Many people in Texas are motivated to begin their estate planning after they experience the death of a loved one. Having to go through the often frustrating process of probate may inspire some to spare their own heirs the complications and the sometimes prolonged wait before they receive their inheritance. However, with proper planning, there are several types of assets that can bypass probate relatively easily and go directly to the beneficiary.
For example, regular savings and checking accounts may skip probate if the account holder has completed a payable on death form. Such forms may also be used for money market accounts and certificates of deposit. Similar designations can be made for investment securities, real property and retirement accounts. However, forms transferring funds or deeds must be carefully prepared to be legally binding.
Life insurance and annuity benefits typically bypass probate if the policy holders have properly designated beneficiaries. With such assets, beneficiaries are designated within the policy, and in many cases, they receive their payout soon after the claim on the policy is made. A bonus for recipients of life insurance benefits is that they are usually not taxable. However, as with all estate planning, policy holders must keep their beneficiary designations up to date in order for the policies to meet their goals.
Probate can be a long, drawn-out process, and waiting for one’s inheritance can be frustrating. Someone who wants to spare his or her loved ones this inconvenience may want to take advantage of every estate planning tool available. By consulting an estate planning attorney in Texas, one can learn what options are available and which will best suit his or her circumstances.
Source: thefencepost.com, “Avoiding probate with beneficiary designations: Part 1“, Chris Nolt, April 14, 2017