Welcome to the Houston Lawyer Referral Service Legal Video Series. Your trusted source for clear, practical legal information designed to help families navigate important decisions with confidence. In this video, we’ll discuss some of the most effective ways to make the transfer of some of your assets from your estate as easy and cost-effective as possible with our Harris County Public Probate Administrator, Brandon Koffield.
Thank you so much for being here again, Brandon, and doing this probate video series. We really appreciate it. They’ve been very informative. We want to now talk about some things that people can do ahead of time before they’re passing so that everything is cost-effective and easy as possible. So how can someone make things more cost-effective and easy as possible before they pass?
Everybody asks the number one question, how do I avoid probate? You can and you can’t, but you can. The most important thing is, as I mentioned before, only the things that are in your estate when you pass are things that have to go through probate. I had a case before where the person technically had, when they passed, a little over a million dollars, but because they had pay on death, PODs, or designated beneficiaries on accounts, all of those things were contracted to go to those people automatically. So that wasn’t a part of their estate. They had a transfer on death deed, which was listed with the property. So all the heir or the beneficiary had to do was inform the county with an affidavit of death saying this person is now deceased. That deed that they already filed with the county becomes immediately valid. They don’t have to worry about the house anymore. That’s not a part of the estate.
The only thing they had left was a small checking account that didn’t have any beneficiary listed on there. That was the only thing that was left. Generally speaking, even when you have things like a vehicle, you can do a similar process like a transfer on death deed through the Department of Motor Vehicles that allows you to say, “Here’s who I want my vehicle to go to when I pass.” You can do a lot of planning to make life a lot easier for your heirs down the road. All they have to do is notify the bank that this person is deceased, notify the county that this person is deceased, notify the county that this person is deceased, notify the Department of Public Safety and DMV that this person is deceased. A lot of these things that they put in place will automatically trigger so they don’t have to worry about the cost of going through probate if they go through these steps today. Planning is very, very helpful and important to avoid a lot of the headaches that people deal with.
That’s extremely good information. Can we talk about the payable upon death for a minute? Is this just for banking accounts, or how about if you have an investment account or a 401k?
Absolutely.
Or a pension.
Pretty much anytime there is a bank account, a 401k, or a pension, there is generally going to be an opportunity to list a designated beneficiary. What that does is it sets up a contract between you and that institution to say when I pass, give this to this person. That’s why it moves outside of the probate process. One thing to be aware of is checking with your financial institution about how your bank account is set up. A lot of times people will have their own bank account and as they age they’ll add a child to that account. You can add someone as an authorized user, a joint owner, or a joint tenant with a right of survivorship. Each one of those is very different. This is the reason why it’s important to not only talk to an attorney but to talk to your financial institution. If someone is just added as a joint tenant, if you think of this as the bank account as a whole, you add someone on there, they’re entitled to half. You’re entitled to half. So if you pass, half of that account goes to your estate. But if there’s a right or survivorship on that, whoever lives longer gets everything that’s in there.
So, if you’re thinking it’ll just be easier, but you weren’t necessarily intending to give all of your bank account to one kid who happens to be the one helping out, then you don’t want to take that step of doing a joint tenant with a right of survivorship on that bank account. So, it’s like those small things that can have a big impact, especially when you’re looking at home health care facilities and there’s been a lot of fraud in that space, unfortunately, where people like, “Yeah, just add me to the account because it’s going to be easier with taking care of your loved one.” And then at the end of the day, the bank is like, well, we’re contracted to give them everything. That might not be what the family was trying to do. So, very important. It’s awesome and it’s great to do the pay on death and have the designated beneficiaries, but also make sure, just check and make sure what type of account it is so you know exactly what you’re doing.
From my understanding, your financial institution should be able to explain which options are available and how they work.
Yes, absolutely. When you create an account or add someone to an account, it gives a lot of paperwork, and a lot of times people don’t even read the paperwork. But just double check and make sure, like, hey, am I adding someone just for the authority to make deposits or charges? Am I adding someone so they co-own this? Am I adding someone so that whoever passes is going to take the whole thing? So whoever passes first, the survivor gets to keep everything. Any financial institution will know exactly what they have set you up in and what you’ve signed to, but it should also be in your paperwork for whatever you created that account.
So I know a lot of people are very efficient. They want to plan ahead and get the payable upon death on all their accounts, payable upon death for their checking and savings accounts, beneficiaries listed properly for their investment accounts and pensions, and things of that nature. They have the TODD set up to make sure their house goes to whoever they want it to go to. And then, of course, they go to the DMV and have their vehicles set up to go to whoever they want to leave them to. And then they think, well, I really don’t have anything else. Why do I need a will?
There are a couple things, and this is for me a case of better safe than sorry. If you think of an example of something that could happen in life, maybe the day before you pass, you inherit or you hit the lotto, $100 million, and you just got that check and it didn’t get deposited yet. There’s a check in your name, and where is it supposed to go? It didn’t make it to an account that already had a designation on there. Or, maybe you find a duffel bag of cash. You’re like, now what? So having something, even just a simple will that says, like I said, having a residuary clause, anything that I didn’t list in here, anything else in my estate at my passing goes to this person, that still will be probated. That still will allow that individual to get the letters testamentary and the authority to sign if they need to open an estate bank account or deposit a check. So it’s very important to do that. And it’s also important, in my opinion, especially to have someone in charge of an estate because you never know what’s out there.
One of the things we have is claimittexas.gov, which is our unclaimed property. The amount of things that are on there is surprising. I think I still have some random rebates from AT&T Universe. I returned the box years ago, and they sent a check to an address before I left for college, and I never got that check, but it’s like $63 in there. It’s a public site, and you can type in your name to see that.
But you’re still going to need to take steps to establish that you’re an heir for that person that’s deceased. And I think people forget that if there’s a single person in a generation that’s still living and they inherit, then everybody in that generation inherits. So even if your parent passes but your uncle is still alive, if they are the heirs, your parent is one of the heirs, then they are still going to be able to inherit a portion of that piece.
You just never know what’s going to happen in the future. To the extent that it’s best to have a will or to administer an estate if you have the means to do that, you just never know. There might be a check out there somewhere or a check coming later.
So what I’m hearing, Brandon, is people really need to make sure they have payable upon death beneficiaries signed with all of their financial accounts. They need to have a transfer on death deed on all their real property.
I think it’s the cheapest, best way to go about doing that because that’s a $39 to $43, maybe $47 filing that you can do without an attorney on the real property records with the county clerk’s office, as opposed to having to wait to figure out who’s going to get the house by going through the whole estate administration process or the probate process.
And go to the DMV. I believe it’s as easy as downloading a document, filling that out, and making an appointment so both parties can go together for all their vehicles. Maybe keeping these things up to date.
Yes, it’s important to keep things up to date, and I think it’s important to communicate across the board, no matter what it is in the probate process. If you have a tax deferral on your home, like an over-65 deferral, yes, you own this property, but whoever inherits it needs to know that you haven’t been paying taxes and those taxes will be due in the future. It’s unfortunate when people say they didn’t even think about taxes being due because the house has been in the family for generations. But, a lot of times seniors are on fixed incomes. The reason we have the policy to pay later is so seniors are not stuck between eating and paying taxes.
Those are the types of things that, if you communicate what’s going on, make it a lot easier. Let people know you have a will and where that will is. If you have a storage unit with family heirlooms, make sure that’s written down so it doesn’t go unpaid and end up in storage wars. These things can be figured out by communicating. As cool as the movies are where everyone comes into a room and nobody knows who gets what, that’s usually not how it happens. Communicate in advance so people aren’t fighting. Everybody knows what the wishes are. It’s much easier.
Yes. In so many different ways. Financially, emotionally, and of course, have a will. We want payable upon death, transfer on death deeds for real property, and beneficiaries for vehicles. Check those things regularly and make sure they are up to date because someone may pass and you want to make sure you’re leaving things to someone who is still with us. And of course, having a will.
Yeah. Just a catchall. Just in case you forgot anything. At minimum, have a will.
If someone needs to plan for their passing, where can they find a reputable attorney?
There are a lot of attorneys out there, and they are not all created equally. One of the best sources is the Houston Bar Association and the Houston Lawyer Referral Service. It’s a great place to find information and attorneys who know what they’re doing. Law doesn’t require specialization like medicine. Someone can decide to take a probate case without understanding the nuances or the soft skills required to deal with grieving families. Referral services help ensure attorneys are vetted and provide accountability. It’s a good real-world solution for everyday people.
You could not have stated that better myself, Brandon. If you need a lawyer, give us a call at the Houston Lawyer Referral Service. We are here to help. And again, Brandon, thank you so much for this video series. If anyone has questions they want Brandon to answer, please email those to us at info@hlrs.org. The information will be on the screen, and we would love to do another video series.
Absolutely.