For many in Texas, handling matters related to handing down wealth to loved ones can be a complicated affair. One way that many seek to simplify the issue is through the use of beneficiary designations during estate planning. By designating a person as a beneficiary, the assets held within an account can pass directly to the named individual at the time of death of the account holder.
That empowers an individual to list different beneficiaries for different accounts. One can have a daughter inherit an investment account, while a niece may be given the contents of a savings account. When the time comes, those individuals will have almost instant access to the assets, instead of having to go through the probate process.
A problem can arise, however, when the named beneficiary predeceases the account holder. If the beneficiary information is not changed, or when there was no contingent or successor beneficiary was named, then the assets can go into the larger estate, to be distributed during probate. In some cases, heirs may disagree on how to distribute those assets.
The best way to avoid probate litigation is to make a periodic review of all accounts that have a named beneficiary, and to make changes where necessary. Many Texas families might also want to name successor beneficiaries to all accounts, which adds an additional layer of protection. As with all estate planning matters, it is important to discuss these decisions with the individuals who will be affected when the time comes.
Source: urologytimes.modernmedicine.com, "Estate planning: Don't make these mistakes", Joel M. Blau and Ronald J. Paprocki, Dec. 1, 2016