Probate Litigation Texas

PROBATE LITIGATION TEXAS LAWYER

Probate litigation is necessary when heirs to an estate disagree about their entitlements under applicable probate law in Houston, Dallas, Fort Worth or Austin.  Often times these disagreements revolve around disputes concerning the following subjects:  

Types of Non-Probate Assets

Non-probate or non-testamentary assets generally fall into three categories:

  • Assets that pass by right of survivorship
  • Assets that pass by beneficiary designation
  • Assets held in trust

In all three cases, the nature of the property can both:

  • Direct the property to someone other than the will beneficiaries
  • Avoid the need for a probate court proceeding

Advantages of Avoiding Probate

It has been estimated that two-thirds of Americans do not have wills. For those people who are intestate, the avoidance of probate through the use of accounts that designate a beneficiary is frequently a reasonable option.

People often greatly value the avoidance of probate. However, this bias towards avoiding probate is often encouraged by the providers of non-probate assets (banks, brokerage firms, and insurance companies), whose primary motivation is to promote their products. These companies are rarely involved in the entire probate process, but typically experience only the initial stages, when the spouse or surviving account holder becomes irate upon hearing that they must probate a will before gaining access to funds.

Disadvantages of Avoiding Probate

Placing assets in probate-avoiding accounts can have undesired consequences as follows:

  • People often do not understand the nature of the way in which they hold property. For example, a person may believe an asset is held with survivorship rights when in fact it is a tenancy in common
  • A carefully-designed tax plan can become useless if all of the couple's assets pass automatically to the surviving spouse outside of the probate process and the terms of the will
  • A survivorship agreement between spouses is not automatically revoked by divorce. [See Prob C §455 (methods of revoking community property survivorship agreement do not include divorce); Prob C §456(b) (proof required to establish validity of community property survivorship agreement does not include evidence that owners were still married to each other at death); Prob C §439(a) (an agreement with the proper language will "confer an absolute right of survivorship"); Prob C §439A(b)(4) (model language for survivorship accounts does not mention the effect of divorce)]
  • Non-probate accounts do not allow planning for contingencies. If both co-owners of a survivorship account die simultaneously, the assets will be subject to probate and will pass under the laws of descent and distribution if there is no will. If a POD account has two beneficiaries and one predeceases the account owner, the predeceasing beneficiary's half will not pass to his or her children, but will pass instead to the other POD beneficiary, regardless of what the account owner intended

An estate planning attorney should review all of the client's accounts and beneficiary designations, making changes as necessary to coordinate these assets with the overall estate plan. The attorney should also leave the client with clear instructions on how to register accounts and designate beneficiaries in the future as they acquire new assets. Since financial institutions typically gear their advice and marketing toward customers without wills, clients who have just executed wills must learn to reject that advice.

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