Estate Planning

What is Estate Planning?

Estate Planning is the process by which a person determines how the property that he or she owns on Death is distributed. There are two ways to do Estate Planning. The first way is to have properly a drawn will specify how your property will be distributed. The second way is to not have a will and let the State of Texas decide how your property will be distributed through the laws of descent and distribution. This means that the laws of descent and distribution in effect at the time of your death will determine how your estate is distributed.

What is a Will?

A properly drawn will is a document that tells the Probate Court how your Estate should be distributed. For a will to be effective it must be filed for Probate with the appropriate Court. A will that is not filed for Probate has no effect.

What happens when a will is filed for Probate?

The Court will schedule a hearing to admit the will to Probate. A properly drawn will names an Executor. After the hearing the Court will sign an order admitting the will to Probate and appoints the person named in the will as the Executor. The Executor executes an oath and receives Letters of Administration which authorize the Executor to conduct the business of the Estate. The Executor is charged with the responsibility of paying debts of the estate out of the estate assets and distributing the remaining assets to the persons named in the will.

What happens if there is no will?

The Court determines who the heirs of the estate are. The Court will conduct a Determination of Heirship proceeding which will require the appointment of an Attorney ad Litem. Among the duties of the Attorney ad Litem is determining which heirs, if any, that are not already a part of the proceeding should be added. The Attorney ad Litem is paid by the estate and adds significant cost to the probate process.

Are there assets that can pass outside the Probate process?

Bank Accounts that have designated beneficiaries and life insurance policies will pass outside the probate process. However, if the designated beneficiary of the bank account or life insurance policy is deceased and there is no secondary beneficiary, then the proceeds become part of the Estate.

Will every estate have to be probated?

Yes, although it’s not a legal requirement. Legal title to most property cannot be transferred without a probate proceeding. This means that title to the deceased’s house and car will not transfer without a court order. Further, legal title to household goods such as furniture and moveable appliances typically doesn’t transfer without a court order. Sales of the decedent’s property without legal title are void. Most importantly no one has the authority to sell property from the estate to pay valid debts unless the estate is probated. If there are assets that have to be transferred or sold, then there will have to be a probate proceeding.

What will a will cost?

The cost of drafting a will is almost always less than the cost of probating an Estate without a will. Additionally, having a will gets the assets of the estate delivered to the beneficiaries quicker.