Estate Planning

If there is no will, the decedent’s estate is administered intestate. Our function is to make every effort to guarantee that our client’s desires or their family member’s desires are brought to fruition and that the decedent’s estate is administered properly with the clarity and definition as intended and required.

PROBATE ASSETS VERSUS NON-PROBATE ASSETS

WHAT ARE PROBATE ASSETS?

Probate Assets are those assets that are owned by the Decedent’s estate on the date of death and only can be transferred through probate proceedings.

For example, if a house is owned by a Husband and a Wife and then the husband dies, his share of the house is a probate asset and, as a rule, his Will must be probated in order for the Wife to become the owner of her Husband’s fifty percent interest. (Of course there are other manners of transferring interests if there is no Will but often they are more expensive processes.)
Another example of a probate asset would be if a person dies and has money in a bank checking or savings account in her name alone. The only way in which the bank will release this money to those entitled to the funds is to probate that estate and obtain a court order stating to whom the property of the estate is entitled.

WHAT ARE NON-PROBATE ASSETS?

Non-Probate assets are those assets that pass to individuals based on the terms of the document the decedent signed while he was alive, thereby passing automatically on the decedent’s death.

For example, if there is a life insurance policy naming the beneficiaries to whom the proceeds are to be paid upon the decedent’s death, the beneficiaries simply need to give a copy of a death certificate to the company and they will receive the funds without the necessity of probating the decedent’s estate. (However, if there is no beneficiary named on the policy, the proceeds become a probate asset and will be paid only after a probate).

Another example of a non-probate asset would be a checking or savings account that named either a joint tenant with right of survivorship (JTROS) along with the decedent, or accounts on which the decedent named beneficiaries. The difference between the two is that if you are named as a JTROS then you have access to the account even while the decedent is alive and need do nothing after his death to get this money. It is automatically yours. If you are named as a beneficiary you have no rights to the money while the decedent is alive and you will have to supply the financial institution with a copy of the death certificate, at which time it will write a check to the beneficiaries named on the account.

CAN PROBATE ASSETS BE CONVERTED INTO NON-PROBATE ASSETS THEREBY AVOIDING PROBATE?

Yes, they can! How to do this with money has been described above. But how do you do this with real estate. There is a provision in Texas law for an Enhanced Life Estate Deed, commonly referred to as a LADY BIRD DEED. In this type of deed the Seller conveys his property to the Buyer but retains ownership until the Seller dies at which time the property AUTOMATICALLY transfers to the Buyer. This type of transaction has the added benefit of allowing the Seller to retain the homestead exemption and over 65 exemption for real estate taxes until his death and further, this deed takes the property out of the decedent’s estate so that MEDICAID CANNOT MAKE A CLAIM ON IT.

TO BE CLEAR, OUR OFFICE RECOMMENDS THAT EVERYONE HAVE A WILL even if you think that you have turned all of your assets into non-probate assets. The Will can be a “lifesaver” (excuse the pun) just in case…

THE INFORMATION CONTAINED HEREIN IS NOT TO BE CONSIDERED TO BE LEGAL ADVICE. SHOULD YOU HAVE ANY QUESTIONS OR WOULD LIKE FURTHER EXPLANATIONS REGARDING THE PROBATE PROCESS, PLEASE CALL OUR OFFICE AT: 915-779-3619