Tag: Probate Court

Dealing with Non-Probate Assets| Houston Probate Lawyer

As a Houston probate lawyer, I am often asked if every asset a person owns will have to go through the probate process when they die. The short answer is that it depends.

While most real estate owned by a person does go through the Harris County probate court following the loss of a loved one, a few asset classes are exempt. They are referred to as non-probate assets.

Instead of being distributed through a will, non-probate assets are automatically transferred to the survivors/beneficiaries, outside of probate. The assets are transferred at the death of the testator regardless of any instructions in the will. As an example, if a husband and wife own a piece of property together, the property is automatically transferred to the surviving partner. There is no distribution of property needed.

There are other assets besides jointly owned assets that are distributed outside of probate. Any assets with a named beneficiary typically avoid probate. Life insurance is one such example where payouts go directly to the beneficiary. In addition, retirement money is a non-probate asset. Life estate and inter vivos trust also are considered non-probate assets.  Here is a brief list of the most common assets that are passed outside of Harris County probate for your reference:

  • Assets held in joint tenancy with rights of survivorship
  • Retirement accounts such as IRAs or 401(k)s that have a beneficiary named
  • Life insurance proceeds that do not have the estate named as a beneficiary
  • Assets held in a living trust
  • Money in a payable-on-death bank account (POD)
  • Securities, bonds, real estate, or other assets with a transfer-on-death provision
  • Pension plan distributions

Remember, non-probate assets are distributed immediately. Simply contacting the bank or company where the asset is located and presenting the death certificate is usually enough to get the ball rolling to distribute the funds. On the flip side, the probate process can take a year or more to get to the point where assets can be distributed to a beneficiary.

The good news is that there are ways to structure your assets so that none of them have to go through probate—even if the assets you are leaving to your loved ones fall outside of this list.  An attorney can help you utilize legal tools and planning to minimize your exposure to probate, or avoid it all together. But, only an experienced estate planning attorney can help you set up your assets to ensure that outcome.

If you would like to speak to a probate lawyer today to set up an estate plan to best protect your assets and minimize the impact of probate court, call our office at (281) 218-088 to set up a consultation.

 

Harris County Probate vs. Non-Probate Property – Know the Difference

Many people think that as long as your will clearly defines how you would like to transfer your property at your death, it will be an easier, straight forward process. However, this is not always the case.  Especially when it comes to probate in Harris County. There are many different rules that can impact how assets are transferred in a way that maybe you had not intended.

Probate is the legal process of overseeing the transfer of property of an individual that passes away without a living trust.  During the creation of your will, you will name an executor to oversee the process of carrying out your final wishes and the transfer of your assets that are in your name.

But, does everything you own have to go through this probate process—which is public, easy to contest and can take a long time?  It depends.  Property can become non-probate property depending on whose name is listed as the owner. Property will be considered non-probate property if:

  • There is a joint owner with right of survivorship
  • A beneficiary is already designated on a life insurance or a retirement account
  • Property is owned by a trust with named beneficiaries

In these cases, joint owners and beneficiaries displace the request of the will. At the time of death the property will pass automatically to the joint owner or beneficiary without the approval of the probate court.

The bottom line is that your will is not necessarily the final authority on where your property and assets will go at the time of your death. Knowing the difference between which assets are subject to probate and which are not can save your family a lot of heart ache. If you want to be certain that your family gets the money and property that you want to leave to them, call our office at (281) 218-0880 to schedule a consultation.

Celebrity Estate Panning Leaves a Lot to Be Desired

One would think that big stars like Prince would have a team of high-powered advisors, compared to the average Joe and Jane. But that isn’t so, says CNBC in the recent article “Don’t make these celebrities’ estate-planning blunders.” 11-08-16

Celebrities make the same mistakes. Here are a few:

Mistake #1: No Will. Nearly two-thirds of Americans don’t have a will. This has included the likes of Abraham Lincoln, Prince, Sonny Bono, Jimi Hendrix and Pablo Picasso. Dying without a will can mean numerous potentially disastrous consequences, like your assets not being distributed to those you intended or family in-fighting. The state intestacy laws apply and they are rigid regarding who gets what share of the estate. And without specific instructions from the deceased, an estate may be fought over in court by family members who think they deserve their fair share.

Mistake #2: No Current Will. Signing a will is just the beginning: you need to regularly update your estate planning documents and beneficiaries when your financial and personal situation changes. Look at singer Barry White. He was separated but not divorced from his second wife at the time of his death. As a result, his wife got everything. White’s live-in girlfriend of several years got zero.

Mistake #3: No Tax Plan. Even if you’re not ultra-rich and your wealth is well below the federal estate tax threshold of $5.45 million per person this year, there may be state estate taxes. Poor planning could force your heirs to sell valuable or sentimental items because there are insufficient liquid assets to pay the tax. Joe Robbie’s family sold its stake in the Miami Dolphins and Joe Robbie Stadium to pay estate taxes.

Mistake #4: No Reference to Personal Property. Comedian Robin Williams’s family has battled over his film memorabilia. And Martin Luther King Jr.’s kids fought over his Bible and Nobel medal. People forget about personal property in their estate planning, which can trigger lots of fights over who gets family heirlooms, collectibles and Dad’s Barry Manilow record collection. Be specific with descriptions.

Reference: CNBC (Sept. 17, 2016) “Don’t make these celebrities’ estate-planning blunders”

Make a Charitable Donation in Your Will and Watch It Work

The estate planning laws in many states are pretty straightforward for those who want to donate all or part of their estate to charity.

“You can leave an unlimited amount to a charity,” says fosters.com’s article “Giving to charity an option in estate planning.” 10-17-16

There are many reasons why individuals may elect to will or otherwise donate to a charity at their death. For example, they may not have a close family to inherit the assets in their estate, or they may be committed to an organization.

What’s important to you? That is a question an experienced estate planning attorney will ask if you’re considering donating to a charity. You can leave a specific dollar figure, a percentage of the value of the estate or the whole thing.

The assets the charitable organization is able to receive from an estate will vary. For instance, checking or savings account funds, as well as stocks owned by the individual who wants to donate, will not require the charity to pay taxes—provided it’s a registered non-profit. But it’s a different story for tangible assets. Furniture and personal items must go through the probate process.

You need to do some advance planning now to prepare for an after-death charitable donation. In our example of money in a bank account, forms must be completed at the bank to designate the charity as the recipient of the assets upon your death. Shares of stock can be transferred to the charity by arranging it with the broker or by doing so in a will or trust. The charity would receive the increase in value of the stock. The transfer of shares means that the charity will get the value but will not have to pay taxes on the gains.

You can also direct the charity in how you want the gift used, such as for a new building or for a scholarship. Many non-profits would be happy to have your inheritance—like colleges and universities, religious organizations and animal shelters.

Nevertheless, an experienced estate planning attorney can help advise you regarding how the gift is best made, especially if something should happen with the charity that makes you change your mind about giving.

Reference: fosters.com (August 29, 2016) “Giving to charity an option in estate planning”