What are TikTok influencers and Instagram lawyers not telling you about probates and trusts?
Unfortunately, much of what is being share on social media platforms about wills, trusts, and probate is not accurate. Whether the person sharing the information is not familiar with Texas law, does not have a background in law, or otherwise shares information that only fits a very specific set of circumstances, we see more and more that people don’t realize they have taken the wrong steps after it’s too late to fix undo those steps. Before trusting a non-attorney or using online forms for your planning needs, we want to share some of the common misconceptions we see on a regular basis:
“Everyone needs a trust, it keeps you out of probate.” False. While trusts can be helpful to families who exceed the estate tax caps (meaning, you have tens of millions of dollars that will be passing at your death) or families that have special-needs beneficiaries, most people do not need a trust. A generic trust can actually lead to litigation upon someone’s passing, and a poorly written trust will absolutely leave a family in peril–and trusts are not guaranteed to keep the estate out of probate. Many times, trusts are sold to blended families as a way to ensure some kind of fairness for step-siblings, but this is not always correct. If the children do not have a solid relationship with their stepparent, then there will likely be litigation upon the passing of the first parent. Suddenly, a stepchild wants to micromanage every cent used by the stepparent, as the stepchild becomes more concerned about his or her inheritance than the ability of the stepparent to live out their days. Or, a stepparent who suddenly decides their biological children should be receiving more from the trust than a stepchild starts issuing distributions that leads to unfairness and litigation.
– – –
“Probate is horribly expensive and takes forever.” False. If you plan now with an attorney drafting a proper Last Will & Testament, that includes valid self-proving affidavits, then you can almost guarantee a quick turn around from filing the application to probate the Will with appointment of an Independent Executor. Where does probate of a will or administration of an intestate (no will) estate become tricky? If the Will doesn’t have all required language, proper witnesses on the self-proving affidavit, or is contradictory, there will be more hurdles. If your loved one dies without a Will, all potential heirs must agree to an independent administration; an independent administration may not be allowed if there are minor beneficiaries; if a party challenges the executor named in the Will as a bad actor.
– – –
“Doing your own will online is easy.” False. Not only do online form builders fail to stay up to date with changes in Texas law, the questions can be confusing and prompts can be vague. People inadvertently disinherit their spouses because they presume the spouse automatically takes–and this is not the case. Other times, people give away more than 100% of their estate, and a contest is created as to who gets what. Or, someone starts giving away personal items during their lifetimes that were listed to go to someone else in the Will. If your Will transfers assets to a trust upon your death, did you make sure to fund the trust prior to your death?
– – –
“You can leave everything to a trust using beneficiary designations to avoid probate.” Potentially. If you create AND fund a trust during your lifetime, then you have some ability to name that trust as your pay-on-death beneficiary for certain types of accounts. But beware: if you do not do this exactly right, the trust designation will be ignored, and the funds will have to be handled through a probate estate. If you thought you had done this correctly so didn’t think a Will was needed, your loved ones are facing a situation of having to open a probate/administration and determining heirs, where the account funds will be split based upon the heirship determination. Where does this get challenging? Say you wanted two particular people to receive life insurance.
– – –
“You don’t have much, you don’t need a Will.” False. Everyone should have a Will. You never know what issues could arise when you pass away and do not want to leave your loved ones scrambling to put together pieces of your life. Many financial institutions will not accept things like affidavits of heirship, small estate affidavits, or even a muniment of title to release funds, so money will have to be paid to get the money released.
– – –
“Payable-on-death accounts are 100% protected.” Not always. Texas allows for specific debts to take priority over a payable on death beneficiary. For example, child support arrearages reduced to a judgment before someone’s passing can cause funds from a POD account to be brought into an Estate to satisfy the judgment.
– – –
