These 6 Probate questions and answers sum up everything you ever wanted to know about probate but were afraid to ask.
Q: What is probate?
Probate is settling your affairs. It is proving that the Will is yous or, without a Will, who the heirs are. That’s all. With a properly drafted and executed Will, the person you name to do this only needs to go to court once: to be appointed and to pick up the Letters Testamentary which give her legal control of your property.
Q: Can I avoid probate?
No. A Revocable Living Trust can have many benefits, but your affairs must still be settled: the expenses of your last illness, the cost of handling your earthly remains and any outstanding taxes must be paid. Probate “proves” that has been done.
With or without a Revocable Living Trust, a lot of your property may pass outside a Will. But even if this is less than $75,000, your heirs must file an Affidavit of Small Estate with the probate court.
I talked more about avoiding probate as a recent guest on the radio show, Ask the Experts. Listen to the episode here: Why Do You Want To Avoid Probate?
Q: Is probate expensive?
It does not have to be.
In Texas, a properly written Will can name an executor who will serve without bond in an “independent administration,” which means independent of court supervision. The executor takes the will and death certificate to court, answers half a dozen simple questions and receives Letters Testamentary empowering him to settle your affairs. He must inventory your assets, notify your heirs and creditors. By organizing your financial and property records you can make his job relatively easy.
Q: Is probate time-consuming?
It does not have to be.
In Central Texas, with a properly drafted and executed Will your executor can get into court within a month and be done thereafter – if there are no disputes.
Q: What about estate taxes?
Probate is settling your affairs.
While your estate must file a tax return if it earns over $850 in any one calendar year (in 2021), estate taxes are imposed by the IRS, not the probate court.
The federal estate tax exemption for a couple is now over $22.8 million.
Texas has no estate tax and no inheritance tax.
Q: If my estate is smaller, should I still have an estate plan?
You need to protect your assets and provide for your retirement and health care expenses and those of your spouse. You need to understand how Medicare, other health or hospital insurance, life insurance, pensions and retirement accounts can be made to work together in ways which benefit you most.
You need to provide for minor children, children of a previous marriage and for family members who have or may develop special needs; to protect your loved ones from unnecessary taxes, creditors and possible former spouses and protect your children from the temptations which might accompany early receipt of lump sums.
Read more here on: Staying in Charge.
Elder law attorney, Terry Garrett, is a member of the National Academy of Elder Law Attorneys and is an Approved Guardianship Attorney. She assists people in elder law, estate and special needs planning, guardianship and settling estates. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.