When you are trying to account for the future, you might look into estate planning as a way to bequeath your possessions via your will. After all, you want to provide for your family and loved ones even when you are no longer around to support them.
One aspect of estate planning that is easily overlooked is the process of probate, which can put an undue burden on your loved ones after you have passed, subjecting them to a stressful and oftentimes uncertain legal process in the midst of their grieving.
Some people think that leaving a will behind is enough to avoid probate, but this is simply not the case. In fact, you will need to be more thorough with your estate plan if you intend to protect your family from the stress of this legal process.
In order to save families future hassle, heartache, and even expenses, the estate planning mastermind behind The Law Offices of Michelle E. Murphy has helped many clients arrange their assets so that they can avoid the pressures of probate after you are gone.
We have created this blog to outline some of the options that are available to you as you arrange your estate plan. Read on to find out some of the strategies you can discuss with your estate planning lawyer in order to save your family from avoidable legal headaches.
What Is Probate And Why Avoid It?
Probate is the legal process by which the assets of the deceased are itemized by the court and distributed to beneficiaries via the instructions left behind in the will or, in the absence of the will, according to the formula by the state of Texas. As a legal process, probate can be stressful, it can take a long time, and it can be costly, which is why it’s in your family’s best interest to avoid it as much as possible, especially in a time of grief. Probate, especially in the absence of a will, can also cause strife within families if there is no agreement on how assets should be distributed.
Luckily, there are strategies you can build into your estate plan that will allow your assets to bypass probate so that your family will be spared time and expense and your wishes will be respected and carried out. Three of these options are outlined below.
Establish Trusts
Trusts are a great tool for estate planning for many reasons. Most prominently, any assets that are protected by trusts do not have to go through probate. Trusts are also great for protecting the interests of your family as they shield your assets from creditors, so they cannot be claimed if you pass away with unpaid debt.
Trusts are legal entities to which you transfer ownership of your property to be dispensed to your beneficiary at a designated time, whether that’s after your death, after the completion of a certain milestone, or as a month-to-month stipend. The one downside to a trust is that you are no longer the owner of any assets that are held by the trust, so think carefully about what you want your trusts to secure and when.
There are many types of trusts out there and all of them have different purposes. For instance, if you have someone in your life who will need lifelong medical assistance, you can set up a special needs trust so your loved one can have access to the support they need without risking their state-sponsored health benefits.
Revocable and irrevocable living trusts will hold your assets until after your death, at which point the assets will be distributed to the designated beneficiary. These trusts also have the benefit of not requiring your beneficiary to pay taxes on your assets!
Make Your Accounts Transfer-On-Death
In Texas, you can designate bank accounts, vehicles, and deeds as transferable on death (TOD), meaning that once you pass the funds or titles will transfer to the beneficiary automatically without being taxed or going through probate. Unfortunately, you cannot designate stocks and bonds as TOD in the state of Texas, so you will have to account for those separately.
Having your beneficiary named on these accounts does not give them access to the property or the funds contained in the accounts, it only allows them to possess these assets after your death. Unlike with trusts, TOD accounts are useful because you will be able to maintain ownership and control of the assets until your death.
Agree On Joint Ownership With Your Spouse
If you want to transfer your possessions to your spouse after you pass, you can consider establishing joint ownership. There are two ways in which you can make this happen.
1. Joint tenancy. By signing a joint tenancy agreement, you and your spouse agree that you share the designated assets equally. After one of you dies, the assets will automatically transfer to the surviving spouse. You can designate most of your assets for joint tenancy, including bank accounts and the home that you own together.
2. Survivorship. Unlike joint tenancy, each spouse does not have to have an equal ownership of the property in order to qualify for survivorship. However, by entering into this agreement, the designated assets will automatically transfer to sole ownership by the surviving spouse when one dies without having to go through probate.
The Law Office Of Michelle E. Murphy Can Help You Avoid Probate
Attornehy Michelle E. Murphy has been practicing estate planning law for over 20 years and can help you construct a comprehensive estate plan that includes strategies for avoiding probate. Michelle prides herself on providing highly personalized care for each of her clients so that you can meet each of your estate planning goals and move forward with the peace of mind that the ones you love are protected. In the interest of serving each of her clients with care and empathy, she provides virtual meetings for those with limited mobility. Reach out to schedule a free initial consultation and learn how The Law Office of Michelle E. Murphy can make a difference in securing your future.