Joint Ownership in Probate
Feb. 17, 2023
When someone passes away, their assets must go through the process of probate. This process is designed to ensure that the deceased’s assets are passed on in accordance with their wishes. But what happens when two people own an asset jointly? In such cases, there can be some confusion as to how to handle jointly-owned assets in probate.
If you are looking for ways to avoid probate, it is vital to contact my office in Fort Worth or Corpus Christi, Texas, for legal guidance. At Russell Manning Attorney at Law, I serve clients in throughout the state, including Bee County, Nueces County, Jim Wells County, Victoria County, Kleberg County, Live Oak County, and Aransas County.
Probate in Texas
Probate is the legal process used to transfer a decedent’s property to their heirs upon death. The court must review all documents related to the estate before any transfers occur. Depending on the state, certain estates may go through an abbreviated probate process, while others may require full administration. In Texas, most estates do not require full administration—only those that have substantial non-probate assets or liabilities will need to go through this more extensive process that requires court approval.
What Is Joint Ownership?
Joint ownership refers to when two or more people each own a portion of an asset together. This may apply to real estate, investments, bank accounts, cars, and other items. Each person will typically have equal rights over the asset and will be able to make decisions about it independently from the other owner(s).
Do Jointly-Owned Assets Go Through Probate?
Jointly-owned assets that transfer to the surviving spouse do not require probate in Texas. These include bank accounts, real estate, stocks, bonds, vehicles, and other personal property owned jointly by the spouses. However, if there was an agreement between spouses that stated that these items would pass directly to someone else after one spouse passed away (known as “right of survivorship”), then it could be subject to probate depending on its value or complexity.
However, a jointly-owned asset will be subject to probate when the last co-owner dies unless other measures are taken to avoid probate.
Ways to Avoid Probate
Probate can be a lengthy and expensive process that most people want to avoid. Fortunately, there are several ways to do this:
Joint Ownership with a Right of Survivorship
With joint ownership, two or more people own property together with a right of survivorship. When one of the owners dies, their share of the property automatically passes to the surviving owners. This means that when one owner dies, their share does not have to go through probate in order to be transferred to the other owners.
Revocable Living Trusts
A revocable living trust is an arrangement in which a trustee holds title to your property for your benefit during your lifetime and then transfers it directly to your beneficiaries after you die without having to go through probate court. The trust document sets out all of your instructions regarding how the trust assets should be managed and distributed after your death.
Transfer on Death Deeds
A transfer on death deed (TODD) is an instrument used in some states that allows real estate owners to pass their real estate directly to their designated beneficiaries upon their death without going through probate court. The deed must meet certain requirements in order for it to be valid.
Beneficiary designations are used for many types of accounts, including retirement accounts, life insurance policies, bank accounts, and annuities, that allow an individual’s account beneficiary designation form to specify who will receive those assets upon their death without going through probate court proceedings. It is important for each account holder to keep these forms up-to-date because if any changes occur during his/her lifetime (such as marriage or divorce), those changes must be reflected on these forms in order for them to remain valid at the time of death.
Each of these methods involves a great deal of paperwork and procedural requirements that must be met. If you are looking for ways to avoid probate, it is essential to hire a skilled estate planning attorney to assist you with the process.
Seek Experienced Legal Counsel
Probate court proceedings can be lengthy and expensive processes which most people want to avoid – and so should you. One of the possible ways to avoid probate is by taking title as a joint owner with another person. If you want to explore your options to avoid probate further, schedule a consultation with me. At Russell Manning Attorney at Law, I provide knowledgeable legal counsel to clients in Corpus Christi, Texas, and surrounding areas.