Some might wonder what happens to their assets after they pass away. Even if many people are familiar with wills, not everyone is familiar with the probate process. With this in mind, it is important to familiarize yourself with what probate is, what it means for your estate and which assets require it.
What is probate?
If you pass away, courts will settle your estate through probate – a process that transfers the ownership of your probate assets to your heirs. The executor you appoint in your will will fulfill your last wishes and distribute your assets to the appropriate beneficiaries. However, if you have any outstanding debts, the executor or administrator will use your estate to settle them before transferring what remains to your heirs.
What are some examples of probate assets?
Assets typically require probate if you are their sole owner. Similarly, assets that transfer ownership after you pass away do not need to go through probate. The most common examples of such assets include:
- Real estate that you solely own in Texas and in other states
- Solely owned Bank accounts without a payable-on-death designation
- Any of your solely owned vehicles
- Personal property like your jewelry, clothing, collectibles, firearms and household items
- Business interests held individually, including closely held shares or membership interests that require estate action to transfer
- Refunds or payments that people need to pay you, like unpaid wages or reimbursement claims that require an executor or administrator to pursue
However, not all assets need to go through the probate process in Texas. Assets with named beneficiaries or real estate with transfer-on-death deeds under the Texas Estates Code Chapter 114 can generally bypass probate.
What makes probate so important?
Probate is an essential legal process that ensures your assets reach the beneficiaries you appoint. This means that after you pass away, your estate will go to the appropriate people. The process also uses your estate to pay your debts and taxes. It acts as the final legal mechanism to settle a person’s financial affairs, acting as a safeguard for heirs, beneficiaries and anyone you may owe money to.