How Can Estate Planning Help Avoid Probate Court in Texas?

After you pass away, it’s important that everything you’ve worked all your life for go to the people you love or the causes you cherish. That’s what estate planning is for: it’s to make sure that your estate is distributed according to your wishes. But estates have to go through something called probate before the assets in them can be distributed, and probate can be a very long and expensive process. While your estate is suspended in probate, the assets are of no use to your loved ones, and creditors or lawsuits can greatly diminish the value of your estate. It’s always wise to keep as much as possible of your estate out of probate court, and an estate planning attorney in Houston, TX can help you set up your estate so this happens.

How Can an Estate Planning Attorney in Houston, TX Help Me Avoid Probate Court?

The most important way to avoid probate is to work with an attorney right from the beginning. An attorney has experience with all the laws involved and will be able to help you figure out the best way to protect each of your assets. Every estate requires a strategy that is specific to that estate and its needs; there’s no one-size-fits-all play, here. But the following are a few of the more common ways to protect your assets.

Establish Trusts

Trust are one of the most common ways of keeping assets out of probate court because any assets that you put into a trust become the property of that trust rather than part of your estate. A revocable living trust allows you to retain control over those assets as long as you’re alive, and once you pass away, a successor trustee takes over automatically to distribute them according to your wishes, without any need for the assets to go through court.

However, bear in mind that a revocable trust – because you retain control and can change things however you like during your lifetime – is still vulnerable to creditors and lawsuits after your death. In other words, if someone were to bring a claim against your estate for unpaid debt and the remaining assets in the estate could not cover that debt, then trust assets could be taken for this reason.

Irrevocable trusts can’t be changed once they’ve been established, so it’s important to be very sure before you set up a trust of this nature. However, irrevocable trusts offer more protection against creditors and lawsuits. Always talk to your lawyer about the best way to set up a trust and which trust will be most useful for the various types of assets you may have. With any type of trust, you can at least avoid probate court, however, and can also ensure greater privacy for your family after your death. Anything that goes through probate court becomes a matter of public record.

Designate Financial Accounts

Many types of financial accounts can be set up to allow you to name a beneficiary. Once you pass away, all assets in that account will automatically go to your beneficiary without any need to go through probate. These can include your 401(k), IRA, annuities, payable-on-death (POD) bank accounts, and more. Life insurance benefits can also typically be paid out directly to a beneficiary without any need for probate court.

File Transfer-on-Death (TOD) Deeds

Here in Texas, a property owner can transfer real estate to someone else with a TOD deed. This means that the beneficiary immediately inherits the property, and it does not go through probate. Once you set up a TOD deed, you keep ownership of the property and complete control over it as long as you’re alive, but once you pass away, your beneficiary doesn’t have to jump through any hoops to take over. You must actually file a specific TOD deed with the county clerk in the county where the property is located for this to be valid, however, so talk to your lawyer about making sure it’s done right.

Set Up Joint Ownership with Right of Survivorship

In some cases, you may wish for a spouse or possibly a child to have ownership of something along with you. You can set up joint ownership with right of survivorship for bank accounts, real estate, vehicles, and more. This is one of the simplest ways to keep things out of probate, but it is also important to remember that you need some trust to set this up. Once you set this up, the other person is a full owner, meaning that they can use that asset as the owner of it at any time, even before you pass away. This is not always the best situation for everyone.

Max Out Gifts

The IRS allows you to gift a certain amount to a person every year, tax-free. For 2025, the limit is $19,000 per year. Anything more than $19,000 and you will trigger federal gift taxes, but so long as you stay under that limit, you can reduce the value of your estate by transferring assets out of it and directly gifting them to your loved ones. The main concern here is that you don’t want to accidentally give away so much that your own financial security is in danger.

But if you have a particularly large estate, or if you are coming close to the end of your life and just want to make things simple, you can start, for example, gifting each of your children up to $19,000 each year to lower the value of your estate. Bear in mind that if you are married, you and your spouse can each gift $19,000 to each of the children that you share. This could potentially lower the value of your estate by an enormous amount in just a couple of years and make the estate eligible for the Small Estate Process.

FAQ

What Is the Small Estate Process?

If your total estate is valued at $75,000 or less, excluding certain property that you can exempt automatically, you can use this simplified process. This is a good way to avoid formal probate, but it’s not the same thing as actual estate planning. It’s only a good option if you have a very simple and straightforward estate.

What Happens to Debts in Probate?

That must still be paid, even if assets have avoided probate. Make sure that your estate planning strategy takes your debts into account. Many people like to set up a large life insurance payout specifically to cover any debts they may incur towards the end of their life. However, there are many options, and the lawyer can tell you more.

How Long Does Probate Take?

It’s impossible to say how long a probate might take in your specific situation. The process typically takes between two months and two years, depending entirely on the size of the estate, how complex it is, and whether there are any confounding circumstances, such as someone bringing a challenge to the will. The best way to keep things moving smoothly as to set it all up with an attorney in advance.

For help with your estate, contact us now at Hensley & Krueger, PLLC in Houston, TX to avoid probate.