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  • Chiang Law Firm

Updated: Aug 23

For most of our clients, they want to have a non-probate estate. There are lots of benefits to non-probate estates. Namely, probate can be long and expensive due to court intervention and non-probate estates avoid that by staying out of probate.



WHAT IS A NON-PROBATE ESTATE?


Non-probate estates are estates that can pass entirely to your beneficiaries without any formal probate action in the courts. Most of my clients that come in who want non-probate estates went through the probate process recently with a loved one and realized that even simple probates can be cumbersome and expensive. The most basic probate that I do with a will can still cost around $3,000 and will take 6-9 months to complete. A properly set up non-probate estate will cost maybe $1,000 in legal fees and advice, and might take 3-4 weeks just to draft and file any additional documents that might be needed.


The average person might have 6 kinds of assets that pass to their loved ones. A house, a car, a bank account, a retirement account like a 401k or IRA, a brokerage account, and life insurance. You can pass your bank account, IRA, 401K, or life insurance through something called a PAYABLE ON DEATH BENEFICIARY or TRANSFER ON DEATH BENEFICIARY. Meaning, you heir would supply a death certificate to the bank/insurance company, and they’ll just write a check to whoever is the beneficiary.



HOW DO I CREATE A NON-PROBATE ESTATE?


For the assets that do not transfer automatically, we will have to do something else. For example, you can execute a transfer on death deed for your house or transfer on death title for your car. Transfer on Death processes for your house and car are similar to the payable on death beneficiary, so once you pass all 6 assets to your heirs, there’s no real reason to do a probate unless there’s an asset that still needs to be passed. These examples could be something that doesn’t have a POD beneficiary like real estate, oil and gas interests, business interests, intellectual property interests, a bank account or life insurance policy with a blank beneficiary designation or even newer assets like NFT’s and crypto.


You can also achieve a non-probate estate using a properly structured and funded revocable trust. At Chiang Law Firm we regularly use a combination of trusts, Beneficiary designations and Transfer on Death deeds/titles to create a non-probate estate for our clients.


DRAWBACKS


There are some shortcomings to this “easy“ form of probate. For example, if you name a minor as a beneficiary or someone who is disabled and is receiving Medicaid benefits as the outright beneficiary, you might have done more harm than good. For those estates we recommend using a system of transfer on death beneficiaries and trusts to make sure that those beneficiaries receive the benefit of their gifts, without causing future trouble for them. In addition, if you have heirs that should not have access to their money, such as those with substance abuse problems, or you want to do sophisticated tax planning you will need to reconsider this approach.


WHERE DO I START?


Call us so we can help guide you through this process! If you think you or someone you love has any questions about estate planning, give us a call at Chiang Law Firm at 713-568-9206, we would love to hear from you!

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  • Chiang Law Firm

We will be closed for the Independence Day holiday on July 4. We will be open July 5 to serve you!






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  • Chiang Law Firm


There is no one good place to keep your will. You have to balance 2 things: accessibility and security. For example, your coffee table in your living room is extremely accessible, but not very secure. A safe deposit box inside a bank vault is extremely secure, but not accessible.


BUT FIRST, WHY KEEP YOUR WILL SAFE?


Wills are special. Your Will is the only legally enforceable document that can distribute your estate to your beneficiaries. They have technical requirements that make them challenging to obtain. You also want to make sure they're somewhere secure so they aren't tampered with. Finally, you want to make sure your Will is kept safe in a place where your important people know where it is going to be because only ORIGINAL WILLS get the benefit of being probated here as the Will in Texas. Copies of any kind: photocopies or digital copies, are inferior and will go through several additional steps before the court will accept them.

SAFE DEPOSIT BOXES

Many of my clients have safe deposit boxes. Safe deposit boxes are great, however here are some considerations:

  1. Do your important people (your executor or heirs) know you have a safe deposit box? If not, they’ll never find your important papers and it will be as if you never got them done!

  2. Do your important people know WHERE your safe deposit box is located? Yes, you might have a safe deposit box at Bank of America or Wells Fargo, but WHICH Bank of America or Wells Fargo? There’s one on every corner!

  3. Do your important people know where your KEY is located for your safe deposit box? If it is hidden in the back of your medicine cabinet or in a box with 15 other sets of old keys, they might never find it!

  4. Are your important persons signatories to your box? If they are not signatories, the bank will not let them into the safe deposit box. A durable power of attorney can’t even get into a safe deposit box. The only way they can open the box is by getting a court order to open the box to look for a will, which is expensive and time consuming.

Other considerations about safe deposit boxes are that they are limited to bank business hours access, so you might not be able to get into a safe deposit box on the weekend or on a holiday. Also, a minor consideration, but as an attorney, I dislike folding my wills because it makes it hard to scan later on. So I present Wills in a document protector that is inside a binder. Most of my clients do not have safe deposit boxes large enough to store an entire binder. Personally, I think many of the disadvantages to keeping a will in a safe deposit box outweigh the benefits.

HOME SAFES

Many of my clients also have home safes. Home safes are very convenient and secure, however, many of the same concerns for home safes apply as safe deposit boxes, namely your important people need to know the Will is in the safe, WHERE the safe is located, and the code to get into the safe. Otherwise, we will be hiring a locksmith or safe cracker to get into the safe!

FIREPROOF BOXES

I like fireproof boxes because they have a feature that is great for the Gulf Coast: portability in the event of an evacuation. You can put your important documents into the box like your will, the other documents of your estate plan, social security cards, insurance policies, deeds, etc. all in one place and ready to go in the event of a storm. Many have locks and are even waterproof. Again, the most important concern is that your important people know your documents are in the lockbox, where the lockbox is located, and if there’s a key, how to find the key for the lockbox to get into it.

SAFEKEEPING AT THE COUNTY CLERK’S OFFICE

Every County Clerk’s office in Texas will accept wills for safekeeping for a nominal fee. This might bee good for someone who thinks an heir might tamper with their will. The program is set up so that the will can only be released to either the testator (the person who wrote the will) or the executor (the person appointed to probate the will). No other person. The disadvantage of the county clerk’s office is that historically speaking, county clerk offices are subject to all the same problems of being in the Gulf Coast and can be damaged during severe weather or fire.

CLEVER PLACES AROUND THE HOUSE

Every couple of years I hear from a client and they'll say that they heard they should keep their Will in the Freezer because that's the last place that will get destroyed in a fire. I also hear the same thing about money or other valuables being hidden in clever places around your house. Please don't make it hard for your heirs. Make sure they know where your Will and other important documents and property are before you pass. Otherwise, your heirs will be scrambling to find your will and it was under the frozen pizza all along.


BOTTOM LINE


Keep your will safe! Your lawyer needs your ORIGINAL WILL to submit to the probate courts, not a copy. Once you have decided where to store your will, let your important people know where it is kept and how to get it so that in the event they need to retrieve it, they won’t have any problems in the future!

If you have questions about Will storage and the probate process, contact CHIANG LAW FIRM PLLC for a consultation. We look forward to hearing from you.

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