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How To Avoid Probate In Texas, Even If You Have Few Assets

Not everyone has a fortune to pass along. Nevertheless, everyone, rich or poor, should have an estate plan.

Even if you only have a few thousand dollars' worth of assets, putting in place the basic elements of estate planning will ease the burden of having your assets tied up in probate for a long time after you're gone.

For example, if you have an IRA, by making a beneficiary designation upon death will eliminate the need for probate.

The beneficiaries will have an opportunity to stretch out the tax from the IRA distributions over their lifetimes. By contrast, if the deceased's IRA pays into his or her estate, probate will be required.

It can also be a good idea to name children as joint tenants or pay-on-death beneficiaries on bank accounts to avoid probate. There are some drawbacks to that strategy to keep in mind, however.

If a child beneficiary dies before the parent, the living descendants of that child will not inherit anything. Only the surviving joint tenants or pay-on-death beneficiaries are entitled to shares of the estate.

This strategy is not practical for home owners because the beneficiaries will be added to the title and become part owners while the parent is still alive. If the beneficiary is sued or has creditor problems, the property could be at risk. If a parent needs to qualify for Medicaid to cover the cost of long term care, having added a child's name to the title of the parent's home may create a delay in approval of Medicaid benefits. And when the property owner dies, his or her interest in the property will go to beneficiaries through probate, something the property owner was hoping to avoid. Instead, home owners should consider setting up a revocable living trust which can avoid the probate process.

Whether you create a trust or have all property pass by designated beneficiary, there are other documents that you will need to care of you while you are still alive. A durable power of attorney and an advance health care directive (a.k.a. living will) are critical because they allow children to make legal and medical decisions if a parent is incapacitated.

Even if you think you don't own enough property or other assets to warrant the drafting of a will, a trust or another wealth-protection strategy, we believe everyone needs some form of estate planning in place. At the very least, we recommend you have powers of attorney documents to appoint someone to make health care and financial decisions for you in the event you are incapacitated. We also recommend everyone create a living will that stipulates how you wish your end-of-life medical care decisions to be handled.

Contact our office if you have questions about what kind of estate planning strategies you are best suited for or whether any planning documents you created in the past are still legally effective and up to date with the current laws.

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  • Richard P. Johnson is Board certified Texas Board of Legal Specialization Estate Planning And Probate
  • Wealth Counsel
  • The College of the State Bar Of Texas Professionalism Through Education
  • Dallas Bar Association
  • Elder Counsel LLC Your Success Our Commitment Excellence in Elder Law and Special Needs
  • NAELA tm National Academy of Elder Law Attorneys, Inc.
  • Marcie Johnson
    was named in
    Best D 2016
  • Richard Johnson
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2400 Lakeside Blvd.
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Richardson, TX 75082

Phone: 972-364-7176
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