When a loved one dies, they will either pass away with a will or without one. Whether or not they die with a will in place will determine how you and your family will proceed as a result. Depending on whether or not your loved one is married and what family members stand to inherit from them, it could be the case that there a state has to be probated in probate court. The probate process allows for an efficient distribution of property. Anne provides creditors with a chance to ensure that they have an opportunity to be paid out of the property contained in the estate.
In many cases, the probate process is necessary. However, there are situations where you and your family may not have to go through probate, or even that probate is not the best path for you all to go down. Depending upon your specific circumstances, I wanted to inform you of some alternative approaches that may be better.
A small estate affidavit applies if your loved one dies without a will and there is a state, not counting their home or other exempt property, is valued at less than $50,000. You would still need to file an affidavit related to their small estate in probate court in the County where they have resided before their passing. Contained in the affidavit would need to be identified any heirs of your loved ones a state. The affidavit would need to be signed and witnessed by two people that do not stand to inherit from your loved one. These would be objective persons who can verify that the family history contained in the affidavit is correct.
The affidavit would also have to be sworn to by all persons who have the ability to have property distributed to them in our imposition. Any child or incapacitated person would have to have a Guardian or conservator sign on their behalf, as well. The probate court could then approved the small estate affidavit, and any person under the estate could be distributed their property upon approval of the court. Keep in mind that any person who receives assets under a small estate affidavit would be liable to any creditors or anyone else having a prior right to the property.
The ability to utilize a small state after David is beneficial, especially in situations where your loved one died with very few assets. Bank accounts, savings accounts of other sorts, a home, and a vehicle are examples of the sort of property I would envision going through a small estate affidavit. Utilizing a small estate affidavit does not legally transfer title to any real property owned by your loved one who is the past period the exception to this rule would be your loved one's home.
If your loved one owned real property other than their home, then a determination of heirship hearing would be necessary. Other states besides Texas do not use small estate affidavits, as far as I know. As a result, if you are awarded property such as investment accounts, retirement funds, or anything else for that matter that is a part of the small estate affidavit, you will need to describe what a small estate affidavit is and be prepared to show paperwork to anyone who requests additional information.
What is a muniment of the title?
Another route you could choose to take if probate does not work for your family is called a muniment of title. A muniment of title is relevant if your loved one had a will but did not have any creditors whose loan was not secured by real property belonging to the estate. In this case, No administration of your loved ones; a state needs to occur. In that case, the world could be probated as a muniment of title.
A minimum of title differs from the probate process regarding whether an executor will have to be appointed. The Will determines who owns state assets. The probate court will approve the will as an amendment of title if whoever presents the will can show that the state has no unpaid debts other than debts secured by liens on real estate and that there is no need for administration because there are no creditors.
As soon as the court enters an order that admits the will into probate as a muniment of title, then your loved ones' estate beneficiaries can move forward and begin to transfer their assets into each person's name with legal authority to do so.
Affidavit of heirship
An affidavit of heirship is used when a person dies without a will, and their estate is made up of mostly real property title in their name. An affidavit of airship transfers title from your loved one's name into the names of any air without having to go through probate. An affidavit of heirship would be filed and recorded with deed records in the County where your loved one and their real property are located; the affidavit of heirship creates a clean chain of title that transfers property from one person to another. This is critical for in the future when the property would be sold, for example.
Having a judge declare who an air of your loved one is
If your loved one dies without a will, then the most common state settlement process is a judicial declaration. This will be used to identify the heirs of your loved one. In this process, the court would make a formal declaration that they'd become an entity of any of your loved ones' heirs and the percentage each heir would own in the estate. The whole point of this process is to allow your loved one's property to be divided and split up between their heirs. There is no appeal of this declaration process, and the decisions made therein are final.
The process of a judicial declaration of heirship avoids the probate courts. Still, it is also possible to use this process as a part of a dependent administration in probate court. A judicial declaration of heirship can also be used when your loved one dies with a will but does not list all of their state assets in the will itself. In this case, your loved one who is past technically died partially with the will and partially without one. The airship proceeding would be able to determine who else stands to inherit property from your loved one regarding the property not mentioned in the will.
Another important use of a judicial declaration of heirship occurs when more than four years have elapsed since your loved one passed away. Even if your loved one had a will, if the person attempting to probate the will does not do so within four years of your loved one's death, then an heirship proceeding may be required by the court if it decides not to enter the will as a muniment of title.
As a result, I need to point out that a judicial declaration of heirship can take a relatively long period and cost even more money than the probate process. An attorney adds Litem will be appointed by the court to represent any unknown errors to the court or the applicant. This attorney will report their findings after performing due diligence to the court at determining heirship hearing. Persons who do not stand to be beneficiaries under any court orders would need to testify to the family history of their loved ones.
What is a revocable living trust?
As an alternative to probate, over vocable living trust requires a great deal of planning before the death of your loved one. For that reason alone, it is not commonly utilized. The revocable living trust is a trust agreement between a person who manages the trust property, known as a trustee, and the settlor, who has created the trust agreement. Because trust is created during the life of your loved one, the living trust is a two-part plan. The first part of the plan directs how their assets should be distributed and handled during their lifetime. The second part of the plan directs how the property should be disposed of at their death. Keep in mind that rest must be in effect at the time of your loved one's death to be determined valid by a court.
An important factor to keep in mind is that a living trust may allow for the avoidance of having to go through probate, but it is not a guarantee. Most commonly, probate can be avoided if your loved one's assets are all included in the trust. A revocable living trust is not often utilized as an alternative to probate because most people will not transfer all of their assets to the trust. Any assets located outside the trust may still be subject to probate. Your loved one will have had to have changed the title to all the property in their name and transferred it into the name of the living trust for the revocable trust to be effective.
If your loved one failed to do this, then any property that has not been transferred would be subject to probate and could be subject to an estate plan different from the one outlined in the revocable living trust. Another factor to be aware of is that the living trust is just like a will in that it is subject to being contested by any of your loved ones' heirs. The basis for a contest in this area could be if an argument is presented that your loved one lacks mental capacity, suffers from undue influence or fraud.
I have heard that some people are interested in creating living trusts would be to reduce taxes. The reality of the situation is that a revocable living trust does not reduce your loved ones' taxes or any estate taxes. This is because living trust is revocable and can be changed during your loved ones' lifetime. As a result, all of the income realized under the trust is recognized and reported on your loved ones' tax returns. This is occurring during your loved one's life. At the time of their death, the assets in the trust are still subject to a federal estate tax. If you have questions about wills, living trusts in tax implications, then you should contact one of the experienced probate and estate planning attorneys with the Law Office of Bryan Fagan. Specific tax questions can be addressed to your tax preparer or tax professional.
Finally, you need to consider that any asset put into a living trust is not exempt from creditors accessing them in satisfaction of a debt. The law in Texas does not allow for your loved one to transfer assets into or revocable living trust to protect the property from any creditor's claims. Sheltering nonexempt property inside a trust will not prevent any creditors from accessing that property to satisfy loans or debts owed.
Closing thoughts on how to approach the state planning and probate in Texas
As you can see, there are many options available for Texas residents to take advantage of when it comes to planning for their estate needs upon their passing. The best planning information that I can probably provide you with is to consider the size of your loved one's estate and whether or not they have a valid Will. Depending on the circumstances of their passing, you may not have been able to discuss any of this with them before their passing.
That means they hopefully shared information with you about their estate at some point during their life. It is always recommended that any person over the age of 18 have a will. Contrary to popular belief, a Will is not expensive to draft, does not take a lot of time to draft, and can do a lot to increase the peace for a family after a loved one passes away. You will want to be able to grieve the death of your loved one and remember them for something other than a contentious fight between potential heirs. Drafting a Will allows your loved one to be mourned and for peace of mind to reign supreme for your family.
On the other hand, if thinking about the passing away of your loved one has caused you to have questions about how your estate is set up, then that is a good thing. You can use the experience of having a loved one pass away as a motivator for you to solidify your estate plan and have a Will drafted. It does not matter if you are wealthy, deep in debt, or somewhere in between. As you have already seen from today's blog post, there are many reasons to have your affairs in order when you pass away. Your failure to do so could result in your loved ones going through a lot of trouble organizing your affairs after you pass on.
How can you start this process? I would tell you that the first step would be to consult with multiple estate planning and probate attorneys. Any attorney who can offer you a free-of-charge consultation would be a good starting point for you and your family. For most of us, a simple will should suffice in terms of planning for your death. Naming beneficiaries for your estate, providing for minor children, and generally increasing the peace of your household is never a bad thing.
Finally, you can go over all of these options once you have selected an attorney to assist you with the estate planning process. As the old saying goes: an ounce of prevention is worth a pound of cure. This means that if you plan and avoid mistakes that could occur in your life or that of a loved one at the time of their passing by not having a will, you can increase your Peace of Mind during your life and the Peace of Mind for your loved ones at the time of your passing. Once you have a well-drafted, you should periodically update the will as life events dictate, such as the birth or death of persons who are beneficiaries under your wills, such as a spouse or children.
Questions about the material contained in today's blog post? Contact the Law Office of Bryan Fagan
If you have any questions about the material contained in today's blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed estate planning attorneys offer free-of-charge consultations six days a week in person, over the phone, and via video. These consultations can be a great way to learn more about the estate planning and probate process and determine how filing a will may impact your family circumstances for probate or any other estate-related matter.