When loved ones pass, there are both emotional and financial hurdles you must face. If that loved one has an estate plan in place, it can be helpful during such a trying time.
Though most estates must undergo the probate process, it is possible to employ a few tactics to avoid it. Doing so can be quite beneficial in several different scenarios.
Joint ownership
One of the easiest ways to avoid the probate of certain assets is through joint ownership with a right of survivorship. There are two types of joint ownership in Texas:
- Joint tenancy
- Survivorship community property
In both cases, if one property owner passes, the other owner gains full asset ownership. Since the party owned the property in part before passing, the property is not being transferred, and, therefore, does not require probate. While joint tenancy can be between various parties, survivorship community property is for spouses.
Trusts
Utilizing a trust in an estate plan is another means to avoid probate in regards to any type of asset. While a will allows parties to pass along assets from their estate, a trust sets certain assets aside, separately from the estate. Therefore, those assets are not a part of the estate during the probate process. However, it is important to note and understand that certain trust types may include probate elements or have withdrawal fees.
Transfer on death
As the name indicates, a transfer on death deed allows parties to designate certain beneficiaries to receive specific assets upon their death. Certain bank accounts have payable upon death designations, which automatically transfers the account to a designated beneficiary upon the account holder’s death. In both scenarios, the transfer bypasses the probate process.
While these tactics may work in various situations, there are some instances where there is no avoiding the probate process. If you find yourself in such an instance, make sure you understand the probate process and your rights in it.
