Q: What is Probate?
A: Probate refers to the process where a court oversees the administration of a deceased person's estate. Probate property refers to property that was titled in the name of the deceased person. A probate proceeding takes place in the county where the deceased person resided. If the deceased person also owned real property located in another state, probate may be required in that state as well; this is referred to as an ancillary probate proceeding.
Q: What is the purpose behind the probate process?
A: The purpose of the probate process is to ensure that any final bills and expenses are paid, including any taxes owed; any assets remaining are distributed to the beneficiaries named in a will; or if the decedent died intestate (without a will), any assets remaining are distributed to the correct heirs under the Texas laws governing intestate succession.
Q: What is a living trust and how does it differ from a will?
A: A living trust is a trust created during a person's lifetime. Assets held in a living trust do not require probate. When the person who created the trust (referred to as the "trustor" or "settlor" of the trust) dies, the assets in the trust are distributed to the persons named, and in the manner specified, by the trust. The person or entity named in the trust as the successor trustee oversees the administration of the trust after the trustor or settlor dies.
Living trusts offer other advantages beside probate avoidance; they provide a plan for the incapacity of the trustor and offer certain tax advantages for the beneficiary.
While you create a will during your lifetime, it has no legal effect until your death. Assets passing pursuant to a will may require probate administration. Wills also do not provide a plan for incapacity.
Q: Are life insurance policies and retirement benefits (such as IRAs) subject to probate?
A: Life insurance policies and retirement benefit accounts have beneficiary designations which control their disposition upon your death. Assuming the stated beneficiary survives you, probate will not be necessary. However, if the named beneficiary is deceased and a contingent (back-up) beneficiary isn't named, probate may be required to determine who is entitled to the asset. There are tax and other planning implications involved in designating a beneficiary-careful consideration should be given when naming a beneficiary.
We understand that every client situation is unique, and we invest the time to get to know you, including your goals and planning objectives. Ms. Lester takes the time to fully explain your planning options in clear and understandable terms. Contact Wendi Lester & Associates, P.C. today for a consultation regarding your estate planning or probate matter.