What Assets Do Not Go Through Probate in Texas?~4 min read

Many assets in Texas can pass directly to beneficiaries without going through probate, including jointly owned property, accounts with named beneficiaries, life insurance proceeds, retirement accounts, trusts, and transfer-on-death deeds. Understanding how these assets transfer can help you create an estate plan that saves time and reduces stress for your loved ones.

Why Some Assets Avoid Probate

When you think about passing on your property, you may assume everything must go through probate. In Texas, that is not always the case. Probate is the legal process used to address obligations of your estate and transfer ownership of your property, but certain assets transfer automatically based on how they are titled or designated.

If you understand which assets bypass probate, you can make informed decisions that save time and reduce stress for your family.

Jointly Owned Property with Right of Survivorship

If you own property jointly with another person and include a right of survivorship, your share passes directly to the surviving owner when you pass away. This commonly applies to real estate, bank accounts, and even vehicles, so long as the required specific language is included in the deed or designation.

For example, if you and your spouse own a home together with this designation, your interest transfers to your spouse without court involvement. The same principle applies to joint bank accounts that include specific survivorship language.

Payable-on-Death and Transfer-on-Death Accounts

Many financial accounts allow you to name a beneficiary. These are called payable-on-death or transfer-on-death accounts. When you pass away, the funds in these accounts go straight to the person you named. This includes:

• Bank accounts
• Investment accounts

You will usually set this up through your bank or financial institution. It is a simple step that will make a big difference for your loved ones.

Transfer-on-Death Deeds for Real Estate

Texas allows you to use a transfer-on-death deed for real estate. This document lets you name a beneficiary who will receive your property when you pass away.

You keep full ownership during your lifetime, and the transfer only takes effect upon your death. This can be a useful tool if you want to pass real estate without probate.

Life Insurance Proceeds

Life insurance policies typically do not go through probate if you have named a beneficiary. The insurance company pays the proceeds directly to that person. This means your beneficiary may receive the funds more quickly compared to assets that must pass through the court process. It also keeps the payout separate from your general estate.

Retirement Accounts with Named Beneficiaries

Retirement accounts such as IRAs and 401(k)s usually transfer directly to your chosen beneficiary. As long as you have filled out the beneficiary designation forms, these assets avoid probate.

Assets Held in a Trust

If you place assets into a trust, those assets are managed and distributed according to the terms of the trust agreement. Because the assets are held in trust, they usually do not go through probate. This option gives you more control over how and when your assets are distributed. It can also provide privacy, since probate proceedings are part of the public record. Importantly, having a trust is not enough; the asset must be transferred to and held in trust for the rules of the trust to apply.

What This Means for Your Estate Plan

When you plan your estate, you are not limited to a will. By using beneficiary designations, joint ownership, and trusts, you can move many of your assets outside of probate. This may reduce delays and make things more straightforward for your family. It also allows you to be intentional about how your property is distributed.

Contact Springer Lyle & Dameron

Springer Lyle & Dameron helps individuals and families create estate plans that reflect their goals and help simplify the estate planning process. Aubry Dameron can answer your questions about probate, trusts, beneficiary designations, and other estate planning tools available in Texas. To schedule a consultation, call 940-387-0404 or contact us online.

Springer Lyle & Dameron is located at 1807 Westminster St, Denton, TX 76205.

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