National surveys show that over 55% of adults in Texas and elsewhere around the country do not have a will or trust in place. Without these documents, many families find themselves in probate court after the loss of a loved one. Furthermore, having a will alone does not necessarily keep family members out of probate. This could lead to unwanted conflict and potential legal battles. However, with thoughtful estate planning and the establishment of certain accounts, this strife can likely be avoided.
A transfer on death (TOD) account can be a useful part of an estate plan that can help families stay out of probate court. This account allows someone to transfer assets to a designated beneficiary after his or her death. In fact, more than one beneficiary can be named to an account that allows assets to be divided as desired. Like assets named in a will, no beneficiaries named in a TOD account have any access or control of them until the owner dies.
Transfer of death accounts take precedence over wills, according to legal experts. For example, all assets may have been left to a child in a will. However, if particular assets were named in a TOD account that was intended for a sibling, that person would receive what is in that account. All remaining assets would pass to the child, as written in the will.
Assets named in a TOD account do not have to be distributed equally. So, decisions regarding distribution of assets still have to be made. Also, since some accounts may not be accessed by minors, it is important to address the issue of guardianship if someone has children.
Estate planning can be a complex undertaking and should not be handled alone. A Texas attorney familiar with estate administration law can be a valuable guide while navigating this process. A knowledgeable lawyer will offer clients assurance that their estates will be administered and distributed according to their wishes.