July 18, 2018

Sometimes, even when a person has drawn up a will, probate of the will may not be necessary. Advance planning with probate-alternative documents can avoid the need for probate in many cases.

Some Pre-Death Planning Examples Are:

  1. A Transfer on Death Deed or “Lady Bird” Deed
  2. Beneficiary Designations on Retirement Accounts, Life Insurance, Brokerage Accounts and The Like
  3. A Trust Arrangement

1. A Transfer on Death Deed or “Lady Bird” Deed

AdobeStock_60296922Texas allows real estate to be transferred to the desired beneficiaries automatically on the death of the owners by either of these two types of deeds. The transfer on death deed is a statutory form the Texas legislature approved which has limitations on the ability of the owners to transfer the property during their lifetimes without the consent of the “remaindermen,” or those persons who would receive the property on the death of the owners. The Lady Bird deed does not require that consent and gives the owners very broad power to deal with the property during their lifetimes. These are handy tools to eliminate the need for probate where the primary asset is real estate.

2. Beneficiary Designations on Life Insurance, Brokerage Accounts and The Like

A great many assets held by most people can be transferred on death to the desired beneficiaries by making a beneficiary designation or specifying to whom they are payable on death. This includes retirement plans, which are frequently a large part of a person’s estate, bank accounts, CD’s, brokerage accounts, and stocks or bonds. We recommend that primary and secondary beneficiaries be named so that if the primary beneficiaries predecease the owner, a probate will not be necessary for the asset to pass to the next level of desired recipients.

3. A Trust Arrangement

A revocable or irrevocable trust set up by the owner is an excellent tool to avoid probate. The trick, however, is to be sure that all assets have been placed in the trust prior to your death, or the probate of a “pour-over will” that transfers the assets into the trust after death, will be necessary. Many people like the privacy a trust provides for the transfer of assets on death because it does not ever have to be made a public record, in contrast to a will, which does have to be filed at the county courthouse.

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We believe having a will, as a backup if an asset has not been taken care of by one of the above probate alternatives, is always a smart idea. However, if you have taken the steps outlined above, probate may not be necessary.

Get A Free ConsultationIf you would like to discuss estate planning, including probate alternatives and drafting a will, contact Adair M. Buckner for a free initial consultation.

Article Topics:
Probate Legal Tips