In Texas, probate is the process of settling a deceased person's estate, including validating their will, paying any debts, and distributing assets to beneficiaries. It is overseen by the court, assuring that everything is done according to the law and the deceased person's wishes. Although probate is required in some situations, it may not be in others. How do you know when probate is not required and when it is? Here is a brief list of questions that may determine whether you will need to go to probate court.
Is there a will? Having a will does not negate the need for probate. Probate is required in order to validate the will. It also allows the court to name an executor and give them legal authority to manage and distribute the estate. If there is no will, the state must proceed under intestacy laws. In this situation, the court is responsible for attempting to locate legal heirs. Once heirship has been determined, the court may appoint an administrator to distribute the property. However, it must approve all distribution plans before any action takes place.
Does real estate go through probate? - Owned real estate, such as a home or investment property, must go through probate before any titles can be transferred, especially if the property was held solely in the deceased person's name. However, some real estate may pass outside of probate if:
- a Transfer on Death Deed (TODD) or Lady Bird Deed was recorded before death, or
- the property was placed in a revocable trust
Do bank accounts go through probate? - Bank accounts include savings accounts, checking accounts, money market accounts, and certificates of deposit. Accounts held solely in the deceased person's name without a payable-on-death (POD) beneficiary listed are subject to probate. In this case, the money becomes part of the estate and cannot be accessed by heirs without court authorization.
What about joint accounts? - In a joint ownership account, property is owned by multiple people. This means if one owner dies, their interest in the property will pass automatically to the remaining owners. Because of this, joint accounts do not go through probate.
Do vehicles go through probate? In Texas, vehicles may be subject to probate, especially if they are solely owned by the deceased and do not have a designated beneficiary. However, Texas does allow alternate transfer options to help bypass probate, such as the Affidavit of Heirship for Motor Vehicles (found on the Texas Department of Motor Vehicles website), which allows the spouse or close family member to claim the vehicle. If the vehicle is part of a larger estate or if ownership is disputed, probate may still be required.
Will life insurance policies go through probate? If you designate one or more beneficiaries, your life insurance proceeds pass automatically outside of probate. However, if no beneficiary is named, if the beneficiary dies before the holder of the policy, or if they refuse the payout, then the insurance proceeds may become the property of the probate estate.
What about small estates? Instead of going through full probate proceedings, some heirs may use the Small Estate Affidavit, or SEA. To qualify, the deceased had to have left no valid will. Other qualifications include:
- The total value of the estate, excluding homestead, is $75,000 or less.
- The deceased owned no real property, other than the homestead.
- The deceased either owed no debts or no major debts.
- No other probate proceedings are pending.
If heirs are verified and they agree on the distribution of the estate, they may fill out an affidavit and have it approved in court. They may then use the affidavit to transfer the assets and close the estate.
Is business ownership considered part of probate proceedings? If the deceased person was the sole proprietor, partner, or member of an LLC, probate may be necessary to legally transfer ownership interests. If it is a family business, it is part of the deceased person's estate, unless dealt with before their death. The court might need to oversee such issues as how the company handles the transfer of ownership, settles debts, and addresses disputes.
What if the deceased owned property in other states? If the deceased owned property in other states as well as Texas, an ancillary probate may be necessary. An ancillary probate is a secondary court-supervised process meant to ensure that out-of-state assets are legally transferred to heirs or beneficiaries. Texas courts cannot approve the distribution of out-of-state assets, because distribution laws vary from state to state.
What about online accounts and digital property? - A digital account is any electronic record, account, or form of property that exists online or is stored digitally. These assets can hold financial or legal significance and may include:
- cryptocurrency
- online investments and bank accounts
- cloud storage
If they have monetary value and no transfer mechanism, they may become part of the probate estate. Unlike physical assets, many digital assets are governed by contractual agreements with service providers, which means access is not automatically granted to heirs after death. Estate planning is essential when digital property is involved. It is a good idea to consider naming a digital executor along with the estate executor, someone who has a list of the deceased person's passwords and online contact information.
Do revocable trusts go through probate? - In a revocable trust, the deceased person names a trustee to manage assets for the beneficiary. Assets held in a trust do not have to go through probate, allowing for a faster and more private transfer to loved ones.
Do I need an attorney for probate in Texas? - In most cases, you must have an attorney to represent an estate in a formal probate proceeding. The executor cannot represent the estate alone because they have a fiduciary duty to act in the interests of the heirs or beneficiaries. They would be acting on behalf of others in court, which is considered practicing law in Texas. Doing this without an attorney is unauthorized. Also, having an attorney ensures all legal filings and court appearances are done correctly. In cases where the estate is small and there is little to no substantial debt, an attorney may not be necessary, but it would be wise to consult an attorney to be sure your estate falls in this category.
It's important to remember that each estate is unique, and the need for probate depends heavily on the types of assets involved, how they are titled, and the extent of estate planning. Consulting an attorney can help you understand where your case may differ from others. We would be happy to help with any questions you may have. Contact us at 254-221-8588 for an appointment.