The process of handling a person’s property after their death can be called probate. It is one of the legal processes that are involved in estate planning. There are two basic types of probate in Texas; judicial probate and dependent administration. Texas law provides a wide variety of other options, especially when it comes to handling small estates. A good lawyer can help you determine which option is right for your situation.
Judicial Probate deals with estates that are not subject to any particular law. This means that people can inherit properties without any formal agreements or even any clearances by a named beneficiary. In this type of situation, there is an appointed trustee who administers the estate. Once death occurs, the assets of the deceased are distributed to the survivors according to a set of probate instructions. Beneficiaries are usually directed to pay off debts and obligations, distribute their remaining assets, and pay taxes on the inheritance. People who own property during their lifetime, they may choose to have the property pass through their estate to their surviving family members.
Another option is dependent administration, in which the person making the final decisions (known as administrators) has no special relationship with the deceased. Dependent administration gives the power to someone else to handle an estate, according to the laws that currently exist in Texas. Because most of these administrators are family members, they must follow the probate law. They will also owe taxes on the inheritance if the owner made no written choices during their lifetime.
Another option to address probate is called independent administration, which is not related to any specific type of probate but instead addresses assets that cannot be managed through either type of process. Because there may be many assets to be divided when one or both parties die, this method of administration makes sense. The probate courts may allow for the distribution of the remaining assets, depending on their value, according to a set of rules and regulations. Because independent administration law offers more flexibility than traditional probate, this method of final resolution is growing in popularity among beneficiaries.
Method of Distribution:
One area that is often overlooked when the beneficiaries of probate must decide where their inheritance should go is retirement accounts. Texas allows beneficiaries to place their money in a Texas Investment Board IRA, or Texas Individual Retirement Account. To make withdrawals, the account holder must meet the qualifications, which include being at least eighteen years of age, and having a regular and dependable income. The money can then be withdrawn tax-free by the year’s end, as long as it is kept in the IRA. Because there is no living trust involved, beneficiaries can easily access their retirement accounts without the worry of heirs squandering their inheritance. This method of distribution has become especially popular in recent years because of the Texas Retirement Authority Act, which provides much of the regulatory guidance for Texas retirement accounts.
Another way to distribute property or inheritance when there is no will is through a Texas living trust. Unlike most other forms of probate, this process involves a trustee acting as a “consignor” who is responsible for the disposition of the estate and must get along with the executor. If there is no will, the trustee must comply with state requirements for meeting the requirements for trust succession. If the executor does not get along with the trustee, there may be additional fees assessed. Also, depending on the state where the estate is situated, the executor may be required to obtain a court order to protect his or her interest.
Some things can go wrong during probate proceedings, which can delay the proceedings. In these instances, the personal representative hired to handle the estate must get along with everyone involved. This includes the executor, estate planners, attorneys, and anyone else who has an interest in the estate. Failure to get along can result in delays or even outright disqualification.