What Assets Have to Go Through Probate in Texas?

After someone dies, families often assume that everything the person owned has to go through probate.

That is not how probate works in Texas.

Some assets are part of the probate estate. Others pass directly to a beneficiary or surviving owner because of the way the asset is titled or because the owner made a beneficiary designation during life.

The important question is not simply what did the person own?

It is also how was each asset owned, and was anyone designated to receive it at death?

Understanding that distinction is one of the first steps in determining whether probate in Texas is necessary and what property needs to be addressed through the probate process.

What Is a Probate Asset in Texas?

A probate asset is generally property that belonged to the deceased person and does not have another legally effective method of transferring to someone else at death.

These assets become part of the probate estate and are distributed according to the deceased person’s will or, when there is no valid will, according to Texas intestacy law.

Whether an asset is a probate asset depends on how ownership and beneficiary arrangements were established before death.

Two people can own the same type of asset, such as a bank account, and have completely different probate results because their accounts were structured differently.

What Types of Assets Commonly Go Through Probate?

Assets that commonly become part of a Texas probate estate include property owned solely by the deceased person without an effective beneficiary or survivorship arrangement.

Examples can include:

• Bank accounts held solely in the deceased person’s name without a payable-on-death beneficiary
• Real estate titled in the deceased person’s name without an effective method of transferring the owner’s interest at death
• Vehicles owned by the deceased person
• Personal property such as furniture, jewelry, collectibles, and household belongings
• Business interests owned by the deceased person when no other transfer arrangement controls
• Money owed to the deceased person
• Other individually owned property that does not pass through a beneficiary designation, survivorship agreement, or other nonprobate transfer

The specific assets involved determine what must be addressed during administration of the estate.

What Assets Usually Pass Outside Probate?

Some property transfers because of arrangements made before the owner’s death rather than through the terms of a will or Texas intestacy law.

Texas Estates Code Chapter 111 recognizes several types of nonprobate transfers.

These can include assets with:

• Payable-on-death designations
• Transfer-on-death designations
• Valid rights of survivorship
• Beneficiary designations
• Certain contractual arrangements providing for payment at death

When a valid nonprobate arrangement applies, the asset generally passes according to that arrangement rather than through the probate estate.

This is why looking only at the will does not provide a complete picture of what happens to someone’s property after death.

Do Bank Accounts Have to Go Through Probate?

It depends on how the account was established.

A bank account held solely in the deceased person’s name without an effective payable-on-death beneficiary or survivorship arrangement can be a probate asset.

A valid payable-on-death designation can allow the funds to pass directly to the named beneficiary.

Joint ownership also requires closer examination.

Simply seeing two names on an account does not always answer what happens after one owner dies. The account agreement and the type of ownership arrangement matter.

Families should not assume that access to an account during someone’s lifetime means the same person automatically owns the money after death.

Does a House Have to Go Through Probate in Texas?

Real estate is one of the most common reasons families encounter probate.

Whether a house must be addressed through probate depends on how the property was owned and whether an effective nonprobate transfer applies.

If the deceased person owned an interest in real estate that does not pass through another legally effective transfer mechanism, that ownership interest becomes part of the estate that must be addressed after death.

The existence of a will does not, by itself, change the property’s title immediately upon death in a way that allows someone to simply sign documents on behalf of the deceased owner.

When a family needs to sell, transfer, or otherwise deal with the property, establishing ownership and legal authority becomes particularly important.

Do Life Insurance Proceeds Go Through Probate?

Life insurance with a valid living beneficiary generally passes directly to the named beneficiary rather than through the probate estate.

The insurance company pays the proceeds according to the beneficiary designation.

A different result can occur when there is no effective beneficiary designation or when the estate itself is the beneficiary.

This illustrates an important principle:

A will generally does not override a valid beneficiary designation simply because the will says something different about who should receive property.

The transfer mechanism associated with the particular asset matters.

Do Retirement Accounts Go Through Probate?

Retirement accounts such as IRAs and employer-sponsored retirement plans generally pass according to their beneficiary designations when a valid beneficiary survives the account owner.

Those assets ordinarily do not become probate assets simply because the deceased person also had a will.

If there is no effective beneficiary designation, however, the governing plan documents and applicable law determine what happens next.

Families should therefore examine the beneficiary information for the specific account rather than assuming that every financial asset is controlled by the will.

Does Jointly Owned Property Avoid Probate?

Not necessarily.

The words joint owner do not automatically mean that the surviving owner receives the deceased owner’s interest.

Whether property passes to the surviving owner depends on the type of property and the legal arrangement governing ownership.

A valid right of survivorship can allow property to pass outside probate.

Without an effective survivorship arrangement, the deceased person’s ownership interest can still need to be addressed as part of the estate.

This is especially important with bank accounts and real estate, where families sometimes assume that having more than one name associated with the property automatically avoids probate.

What I Commonly See When Families Are Trying to Determine Whether Probate Is Necessary

Families often begin with the will.

They find the document, read who is supposed to inherit, and assume that tells them whether probate is needed.

But the will is only part of the analysis.

I want to know what the person actually owned.

Was there a house?

Whose name is on the deed?

Were there bank accounts?

Did those accounts have payable-on-death beneficiaries?

Were there retirement accounts or life insurance policies?

How were those beneficiary designations completed?

The answers can produce a very different picture from what the family expected.

Sometimes a person leaves a will but owns very little that actually needs to pass through probate.

In another estate, the family may have several assets that cannot be dealt with until the appropriate probate process is completed.

That is why determining whether probate is necessary starts with the assets, not simply with the existence of a will.

Can Someone Have Both Probate and Nonprobate Assets?

Yes.

This is extremely common.

A person might die owning a house that needs to be addressed through the probate estate while also having a life insurance policy that pays directly to a beneficiary.

The same person might have a bank account without a beneficiary and a retirement account with a valid beneficiary designation.

Those assets do not all follow the same path simply because they belonged to the same person.

Each asset must be evaluated based on its ownership and transfer arrangement.

What This Means for Your Family

Determining whether probate is necessary requires more than making a list of what your loved one owned.

You also need to understand how those assets were owned and whether an effective beneficiary, survivorship, or other nonprobate transfer arrangement applies.

Some assets pass directly to another person.

Others must be addressed through the estate.

And a single estate can contain both.

Before assuming that probate is required, or that it can be avoided, the assets should be evaluated individually.

Conclusion

Not every asset a person owns has to go through probate in Texas.

Property with a valid beneficiary designation, payable-on-death arrangement, right of survivorship, or another effective nonprobate transfer can pass outside the probate estate.

Other property must be addressed through the appropriate estate process.

The Blacknall Firm assists Texas families with uncontested probate matters and determining the appropriate process for administering a loved one’s estate.

If a loved one has died and you are unsure whether their assets require probate, Schedule a consultation with The Blacknall Firm to discuss the estate and determine the appropriate next step.