Many families lose a significant amount of wealth through inheritance traps. The lack of any estate planning is a common trap that causes many families to lose substantial wealth. However, the use of basic estate planning can save families significant wealth. More specifically, using non-probate assets can help families protect wealth.
What Are Non-Probate Assets?
Non-Probate Assets are assets that can be transferred without going through probate. Common examples of non-probate assets include bank accounts, retirement accounts, investment accounts and life insurance with designated beneficiaries. Accounts with rights of survivorship and life insurance with beneficiaries also transfer wealth outside of probate and are non-probate assets.
The Advantage of Non-Probate Assets
The advantage of non-probate assets are that they transfer wealth from person to person without going through probate court. For this reason, non-probate assets help individuals with small estates avoid the cost of probate. This technique saves families significant wealth.
Avoiding Inheritance Traps Through Non-Probate Assets Can Save Wealth in Small Estates
Many individuals fail to designate beneficiaries on their bank, retirement, and investment accounts. This failure causes the assets in these accounts to go into their estate upon death. Once in the estate, the asset requires probate to transfer the wealth back out of the estate.
Unfortunately, probating an estate often becomes non viable when accounts are small and the only asset in an estate. Further, when accounts are under $5,000.00 and/or there are other debts on the estate, the wealth often becomes trapped. Many heirs and beneficiaries discover after the loss of a loved one that small accounts are trapped.
Avoid This Inheritance Trap By Inventorying Accounts and Updating Beneficiaries
Families can save significant wealth and avoid inheritance traps by using non-probate assets. More specifically, individuals should update their designated beneficiary and right of survivorship on all accounts. Further, individuals should also keep an inventory of or communicate the existence of these accounts to the beneficiaries.
More Information on Texas Probate Law
For more information on Inheritance Traps and Texas Inheritance Law, please go to the following webpages Texas Family Inheritance Lawyer Information, Videos on Inheritance Traps, and Central Texas Real Property Probate Lawyer.