probate (noun): the process of winding up the affairs of a person who has passed away. The concept of probate can be confusing to clients (and even attorneys). In simple terms, a probate is a lawsuit filed against yourself after you die – paid for with your own money – for the benefit of your creditors. PROBATE CAN BE MESSY AND EXPENSIVE. However, probate in Texas is easier to navigate than in most other states. Texas law is often referred to as being “probate friendly” because it allows for independent administration. What does that mean? The Texas Young Lawyers Association explains it this way: [A]fter an independent executor or administrator is approved and an inventory of estate assets or an affidavit in lieu of an inventory, is filed with the court, the executor or administrator can simply take care of the administration of the estate without any further court involvement or supervision. The independent executor or administrator is free to settle with creditors, set aside the homestead and other exempt property, manage the property of the estate, sell assets for payment of debts or taxes, and distribute the remaining estate to those entitled to it. Texas Young Lawyers Association, Texas Probate Passport (2014). However, to qualify for independent administration the will must either specifically allow it, or all of the estate heirs or beneficiaries named in the will must agree to allow it. And while the independent administration process is typically easier and less expensive than the alternative, the executor must still publish notice to potential creditors in a newspaper, and in certain instances file an inventory of assets and/or affidavits with the court. Probate can also be time-consuming. In Texas, the probate process commonly lasts between four and eight months. During this time, the decedent’s assets may not be fully accessible, which can be extremely inconvenient to family members desiring access. Throughout probate, the estate remains open so that claims can be made against the estate by creditors. Only after probate is completed can the estate be closed and assets be distributed. Another issue that frequently arises in probate proceedings is that some of the decedent’s assets cannot be located. IN TEXAS, APPROXIMATELY TWO BILLION (THAT’S BILLION WITH A “B”) DOLLARS IN UNCLAIMED PROPERTY IS HELD BY THE STATE! How did that money get there? When a person dies, their family if often unaware that they owned an insurance policy, real estate parcel or bank account, and when it’s not claimed after certain period of time it escheats (reverts) to the state. If you’re feeling lucky, you can search for unclaimed property that might belong to you by visiting the Texas Comptroller’s web site. Another clear downside to probate is that the process is public. Although most people draft their wills in secret and opt against broadcasting their decisions, few seem to realize that once probate begins, the will becomes a public record. Those wishing to keep the winding up of their affairs private should consider creating a living trust, which allows you to avoid probate altogether. Helpful Tip: Certain kinds of assets are not subject to probate, such as life insurance and retirement accounts that transfer from one person to another via beneficiary designations. Unfortunately, even these assets can be subject to probate under certain circumstances. For example, if you name a minor child as a primary or secondary beneficiary on your life insurance policy and then pass away, the assets may be probated because life insurance companies won’t directly pay insurance proceeds to minors. To make matters worse, the court often appoints a professional fiduciary (who charges by the hour) to manage the asset(s). The proceeds are held in a fund for the benefit of the minor until he/she turns eighteen, at which point he/she receives everything left outright, with no oversight and no direction. For most people, this scenario is less than ideal. While probate in Texas is substantially easier and less costly than in other states, it remains a complicated process with many pitfalls. We typically explain to clients that in most states probate is like a grizzly bear. In Texas, it is like a trained, circus grizzly bear that seems far less threatening – but under the right circumstances it can still bite your arm off, and those who ignore that fact do so at their own peril. To learn more about probate, visit the estate planning section of our web site. If you have questions about your particular situation you should contact an attorney.Continue Reading
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Most people don’t spend much time thinking about planning their estate. It’s complex, daunting, and quite boring. (Editors’ Note: We actually find estate planning incredibly fascinating! But we understand that’s not normal.) Here are some of the top excuses people make for not devising an effective estate plan… Estate planning is for wealthy people. This is a common misconception that we’ve discussed before. Estate planning is too expensive. Many people think they can’t afford to make a will when, in reality, they can’t afford not to. Estate planning is an important investment that can pay major dividends to your family and loved ones in the event of your death. Let us show you how affordable estate planning can be in the Cedar Park, Leander, Round Rock and Georgetown areas. Estate planning is complex and takes too much time and effort. In truth, drafting effective estate planning documents can be extraordinarily complex. But from a client’s perspective, the process is quick and painless because we do the heavy lifting. You make the decisions while we do the legwork. I don’t want to think about dying. Nobody does. But estate planning is for the living, not the dead. In the event of your death, what would happen to your children and/or pets? Will your loved ones be forced to spend countless hours in probate court? There are countless reasons to plan for the future. Estate planning is too invasive. I don’t want to reveal my private information. Trust is the hallmark of the client-lawyer relationship, and we are bound by law to keep your information confidential. We take your privacy seriously. Planning for the future is a wise decision, and can be surprisingly easy and inexpensive. If you’re looking for a rock-solid, affordable estate plan in the Cedar Park, Leander, Round Rock, or Georgetown area, contact us today.Continue Reading
A common misconception is that estate planning is only for wealthy people. In reality, there are a multitude of reasons for ordinary people have an effective will. Let’s consider a hypothetical example. Anna is a secretary who lives in Cedar Park and works in Leander, earning $40,000 per year. She is 29 years old, married, and has two daughters. Here are some reasons Anna should consider planning her estate: Anna’s estate may be small now, but could be quite large by the time she actually dies. Most of us begin with small estates that grow larger over time. Over the years, small pay increases, investment income, and sporadic windfalls begin to add up. If your estate is growing, even slowly, now may be the perfect time to prepare an estate plan. Furthermore, it is possible for the size of Anna’s estate to increase after her death if she dies in a manner that gives her estate a winnable survival action against a third party (a drunk driver, for example). Anna may want to nominate a guardian to care for her minor children. Estate planning is about more than just money. If you have minor children, who would control their personal and financial affairs in the event of your death? If, like most parents, Anna believes that she knows better than the court system who should care for her children, she needs a will. Under certain circumstances, Anna’s spouse’s right to deal with her property may be subject to the claims of children if she dies without a valid will. Interested in an affordable estate planning attorney in the Cedar Park, Leander, Round Rock or Georgetown area? Contact us today.Continue Reading