Probate court proceedings (during which a deceased person's assets are transferred to the people who inherit them) can be long, costly, and confusing. It's no wonder so many people take steps to spare their families the hassle. Different states, however, offer different ways to avoid probate. Here are your options in Texas.
In Texas, you can make a living trust to avoid probate for virtually any asset you own -- real estate, bank accounts, vehicles, and so on. You need to create a trust document (it's similar to a will), naming someone to take over as trustee after your death (called a successor trustee). Then -- and this is crucial -- you must transfer ownership of your property to yourself as the trustee of the trust. Once all that's done, the property will be controlled by the terms of the trust. At your death, your successor trustee will be able to transfer it to the trust beneficiaries without probate court proceedings.
If you own property jointly with someone else, and this ownership includes the "right of survivorship," then the surviving owner automatically owns the property when the other owner dies. No probate will be necessary to transfer the property, although of course it will take some paperwork to show that title to the property is held solely by the surviving owner.
In Texas, joint tenancy is the only form of joint ownership that carries with it the right of survivorship. Property owned in joint tenancy automatically passes to the surviving owners when one owner dies. No probate is necessary. Joint tenancy often works well when couples (married or not) acquire real estate, vehicles, bank accounts or other valuable property together. In Texas, each owner, called a joint tenant, must own an equal share. To establish joint tenancy, owners must sign a joint tenancy agreement.
Married couples can also own property together as "community property," but owning property this way doesn't avoid probate when one spouse dies.
Payable-on-death designations for bank accounts
In Texas, you can add a "payable-on-death" (POD) designation to bank accounts such as savings accounts or certificates of deposit. You still control all the money in the account -- your POD beneficiary has no rights to the money, and you can spend it all if you want. At your death, the beneficiary can claim the money directly from the bank, without probate court proceedings.
Transfer-on-death registration for securities
Texas does not let you register stocks and bonds in transfer-on-death (TOD) form.
Transfer-on-death deeds for real estate
Texas does not allow real estate to be transferred with transfer-on-death deeds.
Transfer-on-death registration for vehicles
Texas does not allow transfer-on-death registration of vehicles.
Simplified probate procedures
Even if you don't do any planning to avoid probate, your estate may qualify for Mississippi's simplified "small estate" probate procedures. For more details, see Probate Shortcuts. You can also read about a typical Texas probate.
Last updated on 9/20/2012.