Property Held Jointly with Right of Survivorship: Upon the death of one owner, the other owner automatically inherits these properties.
- Assets with Designated Beneficiaries: Retirement accounts and life insurance policies with named beneficiaries transfer directly to the designated individuals.
- Assets Held in Living Trusts: Such assets pass according to the trust's instructions, typically without probate involvement.
- Payable-on-Death Accounts and Transfer-on-Death Deeds: Assets with these designations automatically transfer upon the death of the owner.
The process of transferring these assets after a death is relatively simple. For example, you might be able to transfer a bank account by filling out a form and providing a copy of the death certificate and proof of your identity.
Revocable Living Trusts
A revocable living trust is a legal document that transfers ownership of certain assets to a trust during your lifetime. You, as the grantor, can retain control over the trust assets and designate a successor trustee to manage them upon your incapacity or death.
There are many types of revocable living trusts, including the following:
- Grantor Retained Annuity Trust (GRAT): This trust allows you to transfer assets to the trust while retaining the right to receive income from them for a set period.
- Marital Trust: This trust, designed for married couples, allows you to shelter assets from your spouse's estate, potentially reducing the overall tax burden for your heirs.
Consider making an appointment with an estate planning lawyer to determine which type of trust is right for you and your heirs.
Wills vs. Revocable Living Trusts
Choosing whether to include specific assets in a will or a revocable living trust depends on your specific needs and circumstances. Here's a table summarizing the key differences:
Probate Process Overview
The probate process typically involves the following steps:
- Filing the Will: The executor named in the will (or an appointed administrator if no will exists) files the application and will with the probate court.
- Notice to Creditors: Creditors are notified of the probate proceeding, allowing them to file claims against the estate.
- Inventory and Appraisal: The estate's assets are identified, located, and appraised to determine their value.
- Payment of Debts and Taxes: Debts, taxes (including estate taxes if applicable), and funeral expenses, if not already paid for by insurance, are paid from the estate's assets.
- Distribution of Assets: Once debts and taxes are settled, the remaining assets are distributed to beneficiaries.
If applicable, a family allowance may be set aside to support the deceased's immediate family during the probate process.
After distributing the assets, the executor or administrator will close the estate.
How Much Time Does Probate Take?
The duration of a probate proceeding depends largely on how complicated the estate is.
Generally, uncontested cases with a simple will and readily identifiable assets can be resolved within a few months. However, complex estates with disputes or significant assets may take a year or longer.
Probate with a Will and the Executor's Responsibility
When a person dies with a valid will, the document names an executor — the person responsible for managing the probate process. The executor's primary duties include:
- Filing the will with the probate court
- Notifying the heirs
- Identifying and valuing the estate's assets
- Maintaining the assets, such as real estate, during probate
- Paying debts and taxes
- Distributing assets to beneficiaries as outlined in the will
Managing an estate is not easy, and executors may give up hours of their time over months or longer. Executors are thus allowed to charge a reasonable fee for their services.
Probate Without a Will and the Role of a Surviving Spouse
In situations where a person dies intestate (without a last will and testament), the probate court appoints an administrator to manage the estate. This person acts in the same capacity as an executor. But instead of the heirs outlined in the will, the estate is distributed according to Texas intestacy laws.
In some cases, the surviving spouse can administer the estate without going through probate. This informal process may be possible if the deceased had no separate property and if the spouse is the only inheritor and there are no children from outside of the marriage.
Potential Complications Associated with Probate
Probate does not always go smoothly. Here are some potential challenges to consider.
Contested Wills
Wills can be contested in probate court. These challenges might include claims of undue influence, forgery, or missing beneficiaries. Disputes can significantly lengthen the probate process and incur additional legal fees.
Intestacy and Heirship
In the absence of a will, Texas intestacy laws dictate how estates will be distributed. For example, a surviving spouse is generally entitled to the entire estate if the deceased did not have children. When children are involved, the surviving spouse may receive a portion of the estate with the remaining assets to be divided among the deceased’s children, depending on the nature of the property (community vs. separate) and whether the children are from outside of the marriage.
However, the rules regarding separate and community property are a little more complex. Divorce can further complicate matters. Finally, conflicts can arise if the deceased person’s wishes for their estate differ from intestacy laws.
Estate Taxes
Texas does not have a state inheritance tax. However, estates of over $13.6 million may be subject to federal estate taxes.
The probate process can become more complex for these larger estates, as additional steps are required to determine the estate's value, calculate and pay any taxes owed, and ensure compliance with IRS regulations.
Strategies for Streamlining Probate
While probate offers a structured method for settling a deceased person's estate, it can be time-consuming and incur costs such as court fees and attorney's fees. Here are some considerations for streamlining probate:
- Asset Value: Smaller estates may fall below the threshold for probate in Texas.
- Estate Planning: A comprehensive estate plan with a simple will or living trust can simplify the probate process for your loved ones.
- Asset Ownership: Strategic structuring of the ownership of certain assets, such as bank accounts or real estate, can allow these assets to bypass probate.
A Texas estate planning lawyer can work with you to ease the process for your heirs and simplify or even bypass probate, depending on your family structure and your assets.
More Efficient Probate: Consulting with an Attorney
A comprehensive estate plan often incorporates a combination of probate and nonprobate assets. For instance, you can designate beneficiaries for your retirement accounts, include certain probate assets in your will, and create a living trust for other assets. This strategy minimizes probate involvement and expedites the distribution of your estate.
A qualified estate planning attorney can advise you on the best strategies to optimize your estate plan, considering your unique circumstances and asset composition. They can help you:
- Identify assets that require probate and those that can be structured as nonprobate.
- Develop a plan to minimize probate involvement and streamline the inheritance process.
- Draft legal documents like wills, trusts, and beneficiary designations to ensure your wishes are followed.
While you may not be able to bypass probate entirely, you can rest assured that your heirs will not have to wait through the full probate process before gaining access to the funds they need.
