Real Estate

Preplanning to avoid probate

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There are several things you can do now while you are alive to prevent your loved ones from having to probate.  This is especially important if you are married and your spouse will be your sole beneficiary.  This is not to say you should not have a will.  Everyone should have a will just in case some asset comes up that we didn’t plan for properly or in the event you die accidentally and litigation ensues.

  1. Name Beneficiaries – you can name your beneficiary on various types of accounts, including bank accounts, life insurance, retirement accounts, and investment accounts.  Review these accounts every few years to ensure they have the beneficiary of your choosing.
  2. Joint Tenants with Right of Survivorship – when you purchase a house ask the title company have the deed read “joint with right of survivorship” which transfers the house to your spouse immediately upon death.  If you already own your house, you and your spouse can execute a new deed that makes the ownership “joint with right of survivorship” so that the house is automatically transferred upon death.
  3. Living Trust – while this may seem to be the most straight forward approach, only an attorney can tell you if you really need one.  Many people get living trusts and never properly fund them so probate turns out to be necessary anyways.  Also a living trust does not protect you from liability as many people think it does.
  4. Transfer on Death Deed – this document is a new statutory document created by the Texas Legislator to help protect your real estate.  While this document is a deed, hand-with-pen-over-blank-checkboxes-in-a-form_573x300.jpgit is not a traditional deed, in that it does not immediately transfer ownership to your beneficiary but allows you to instead retain all ownership rights.  Upon your death the real estate automatically transfers ownership to your named beneficiaries. These types of deeds are used mostly by people wanting to transfer their home to their children or grandchildren upon their death.

For more ideas and ways to plan so your family can avoid probate court contact your attorney!  Remember that “an ounce of prevention is worth a pound of cure”.

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SURVIVING SPOUSE’S HOMESTEAD RIGHTS

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house
On the death of the husband or wife, leaving a spouse surviving, the homestead shall descend and vest in like manner as other real property of the deceased.” TX PROB CODE § 283. Also, the surviving spouse is entitled to retain a constitutional survivor’s homestead right for life or for so long as the survivor elects to use the homestead. This right is not affected by the deceased spouse conveying the property to a third party through their will.

Here are a few questions which are regularly asked with regards to surviving spouse’s homestead rights:

1. Can the deceased spouse’s administrator force the sale of the house?
Constitutional rights protect a homestead against forced sale and partition so long as the surviving spouse chooses to use and occupy the homestead. TX PROB. CODE § 284.

2. Does the surviving spouses rights end when move out of the property? Have they abandoned their homestead rights?

The surviving spouse’s right to occupy or use the homestead for life or for so long as the surviving spouse chooses to do so.   It is not required that the surviving spouse continuously reside in the property to be considered as using it.

3. Who is responsible for maintenance on the property?
The surviving spouse will be responsible for making repairs and generally maintaining the property, but the duty to repair does not go so far as to require that the property be maintained in the same condition that existed when the homestead right was originally established.

4. Who is responsible for the mortgage on the property?
The spouse is responsible for the mortgage interest and the heirs/beneficiaries is responsible for the mortgage principal. A purchase money lien is not subject to the homestead exemption, thus the property could be foreclosed upon default. TX PROP CODE § 41.001(b)(1).

5. Who is responsible for the insurance premiums on the property?
The surviving spouse is not responsible to insure the property against loss. Even if the surviving spouse did insure the property, the insurance proceeds upon fire or damage would be made to the surviving spouse and not to the heirs/beneficiaries. The heirs/beneficiaries (children) would be responsible to carry insurance on the property to preserve their asset.

6. Who is responsible for paying the taxes on the property? The heirs/beneficiaries are usually responsible for all tax payments, however, if the spouse or minor children retain a homestead right then they would be responsible for the property taxes.  The homestead is not exempt from forced sale to pay delinquent taxes.  TX PROP CODE § 41.001(b)(2).

Disclaimer: The content of this article is provided for informational purposes only and does not constitute legal advice.