Articles Posted in Probate

Until you go through the probate process, you have no reason to know how the probate process works. At McCulloch & Miller, we are experts in probate so that you don’t have to be. One question our clients often ask is how long probate takes from beginning to end. The short answer: it depends. The longer answer is below.

Factors Affecting Possible Delays in Probate

Probate in Texas can take anywhere from three months to one year to complete. The amount of time depends on several factors. One such factor is the size of the estate; while not always true, it is common that larger estates take longer to go through probate. Another factor is the complexity of the estate: are there many different kinds of assets, or is the estate mostly made up of one account or one kind of account?

A third factor that can influence the length of probate is the potential for any disputes among beneficiaries. If beneficiaries fight about issues such as whether the descendent had legal capacity when writing the will, whether the will is legally valid, or how to interpret the will, the process could take longer. One way to avoid this kind of dispute is early and often communication with your loved ones. If you prepare your beneficiaries for what will happen when you die, making sure to help them understand how you came to your specific choices, they are less likely to have any disputes during the process.

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Muniment of title is a process that can simplify estate distribution for beneficiaries, but it is not always the right tool for a decedent’s estate. How exactly does muniment of title work? And how can you know if it is right for your estate? Today’s blog post addresses these questions and serves as a guidepost regarding this important tool.

Muniment of Title: The Basics

Muniment of title refers to a process through which a decedent’s estate can go through a simplified probate. It is available to estates with minimal to no debts, with real estate as the main asset, and with few other complicating factors. When an estate elects to use muniment of title, the court does not need to appoint an estate executor. All the court needs to proceed is a valid, legal will, and the court can then approve the transfer of the decedent’s property from the estate to the beneficiaries.

How Do I Know Whether Muniment of Title is for Me?

If your estate plan includes a valid will and is primarily made up of real estate, muniment of title might be right for you. Importantly, the only debt in your estate should be liens on the real estate itself. You should also ensure that there will be no conflict over who inherits the real estate in your will before electing to use muniment of title.

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One common goal in the estate planning process is crafting a plan that allows your beneficiaries to avoid probate. Probate can often be a long and drawn-out process, and many of our clients use various estate planning tools to avoid probate court altogether. One such tool, which we discuss on today’s blog, is the lady bird deed.

What Is the Lady Bird Deed?

The lady bird deed is a kind of deed that allows a homeowner to directly pass his property to a beneficiary upon his death. The name “lady bird deed” came from former president Lyndon Johnson’s wife, Lady Bird Johnson. President Johnson transferred his property directly to his wife upon his death, and the now common estate planning strategy ended up bearing her name.

With a lady bird deed, the homeowner formally names the beneficiary that will inherit the property. At the same time, though, as long as he is alive, the homeowner retains full control of the property. He can mortgage the property, sell it, lease it, or reside in it according to his own wishes. He is not required to consult the beneficiary for any major or minor decisions. Then, as soon as he dies, the property goes straight to the homeowner’s beneficiary without any probate court’s involvement.

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At McCulloch & Miller, we believe that every client’s estate plan should make things as easy as possible both for our client and for their loved ones. One tool that we often use to simplify estate planning is the payable-on-death designation or the transfer-on-death designation. These mechanisms are known for helping decedents’ beneficiaries access their loved ones’ assets quickly, efficiently, and privately.

Payable-on-Death v. Transfer-on-Death

Both the POD and the TOD are ways of titling assets, and they indicate that the asset should be transferred to the named beneficiary immediately upon the asset owner’s death. What is the difference between the two types of accounts? POD designations typically apply to bank accounts, and TOD designations typically apply to investment accounts. They both share the commonality that when the owner dies, the accounts go directly to the owner’s named beneficiary, bypassing probate. While the named beneficiary may have to provide a copy of the decedent’s death certificate, there is very little work that must be done to access the account, especially relative to the time-intensive probate process.

Key Benefits of the POD and TOD

The major benefit of these designations is that they allow the beneficiary to bypass probate altogether. This in turn saves time and money, and it allows the transfer to happen without anything going into the court’s public record. It also simplifies the process for everyone involved. As soon as the account owner names the beneficiary, he or she can trust that the assets will get into that person’s hands without that person having to face any major hurdles down the line.

If you think one of these kinds of accounts might be right for you, speak with a Houston estate planning attorney that you can trust. Not all assets can be titled using a POD or TOD, so you will have to strategize with your attorney in the context of your entire estate plan. With the right legal team by your side, you can make sure your plan fits your needs and goals so that you can protect your loved ones long after you are gone.

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If you are navigating the probate process, you have likely investigated the options for legal representation and probate legal services. When choosing an attorney, we recommend looking for someone with experience, positive reviews, and a client-centered approach to their practice. It is equally important, however, to make sure you find someone who is transparent about their fee structure.

Option 1: Flat Fee

A probate attorney could either charge a flat fee or a percentage of the estate’s value. Which one is better? Without a doubt, we believe the flat fee wins every time. When a probate attorney tells you that they charge a flat fee, you can know from the beginning of your work with that attorney the total cost you will end up paying. This fee does not change no matter the size of your estate or the amount of time it takes your attorney to settle the matter in probate court.

One word of caution on the flat fee is to always inquire as to what this fee does not include. For example, does the fee cover court costs? If not, what court costs will you incur? Might there be appraiser’s fees? Or are there any other possible bills you could be responsible for paying? Asking these questions up front can make sure you have full transparency about what you will owe at the end of the probate process.

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Do you own a small business? Have you accounted for that business in your estate plan? If you have, this is a good first step in protecting your business in the long-term future. After you die, your small business might be subject to the probate process. As part of the estate planning process, it is important to understand what probate entails so that you can adequately protect the business that you have worked so hard to build.

What are the Pitfalls of Probate?

Importantly, probate can take several months from start to end. Therefore, if you leave your small business to go through probate, the business will likely suffer. While the probate process is pending, the business’s assets will likely freeze. In addition, it can be unclear who is supposed to take the reins of the business during this transitional time, and this can in turn cause irreparable harm to the business itself.

How Does a Small Business Owner Avoid Probate Altogether?

It is best, then, to try and avoid probate altogether with your small business. There are several key strategies that can help you achieve this goal:

  • Write a business succession plan: by taking the time to lay out a plan for your business in the event of your death, you can ensure a smooth transition after you are gone. A successful business succession plan requires buy-in from the person taking over your business, and it requires details about what that persons’ responsibilities will be.
  • Create a living trust: you can use a living trust to ensure continuity after you are gone. The trust helps your business avoid probate altogether, while simultaneously protecting the business’s assets from outside creditors.
  • Enter into a buy-sell agreement: you can also draft an agreement that, once properly executed, becomes legally binding and ensures the transfer of the owner’s business interest in the case of the owner’s death.

These are just a few ways that you can make sure your small business avoids probate when you are gone. Because life is full of the unexpected, we cannot emphasize enough how important it is to develop a thorough plan for your small business in case something unanticipated were to happen. By taking these important steps now, you can make sure your business succeeds in the long run.

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If you are the executor in charge of overseeing the probate process for a loved one’s estate, there are certain duties you must keep in mind. One of these duties is sorting through the decedent’s debts. While these debts can certainly elongate the probate process, there are nonetheless important to navigate with care and attention. If you fail to pay an executor’s debts during probate, there could be serious consequences down the line, and it could also prolong the probate process even more than is already necessary. On today’s blog, we cover how to handle undisclosed debts during probate.

The Executor’s Responsibility

As executor, it is your responsibility to sort through the decedent’s assets and take account of what that person left behind. You should conduct a thorough review of bank account statements, properties, life insurance policies, investments, and anything else that the decedent owned. Importantly, too, you must review the decedent’s debts in order to understand what that person owed and how many creditors might be seeking payment from the estate.

Known v. Unknown Debts

Some of these debts will be obvious, in that the decedent will have left notice of the debts and the creditor will be a known entity. You have a responsibility to inform these creditors of your loved one’s death and settle up what the decedent still owes. Other times, however, you might not be aware that a debt or judgment exists. After conducting a thorough review of the decedent’s estate, you have a duty to publish a notification in a local newspaper to let unknown creditors know about the death of your loved one. This way, if a creditor finds out that the person owing them money passed, they can take the necessary steps to identify themselves and then receive the payments they need.

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So many factors go into a person’s estate plan, including a thoughtful inventory of the planner’s assets and a careful decision about how to divide those assets up. At our firm, we sometimes encounter difficult probate disputes over a decedent’s collectibles and heirlooms. On today’s blog, we cover some basic tools you can implement to avoid probate disputes over priceless items.

Create a Detailed Estate Plan

Because a family’s collectibles and heirlooms can often include an emotional value as opposed to just a monetary value, it is best to include detailed instructions about how you want those items to be distributed. Your estate plan should go beyond a typical list of monetary assets and debts. You should write a thorough list of items that you know your heirs might want to inherit, and you should include instructions for exactly who gets which item.

Communicate with Your Loved Ones

It will work out for everyone’s benefit if your loved ones know what to expect when you pass. We always recommend communicating early and often about your collectibles and heirlooms so that your heirs can have a clear understanding of how the items will be passed down. This way, you can also grasp which heirs feel a specific tie to which specific items, and you can keep this in mind when you develop your estate plan.

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For many of our clients in Texas, oil and gas royalties are a part of economic success. How do these royalties play into an estate plan? How are they part of probate proceedings? On today’s blog, we discuss the basics that our clients need to know in relation to this industry; as always, with more specific questions, contact a Houston estate planning attorney you can trust.

Distribution of Royalties Without an Estate Plan

If a Texas landowner dies without an estate plan, and that landowner has the right to oil and gas royalties from the minerals on their property, the royalties will likely follow the rules of intestate succession. This means that the state of Texas will pass the royalties onto surviving heirs according to the state’s mandated family order.

If there is a surviving spouse, the royalties will go to that person. If there are children but no spouse, the assets will go to the children. If there is a spouse and there are children, the spouse will receive one-third of the royalties, while the children receive the other two-thirds of the royalties. The order of intestate succession can be further complicated when there are disputes among family members about who has the right to the royalties at issue.

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The death of a spouse can be challenging enough without having to consider legal implications. When one spouse dies, what happens with the couple’s community property? How does community property affect the probate process? Although these questions are difficult to think through, they are crucial to consider, and today’s blog covers some of the basics with regards to community property and Texas marital estates. As always, with more specific questions, contact a Houston estate planning attorney you can trust to give you advice tailored to your needs.

What Is Community Property?

Community property is property owned jointly by a married couple. In general, any property acquired during a couple’s marriage is community property. Both spouses have equal claim to marital property, even if only one spouse has the sole title to the property. The exception to the definition of marital property is any gift or inheritance. Gifts and inheritances are legally considered separate property in Texas.

Did the Spouse Die with or Without a Will?

If one spouse dies and that spouse had no will, the surviving spouse will usually keep his or her half of the community property, while the other half will go to the deceased spouse’s heirs. If the deceased spouse had no children, the surviving spouse will inherit the entire property. In order for community property to pass to the surviving spouse, that spouse must go through probate proceedings.

If one spouse dies and that spouse did have a will, the community property will pass on to the beneficiaries explicitly named in the estate planning documents. Again, the beneficiaries (whether the surviving spouse or someone else) must go through the appropriate probate channels to inherit.

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