Most real property needs to go thru probate in Texas if not in a Trust. An exception is if the folks held the title as Joint Tenants with Right of Survivorship, or as “survivorship community property”. Texas also allows Transfer on Death for real property. If any of these three apply, mom can probably avoid probate adn just get the house retitled, i.e., take Dad’s name off. Otherwise, if the house was in Dad’s name only, you will need to get down to Probate Court.
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Just talked to an attorney. I think my sibs will balk at his $5k fee. I need to find out how the deed is set up and whether there is a TOD. Or even if her name is on it as well. UGH. I hate this kind of stuff, especially when I will have to persuade others to do it. There def isn’t a trust.
Thanks, all.
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I am subject to the offset and windfall provisions of SS. My actual benefit from SS is reduced by about 2/3. I would have received a full benefit in the $600 a month range (I worked on SS jobs a long time ago when my earnings were either low, or I was working part time). My actual benefit is in the $250 a month range…all of which almost pays my Medicare costs (because we have a high IRRMA due to DHs income.
ETA…I have a state teachers retirement pension…no SS contributions for teachers in this state. In addition to the offset and windfall provisions…I can never collect SS on my husband’s earnings…which certainly would be much higher than my SS earnings!
Honestly…I never expected to collect on my husband’s earnings, but it does bother me that I am not collecting my full $600 or so SS benefit to which I contributed.
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Me too.
Be careful how the house transfer is handled. My in laws added my H to the deed for their cottage. MiL & H each own half now that FIL is gone, and it will be H’s automatically when MIL passes. However, if he sells, he has to pay capital gains on the difference between the price my in laws paid many years ago & the much higher price it would certainly fetch. Had he inherited it & then sold it, he would have owed taxes only on the difference between what it was worth on the day his mom dies & the selling price. For H, it made sense - it keeps taxes lower, and H doesn’t plan to sell. In other cases, the loss of the step-up basis would not be good. Talking to an attorney would be wise.
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On the phone, the lawyer said the part about the taxes and losing the homestead exemption if we start putting things in our names and bypassing my mom.
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I don’t know how it is in TX but I can’t imagine having to file all the paperwork myself. There were all kinds of things that had to be filed with the court, including some in person, and then a public period where people could make claims on the estate. The attorney had to issue us all kinds of documents for the bank as well.
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FYI, my neighbor texted back that she was wrong so I deleted that part of my post. She thought her sister did it herself, but she had a lawyer friend who helped.
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I guess there is a downside for people who aren’t carefully evaluating the implications. For me, this just means some additional work for my financial advisor.
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Probate is basically the validation of a will. I can only speak to PA but probate is necessary because 1. You need to be officially recognized as the executor or administrator (in the case of intestate) so you can 2. manage the estate and perform the necessary and required activitiesper the law and the terms of the will such as notifying beneficiaries, selling assets, paying debts, filing the inheritance tax return and so forth and 3. the probate court issues testamentary letters to the executor/administrator showing you have the authority to represent the estate in transactions and interactions with 3rd parties.
Probate is required for all estates in PA if the deceased owned any assets in their name, regardless of whether there is a will. That may not be the case in all states.
Maybe when people say avoid probate it’s a euphemism for avoiding estate taxes?
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Depends on the state laws but at a minimum you probably need to record something at the register/recorder of deeds that shows your father died (death certificate) and probably a confirmatory deed (or similar) that explains how your mom acquired title to the property if they didn’t own it jointly with a right of survivorship.
You want her to take title most likely because of the step up in basis that occurs each time a property passes through an inheritance.
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We will avoid probate in the case of our parents estates as the children own the houses they live in. For example, when my mother moved to AZ from MI, she sold her house there and moved in to a house here that my brother and I own jointly. Same with DH’s parents. Neither set of parents owns real estate in their own names, just easier this way.
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Estate taxes aren’t a thing in many states anymore. Eg California follows the Federal exemptions, so unless your estate is over $12 million, taxes don’t enter into the equation. I think people mainly want to avoid paying attorneys and dealing with family drama.
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Yep, I was worried until I learned it was $11 million for us. Sadly not a problem
; )
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I’v heard it in relation to privacy.
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Definitely that too.
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When she passed, my mom had several shares of one company’s stock in her individual name. All other non-retirement assets were held in name of family trust. Day I picked up my dad to take him to see his estate planning attorney to ask some questions in relation to my mom’s passing, my dad shows me a dividend check. He cannot remember what it is, how my mom obtained it, how many shares, account number, etc. That started a several month journey of trying to figure out what to do with those shares. Estate attorney prepared some type of quick probate motion that was entered signed and entered in a couple weeks. Unfortunately I calculated the number of shares my mom held for purposes of that motion based on rate of declared dividend. But they were withholding taxes from the dividends so the number of shares owned was actually higher. Needed to file an amended motion.
Transfer agent would only answer yes or no questions. Literally was asking him is the first number of the account 1? No, ok, is it 2? At some point he saw where it was going and just gave me the remaining numbers. Eventually got the shares into the family trust but it took a lot of time, effort and some attorney fees.
For the real estate in question, I would go with an attorney. Process will vary by state and you want someone who knows what they are doing. Real estate likely will be more involved than was a few shares of stock. But avoiding addressing the issue now may result in it being compounded when your mother passes. Costs of fixing it will only increase. And if you are looking to sell at some point, you won’t want clearing up title issues to hold up a closing.
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And probate in CA can take months just to get a court date, even for simple estate. (many state offices still WFH due to covid.)
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if folks had a trust, surprised they didn’t have a ‘pour-over’ will too. My mom had a similar thing with a few shares of stock that were not titled into the Trust, but just showed the transfer agent the pour-over will (which basically says anything we forgot to add to the Trust is hereby added to the trust) and they had no trouble selling the shares adn sending the a check for the balance. No attorney necessary in our case.
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Maybe it varies by state?
Can You Avoid Probate in Ohio? | Robbins, Kelly, Patterson & Tucker.