The Right Way to Avoid Probate in Texas | 5 Methods That Work

We’ve all heard the horror stories about probate – the long, drawn-out legal process that can tie up your assets, rack up hefty attorney fees, and add stress to your loved ones during an already difficult time.

It’s no wonder so many Texans are looking for ways to avoid probate altogether. The good news is, with the right planning and strategies, you can bypass the probate process for a smoother, more efficient transfer of your assets to the people you care about most.

In this guide, we’ll walk you through five proven methods for avoiding probate in Texas. These are the same strategies that we’ve used to help countless clients protect their legacy and provide for their loved ones without the hassle and expense of probate.

What is Probate?

Probate is the court-supervised legal process that happens after someone dies. The probate court’s role is to validate the deceased person’s will (if there is one), oversee the payment of debts and taxes from the estate, and approve the distribution of the remaining assets to the heirs.

If there is only a will, or no will at all, the estate still typically has to go through probate so the court can determine who the legal heirs are to the estate.

Drawbacks of Probate

While probate serves an important purpose, there are some key reasons many people want to avoid it:

1. It can be a lengthy process, often taking several months to a year or more to complete.
2. It can be costly, with legal fees, executor fees, and court costs eating into the value of the estate.
3. It’s a public process, meaning your will becomes a public record, and details about your assets and beneficiaries are open to public scrutiny.

Avoiding probate is often a central goal in estate planning. By using the right legal tools, you can save your loved ones time, money, and headaches during an already difficult time. Let’s look at some of the most effective probate avoidance strategies.

Method #1: The Living Trust – Your Top Tool for Avoiding Probate

A living trust, also known as a revocable trust, is a powerful estate planning tool for avoiding probate. It’s a legal arrangement under which you (the grantor) place your assets into a trust for your benefit during your lifetime.

You name a trustee to manage the assets according to the terms you set in the trust document. In most cases, you serve as your own trustee while you’re alive and name a successor trustee to take over after your passing.

How a Living Trust Avoids Probate

When you fund your living trust by transferring your assets into it, those assets are no longer part of your probate estate. The key to making this strategy work is to actually change the ownership of your assets from your name into the name of your trust. This process is called “funding” the trust.

After your death, the successor trustee you named can distribute the trust assets to your beneficiaries without any involvement from the probate court. This is in contrast to a will, which contains instructions for distributing your assets but still requires probate to transfer the assets.

Setting Up a Living Trust

To set up a living trust in Texas, you start by drafting a trust document that names your trustee and beneficiaries and sets out instructions for managing and distributing the assets. Our estate planning attorneys can help you create a living trust that is legally valid and suited to your unique circumstances.

The next step is to fund the trust by retitling assets like real estate, bank accounts, and investments into the name of the trust. If you acquire new assets after your trust is created, you need to remember to place those into the trust as well.

Living Trust vs. Will

Keep in mind that a living trust doesn’t completely replace a will. You still need a will to name guardians for minor children and to cover any assets that aren’t funded into your trust. This type of will, often called a “pour-over” will, simply directs that any overlooked assets be distributed to your trust. While this doesn’t avoid probate completely, it keeps the process minimal.

Method #2: Joint Ownership – A Simple Way to Avoid Probate

Certain forms of joint ownership allow property to pass directly to the surviving owner when one owner dies. In Texas, joint tenancy with right of survivorship (JTWROS) is commonly used for real estate and bank accounts.

For married couples, Texas also recognizes tenancy by the entirety, a type of joint ownership available only to spouses that provides some added asset protection benefits.

The key feature of these joint ownership structures is that they include an automatic right of survivorship. When one owner passes away, their interest immediately ceases to exist, and the surviving owner owns the entire property by operation of law. No probate necessary.

Method #3: Payable-on-Death and Transfer-on-Death Accounts

Many financial accounts, like bank accounts and brokerage accounts, allow you to designate a beneficiary to inherit the account directly when you pass away. For bank accounts, this is called a payable-on-death (POD) designation.

For brokerage and investment accounts, it’s known as transfer-on-death (TOD). In both cases, the named beneficiary simply presents the financial institution with a death certificate to claim the funds, with no probate required.

Method #4: Simplified Probate for Small Estates – When Avoidance Isn’t an Option

Texas offers some simplified probate procedures for smaller estates. If the value of the estate, excluding the homestead and other exempt property, is $75,000 or less, the heirs can often collect the assets through a small estate affidavit or a streamlined court proceeding. One tool that is helpful for smaller estates in Texas is a Lady Bird Deed. A Lady Bird Deed is essentially a “transfer on death” deed that will transfer a home to a designated beneficiary upon your passing, thereby removing the home from the probate process and significantly decreasing the value of the estate – sometimes to under the $75,000 threshold.

While these methods do involve some interaction with the probate court, they are typically quicker and less expensive than a full probate administration.

Method #5: Community Property Agreements (For Married Couples)

Texas is one of a handful of states that recognizes community property, a form of marital property ownership where all assets acquired during the marriage (other than inheritances and gifts) are considered owned equally by both spouses.

Under Section 112.051 of the Texas Estates Code, spouses can sign a community property agreement to automatically transfer the deceased spouse’s share of the community property to the survivor. No probate is needed to make this transfer.

Safeguard Your Legacy with a Comprehensive Texas Estate Plan

Probate avoidance is just one piece of a comprehensive estate plan. Our Texas estate planning lawyers can help you craft a plan that minimizes probate, reduces estate taxes, and ensures your assets are distributed according to your wishes.

Beyond just passing on your assets, your estate plan should also address issues like planning for incapacity, naming guardians for minor children, and passing on your values and legacy.

At The Cleverly Law Firm, PLLC, we understand that every family is unique. We take the time to get to know you, your goals, and your concerns. Then, we use our knowledge of Texas probate and estate planning law to create a personalized plan to meet your needs. Our goal is to give you peace of mind, knowing you’re protecting your assets and providing for your loved ones in the best possible way.

If you’d like to learn more about probate avoidance strategies and estate planning in Texas, we invite you to contact us for a consultation. Together, we can ensure your legacy is protected and your wishes are fulfilled.