1. Have a small estate. Your loved ones can distribute your estate among themselves without having to go through court proceedings if you died without a Will and your assets are valued below $75,000 at the time of your death. Your dependents are required to sign an affidavit stating that they are entitled to your property. Upon presentation of this document and the deceased’s death certificate, institutions or persons holding the property will release it to the beneficiaries.
2. Give away your assets while alive. One way to make your assets be exempted from the probate procedure is to reduce its value by sharing it when you are alive. Giving your property away when alive can also help reduce federal and state taxes in the future.
3. Establish a living trust. Trusts are an excellent way to help avoid probate since property held in trust ceases to belong to you upon your death. This is because a trustee controls the trust property and they have to adhere to the terms of the trust agreement when distributing it.
4. Make your accounts payable on death. Your designated beneficiaries automatically inherit money in your bank and other accounts upon your death without the need for probate. When you operate a payable-on-death (POD) account, you reserve exclusive rights to it and you can change the beneficiary when alive.
5. Own property jointly. When you jointly own property with your spouse or someone else in Texas, the asset can be transferred to them upon your death without going through probate. Among the ways to jointly own property include tenancy by the entirety, joint tenancy with right of survivorship, and community property with right of survivorship.
Reasons to Avoid Probate
It can be slow. It can take months or years before a probate court finalizes your estate if the Will is contested. During this time, your beneficiaries do not have access to your accounts to pay for bills, taxes and property insurance, and your funeral costs.
Interference from the court. Court approval must be sought every step of the way during the probate process, including running your businesses and disposing of non-performing portfolios. Your family can suffer when dealing with a judge who meddles with such family financial issues.
It can be costly. Probate fees are one way through which courts obtain funding. Besides, you will have to factor in the charges of the attorney, executor, and appraisers, which are based on the percentage of the estate in Texas. These costs can reduce the value of property left to your beneficiaries.
It is public. Probate is a state legal proceeding. As such, all information about your beneficiaries, assets, liabilities, and personal representatives is in the public record. In Texas, these records can be accessed online, significantly increasing the accessibility of your financial and family information to the public.