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San Antonio Probate, San Antonio Estate Planning, San Antonio Elder Law


San Antonio Express-News,  1/30/98

Do Mid-size Estates always Avoid Probate?

© 1989-2004, Paul Premack


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Dear Mr. Premack: I have been told that when a person has less than $300,000 on her death, her Will does not have to go to probate. My total assets are under $200,000. I leave everything to my children in my Will, and I am a widow. My question: does my Will have to go through probate when I die? – E.S.

The asset limit you mention does NOT have a bearing on whether your estate goes through probate. Probate is triggered by what you own and how you own it. The total asset value of your estate is vitally important, but for a different reason: estate taxes. Your informant may have confused estate taxes with probate.

Probate and estate taxes seem to walk hand-in-hand, but they are not the same thing. While any estate valued at less than $625,000 does not have to pay estate taxes, there are no dollar limits on what type of estate goes through probate. It is true that any estate below the tax-free limit (which was $600,000 in 1997 – half of which is $300,000) does not pay estate tax.

Probate is another story. Probate is the legal process of administering a decedent's estate. It exists to protect your heirs and your creditors, and to ensure that your wishes are followed after you die. There are several legal procedures, ranging from extremely complex to fairly simple, that are all labeled "probate."

Any size estate can avoid probate with proper advance planning. There are three basic techniques: a) die without assets; b) use survivorship rights, or c) use a trust.

Your estate may be the type where survivorship arrangements would be useful. Your $200,000 probably consists of a house, some bank accounts and a few investments. Since you want your kids to share the estate when you die, you could name them as "joint tenants with rights of survivorship" or as "pay-on-death" beneficiaries of your investments. Your legal advisor can give you specific tasks needed to rearrange the assets.

The house could be set up with survivorship rights or with a "life estate." Life estate means that you own the right to use and enjoy the house while you are alive, but when you die the kids automatically own it. Probate is not necessary because title is conveyed by the existing deed.

Trusts are usually used with estates larger than yours. A trust offers maximum flexibility; you can avoid both probate and estate taxes when the trust is written to include a "by-pass" provision. Having a large estate is not a requirement for use of a trust. If you want your moderately sized estate to pass to very young heirs, or to heirs who have no management skills, then a trust may serve you well – no matter what the size of your estate is.

The bottom line: probate is a useful and important legal process. Even so, not all estates have to go through probate. Advance planning with your attorney and financial consultant are the key if you want your estate to stay out of probate.

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Disclaimer: This column answers a specific legal question offered by an individual in the South Texas area. The answer may or may not match your individual situation. Be careful not to treat this column as specific legal advice that meets your individual needs. It may give you a solid basis for discussion with your own attorney. Also, please be aware that laws change. You should consult with your personal attorney before you take any action on this or any legal issue.



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