Houston Estate Planning and Elder Law Attorney Blog

How an Irrevocable Trust Can Be Incorporated into a Houston Estate Plan

Published on: June 13, 2023 | By David W. Miller

In the past, on our blog, we have gone over the possible benefit of establishing a trust when you are engaging in the estate planning process. Forming a trust can be complicated, and there are several different kinds of trusts that fit different sets of needs, depending on the nature and size of an individual’s estate. In particular, an irrevocable trust is a tool that might be right for you as you are thinking about how to organize your estate.
An irrevocable trust is a specific kind of trust that allows the trust’s creator to designate assets to a beneficiary – once transferred, the trust cannot be altered. The trust’s creator automatically loses control over the assets once the beneficiary receives them.

Advantages and Disadvantages: What You Need to Know

An obvious disadvantage to the irrevocable trust is that as soon as the transfer happens, you (the grantor) lose control over the trust property. The irrevocable trust can also be subject to higher tax rates than other kinds of trusts.
On the other hand, however, any assets that are part of an irrevocable trust do not contribute to the value of a person’s estate, which is what often determines how much an individual pays in taxes outside of the trust. In addition, property in an irrevocable trust avoids probate, which can be extremely beneficial for a person’s loved ones after that person is gone.

Irrevocable trusts can also allow individuals to continue accessing government benefits like Medicare and Supplemental Security Income. The government will generally refrain from counting money in an irrevocable trust as part of someone’s total net worth when deciding whether that person qualifies for important benefits, which allows those individuals to avoid being exempt from receiving the money they might need.

Choosing the Right Trustee to Manage Your Trust

Published on: June 10, 2023 | By Thomas W. McCulloch

Choosing the Right Trustee to Manage Your Trust

Organizing your assets in the form of a legal trust can be a valid and helpful tool in estate planning. If you are establishing a trust, you are likely trying to decide who to appoint as your trustee, which can often be a tough decision. A trustee, by definition, is an individual with the power to administer the trust’s property in accordance with the desires of the trust’s owner. In thinking through who to choose as your trustee, there are several main considerations you should keep in mind.

Trustworthiness

The most important quality of a trustee is trustworthiness. When you establish a trust, you articulate your goals, priorities, and desires for how the trust property will be administered. The trustee is the person that ensures this process goes smoothly and is in accordance with the owner’s goals. If you do not trust the person you appoint, there is always a risk that he or she will not work with your best interests in mind. Appointing someone trustworthy can help ensure that the entire process goes as you plan when you establish the trust.

If you appoint a trustee that is also a close family member or friend, consider possible implications if a conflict arises out of issues around the trust. While trustworthiness can be inherent in close personal relationships, sometimes hiring a third party can be helpful to make sure things run smoothly without additional interpersonal conflicts.

Texas Probate FAQs

Published on: May 31, 2023 | By David W. Miller

At McCulloch & Miller, we have 35 years of experience in Texas probate law, which gives us a unique perspective on estate planning and on the probate process. Over the years, our clients have come to us with their questions, big and small, because they trust that we will deliver the answers and results they need. Here are some of our most frequently asked questions in the field of probate:

What is probate?

The probate process is when a court receives, reviews, and accepts a decedent’s will, then distributes the decedent’s assets to his or her beneficiaries.

Is probate required in Texas?

The short answer is yes; probate is required under certain circumstances. Under the Texas Estates Code, a will is not sufficient to transfer title to a beneficiary without having gone through the probate process. However, as we have discussed extensively on our blog, there are ways to avoid probate and minimize the time, cost, and toll that the probate process can take on you and your family.

How long does probate take?

Probate can take anywhere from a few months to a couple of years. The timing depends on a variety of factors, including the size of the estate, the presence or absence of disputes about who gets which property, and the backlog of the probate court.

What Assets Must Go Through Probate in Texas?

Published on: May 31, 2023 | By David W. Miller

The probate process involves many logistical hurdles that often require time and money, and it can be frustrating for those individuals a decedent leaves behind. It is important to recognize, however, that not all assets must go through probate – in fact, there are some assets that are automatically exempt from the process altogether. At McCulloch & Miller, we specialize in separating these two kinds of assets so that families do not have to unnecessarily go through a process that will drain their resources during an already difficult time.

Probate Assets

Put simply, probate assets are those that are governed by the terms of a will. All real property and assets are subject to probate unless they fall under a category that allows them to be exempt from the process. So, for example, if a decedent had a home, a piece of land, or money kept in a non-exempt bank account, those assets will have to go through probate. The probate court learns of the individual’s death, makes sure all potential beneficiaries have received notice of the death, then divides the assets accordingly. This process can take anywhere from a couple of months to a couple of years.

Non-Probate Assets

The following assets avoid probate automatically, just by the nature of the way they are organized:

Trust assets: in the past, we have reviewed different kinds of trusts on our blog, and exempting assets from probate is another benefit to putting money or property into a trust.
Property owned in joint tenancy with a right of survivorship: when a piece of property is owned jointly with a right of survivorship, it means that multiple individuals own the property together and that when one person dies, the others automatically own the property. This kind of property, therefore, avoids any kind of probate litigation.
Insurance policies: life insurance policies, for example, allow a decedent to pass proceeds to a beneficiary as soon as that person dies.
Transfer-on-death accounts: certain kinds of bank accounts can be designated to transfer to another person the moment the account owner dies. These kinds of accounts, however, have to be designated as “transfer-on-death” before the owner dies.

What You Can Do to Avoid Probate Litigation

Published on: May 24, 2023 | By David W. Miller

As a general rule, a decedent’s assets in Texas must go through the probate process in order for those assets to pass on to the person’s beneficiaries. Because this process can be daunting and time-consuming, clients often come to us for help in figuring out how to avoid probate altogether. By organizing assets and planning ahead, there are ways to prioritize efficiency in passing your estate to your loved ones after your death.

Property

Real property (land, a home, or a building), is typically subject to probate. However, by owning property with another individual, you can automatically pass that property onto the other individual when you die. The property must be owned with the “right of survivorship,” meaning whoever else owns the property upon the decedent’s death has the right to continue owning it if and when they survive another owner.

A “transfer-on-death” deed is another way to pass along real property. This kind of deed must be recorded and processed before the property owner’s death. It essentially means that as soon as a person dies, the property automatically transfers to the beneficiary without any timely litigation.

Probate Considerations When There is Not a Will

Published on: May 23, 2023 | By Thomas W. McCulloch

For many decedents, the probate process involves a probate court judge reviewing that person’s will, ensuring that the will is valid, and then distributing the person’s assets to his or her beneficiaries. At times, however, the probate court has to decide how to proceed when there is no will in place. Even when there is no will, the decedent’s assets and debts must be somehow distributed; in Texas, there are certain rules that dictate how this process plays out.

Rules of Intestate Succession

You may have heard the term “intestate succession” either on our blog or otherwise. This term refers to the distribution of assets to a decedent’s loved ones according to the state’s rules. Essentially, for a person that dies without a will, there are rules and regulations in place that say where that person’s money, property, and debts will go.

If the decedent has a spouse, that spouse will be first in line to inherit the decedent’s estate. If there are no children or parents, the spouse will, in fact, inherit the entire estate. If, however, the decedent and spouse had children together, the spouse receives 1/3 of the decedent’s personal property and the right to their physical property, while the children inherit everything else.

Should You Consider Avoiding Probate?

Published on: May 22, 2023 | By David W. Miller

In the past, our blog has focused on the probate process and the many different implications for decedents, family, and friends. As we have emphasized, the probate process is complex, and it involves many actors as well as a detailed procedure that can take anywhere from a couple of months to a couple of years to play out.

When getting to know our clients and their individual needs, we often end up recommending that people try to avoid the probate process altogether – that is, we encourage our clients to think about how to organize their assets and debts in a way that makes them exempt from having to be reviewed by a probate court at all. Because it is so common for a person’s estate to go through probate, it is also important to understand why avoiding probate might be worth considering.

Reasons to Consider Bypassing Probate

First of all, the probate process happens through the probate courts, so everything that goes on becomes part of the public record. If your estate or your family dynamics involve information you would rather keep confidential, avoiding probate might be right for you.

Does Texas Have a Simplified Probate Process?

Published on: May 18, 2023 | By Thomas W. McCulloch

In Texas, the probate process can be overwhelming for beneficiaries and those involved in distributing a decedent’s estate. The good news, however, is that for those whose assets are below a certain amount, there is a simplified probate process available. This process is shorter and more efficient, but it still comes with several important procedural steps that cannot be avoided.

Who Qualifies for the Simplified Probate Process?

There are three basic requirements to qualify for the simplified probate process: the decedent must not have left behind a will, at least 30 days must have passed since the individual’s passing, and the value of all property belonging to the decedent must not exceed $75,000. This $75,000 amount does not include certain exempt property, which is more closely defined in the state statute laying out this procedure.

What Does the Simplified Probate Process Entail?

As the name suggests, this process is less costly and involved, but it still has certain important steps that must be taken. First, inheritors must fill out a form called a “small estate affidavit.” This form essentially tells the court what property and debts are involved in the decedent’s estate, and it lists the people that stand to benefit from the estate’s distribution.

An Overview of the Texas Estate Process

Published on: May 10, 2023 | By Thomas W. McCulloch

We have covered the definition of the probate process on our blog in the past, which is vital information for those developing their estate plans. Also relevant, however, is the specific procedure for probate in the state of Texas since probate works differently in each state and can have a unique set of rules and regulations. At McCulloch & Miller, we specialize in Texas law and are recognized as experts in the field of the probate process in Texas.

What is Involved in Probate in Texas?

In Texas, there are several steps that initiate the probate process once an individual has died. First, the person’s representative files a petition with the court, and beneficiaries, as well as creditors, receive notice that the probate process has begun. Representatives pay off debts and taxes, then distribute the remaining assets with the help of a probate court.

There are certain rules specific to Texas that apply to the probate process, and that might not apply in other states. For example, a decedent’s representative has four years from the date of death to file for probate. If four years come and go, and the representative has failed to file, the court will divide the decedent’s assets based on certain laws of intestacy, meaning rules that dictate which family members or loved ones receive a decedent’s assets when there is no valid will.

What is Probate and Why You Need to Know How Texas Probate Law Works

Published on: May 10, 2023 | By David W. Miller

What is Probate and Why You Need to Know How Texas Probate Law Works

Many beneficiaries to a person’s will find themselves becoming familiar with the probate process once they try to access the funds that their loved one has left behind. It can be important to understand the probate process because it is often the vehicle through which a decedent’s assets are passed on, but it can be complicated and, at times, litigious. At McCulloch & Miller, we are committed to making sure all of our clients understand the probate process so that they can know what will happen with their assets (or the assets of their loved ones) in the future.

The Definition of Probate

Probate is the process of managing and administering the property, money, stocks, or other assets in a decedent’s estate. When a person leaves behind a will and asks that their estate be passed along to their named beneficiaries, that estate often must be reviewed by a probate court before the beneficiaries can access the assets. Typically, those involved in probate are the judge, the personal representative of the decedent, and those entitled to receive the decedent’s assets.

What Does Probate Involve?

The first step in the probate process is for the court to receive a petition for probate, indicating that someone has died and that their assets need dividing. At that point, the court mails notice to all named beneficiaries to let them know that the probate process has begun.