Welcome to Texas! We are thrilled to have you here, and hope that you plan to stay for a very long time.
As you will learn, Texas is a wonderful place to live and die. That “dying” part may need a bit of explanation.
We have some very good laws regarding the estates of Texas residents. To take full advantage of them, you should switch over to documents that incorporate those laws. For example, you may have come here already armed with estate planning documents from another state. If you came from somewhere like California or New Jersey, you probably also have a trust that holds most of your assets. That trust was most likely set up to protect your estate from an expensive and protracted probate and from estate or inheritance taxes.
We have great news for you.
Texas does not have an estate or inheritance tax. There is a federal estate tax, but the 2018 combined estate and gift tax exemption is approximately $11.2 million per person, or $22.4 million per married couple. That means that for most Texas residents, death is not a taxable event.
Texas also has an incredibly friendly probate system. In your will you can designate someone to serve as an independent executor without bond. This sets the stage for a streamlined probate – from start to finish, the executor only has three touches with the court. The first is filing the application for probate, the second is a brief hearing to prove-up the will and get appointed, and the third is filing an inventory or affidavit with the court. Unlike most other states, Texas does not require the executor to file a bond or get court permission to settle claims or distribute assets. Better yet, most attorneys charge a flat fee to handle the probate, and that fee is completely unrelated to the size of the probate estate.
You may even be able to streamline your assets to avoid probate all together. Over the last 10 years, Texas has been proceeding down a path to make post-death asset transfers beneficiary-driven. You can now name a beneficiary for your vehicle. You can name a beneficiary for your investment and bank accounts. You can even transfer real estate directly to a named beneficiary by a Transfer on Death deed. An asset with a specific beneficiary designation does not go through your probate estate.
All of this means that you probably don’t need that expensive and cumbersome trust that you brought with you.
It gets better. Texas has specific forms for financial power of attorney, medical power of attorney, living will (known as directive to physicians), designation of guardian and designation of burial agent. The laws clarify the authority and liability of an agent, the extent of an agent’s powers, who has to accept the documents, methods to revoke the documents, and remedies for abuse of the documents.
So visit a Texas attorney and get the right documents in place. And, once again, welcome to Texas!
Hammerle Finley Law Firm. Give us a call. We can help.
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The information contained in this article is general information only and does not constitute legal advice.