Stack of Probate Law BooksIn our last post, we discussed the several traps that can ruin the plans for your estate and lead to unintended consequences. This post reaches the conclusion of our series and aims to provide some key takeaways to remember when considering whether to plan, finalize, or redeem your interest in Texas non-probate transfers.

To recap, this series addressed the following topics:

  1. Overview—Non-probate Property Transfers May Avoid Texas Probate Court
  2. Transferring Bank, Retirement, and Investment Accounts Automatically Upon Death in Texas
  3. Distributing Other Texas Property Without Going to Probate Court
  4. Conflicts and Claims that Challenge Texas Non-probate Transfers
  5. Non-probate Transfer Traps that May Ruin Your Plans

This series addressed the purpose of non-probate transfers, the assets subject to non-probate transfers, and the snags that can disrupt your intended goals. Now, we will underscore some of the most significant points to consider when planning Texas non-probate transfers or claiming the assets subject to them.

Texas Non-probate Transfers Can Save Time and Money. The probate process can last for years and result in burdensome legal fees. Non-probate transfers can help preserve your estate, insulate it from expense, and maximize the inheritance your heirs or beneficiaries will receive.

Rely on POD, TOD, and JTWROS Accounts, But Beware of Simple Multiparty Accounts. Accounts with proper POD and TOD designations transfer upon death without need of a probate proceeding. Similarly, JTWROS accounts transfer automatically upon death to the surviving co-owner. Simple joint accounts (also called multiparty accounts), however, are not proper non-probate transfers. The deceased co-owner’s share of the account must be identified and then passed through probate.

Consider Other Estate Planning Tools—You May Avoid Probate Entirely. Other estate planning mechanisms can help you avoid a formal probate proceeding. TOD deeds and lady bird deeds will help you transfer real property in a similar way to POD and TOD account designations. Trusts give the property owner wide latitude to distribute many types of assets. And life insurance policies can provide additional non-probate benefits to your loved ones. With enough planning, you may be able to combine these methods to eliminate the expense and time cost of a formal probate proceeding.

Some Non-probate Transfers Are Improper, Illegal, and Subject to Invalidation. You have options if your loved one was taken advantage of, forced into signing a beneficiary designation, or lacked mental capacity at the time the non-probate transfer was set up. An experienced probate attorney can help assert your rights to claim the wrongfully transferred property. But it’s critical to contact an attorney quickly, because these assets may be sold, depleted, or transferred elsewhere by the time you file a claim.

Community Property Claims Can Disrupt Your Non-probate Transfer Plans. Texas is a community property state. Upon one spouse’s death, the surviving spouse can only transfer their half of the community property. For example, if an account with community funds has a POD designation, the recipient is only entitled to receive half of those funds. The bank, however, likely won’t know any better and will distribute the funds entirely unless the surviving spouse presents a community property claim to the bank.

We hope this series helped you understand the purpose and mechanisms of non-probate transfers in Texas. If you have questions or concerns about making, claiming, or challenging a non-probate transfer, please contact us. We regularly help property owners and their beneficiaries with the pursuit and opposition of non-probate transfers throughout Texas, including in Dallas, Harris, Travis, Bexar, Denton, Collin, Ellis, Montgomery, Midland, and El Paso Counties.