Probate Avoidance Strategies

Families engage in the estate planning process for many reasons. However, one of the primary goals of estate planning is to preserve assets, either to pass them on to future generations or to donate them to charitable causes. At the Houston estate planning law firm of McCulloch & Miller, PLLC, our dedicated attorneys have decades of experience helping clients understand and implement the various probate avoidance strategies. With our help, you can ensure that your hard-earned assets are promptly transferred to the intended recipients.

Assets in an estate eventually pass on to those listed as beneficiaries listed in a last will and testament. However, before the executor distributes any estate assets, the will must go probate. Probate is a public, legal process in which a court validates a person’s will and ultimately approves the executor’s ability to distribute the assets under the terms of the will.

Unfortunately, the probate process often results in avoidable expense and delay. For example, the court must formally appoint an executor, who is responsible for settling all of the deceased’s debts before any estate assets are distributed. While the length of probate proceedings varies, they can take months, and in some cases, even longer. This can result in beneficiaries and heirs experiencing a significant delay in receiving any assets left to them in the will. Probate can also deplete estate assets.

While assets in an estate are subject to probate, there are steps to take that can reduce the assets that must go through probate:

Assets owned by more than one person are not required to go through probate. Instead, the asset will automatically transfer to the joint owner. This can apply to both financial accounts as well as real estate. Retitling assets is one of the easiest ways to avoid probate. However, there are risks with this approach. For example, the assets may be subject to claims against the joint account holder. You may also inadvertently disqualify you or the joint owner of future public benefits. Talk to an estate planning attorney before retitling any assets.

For certain types of accounts, such as IRAs, 401Ks, and other bank and brokerage accounts, account holders can list a beneficiary who will receive the assets upon the accountholder’s death. Doing so removes these assets from the probate process. It is important to keep in mind, however, that if the terms of a will contradict beneficiary designations, the beneficiary designation will control. Because of this, improper beneficiary designations might defeat the purpose and intent of your will.

A revocable living trust is created during the life of the grantor. The grantor will name a trustee who oversees the trust. Often, grantors name themselves as the trustee to maintain control of the assets during their life. In this situation, the grantor will also name a successor trustee to take over the role once they die. The successor trustee is responsible for distributing the assets to the beneficiaries. Revocable living trusts are an effective probate avoidance strategy in that they allow individuals to maintain control of trust assets during their lifetime but also remove trust assets from the probate requirement.

While there are many probate avoidance strategies, no single strategy works for every family. Often, the best approach involves utilizing multiple strategies to maximize the assets that are not subject to probate.

If you have not yet created an estate plan, or it has been years since you last updated your estate plan, reach out to McCulloch & Miller, PLLC, to learn more about the most current and effective probate avoidance strategies. Our dedicated Houston estate planning lawyers have decades of experience helping families preserve the value of their estate. We can help you preserve the value of your estate to maximize the assets available to your loved ones. To learn more, and to schedule a consultation, give McCulloch & Miller, PLLC, a call at (713) 333-8900. You can also connect with us by completing our online contact form.