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Things you can do so your Texas estate avoids probate

On Behalf of | Aug 29, 2023 | Estate Planning |

Probate is a legal process that happens after you die. It involves validating your will, paying off your debts and distributing your assets to your beneficiaries.

However, your heirs can avoid probate in Texas and make the assets distribution process smoother.

Designate beneficiaries on insurance and retirement accounts

Some retirement accounts, such as IRAs and 401(k)s, allow beneficiaries to enjoy the benefits of tax-deferred growth or tax-free withdrawals. Similarly, life insurance policies provide a direct payout to beneficiaries. These beneficiary designations offer a convenient way to pass on assets while minimizing legal complexities and ensuring a timely distribution. Contact the companies that hold the accounts and specify your beneficiary.

Gift your assets

While you are alive, you can gift your assets to your heirs. Texas has no state gift tax, but you can gift up to $17,000 per person in 2023 without incurring federal taxes. By gifting assets before your passing, you reduce the value of your estate, potentially lowering the probate threshold.

Community property distribution

Property acquired during the marriage becomes joint community property, so when you pass away, the ownership automatically transfers to your surviving spouse without the need for probate. Your spouse experiences a seamless transition of ownership while preserving the community property tax benefits.

Create a small estate affidavit

If the total value of your estate is relatively small (under a certain threshold), your beneficiaries might use a Small Estate Affidavit to claim the assets without going through probate. This process requires a sworn statement and a waiting period.

Avoiding probate in Texas can save you money and provide peace of mind for you and your loved ones.