Other Common Estate Planning Questions

Q. My sole assets are a car, personal belongings and a savings account with less than $50,000 in it. Do I need a will?

A. You would think there's a simple yes or no answer to your question. But as with so many other legal questions, the answer is: maybe, maybe not.

With regard to your bank account, you can set it up so that it passes to one or more persons who are named as the beneficiaries. This type of account is normally called a "payable on death" or "transfer on death" account. Most, if not all, banks allow their customers to establish this type of account.

If the persons you have named are alive when you pass away, all they will need to do is present the bank with a death certificate, and they will be given the money. However, if you die without having named a beneficiary or if all of the beneficiaries you have named die before you, then some sort of probate will be needed.

In that situation, if you die without a will, your estate would probably be small enough to qualify as a small estate. That means the normal probate process could be simplified by filing a Small Estate Affidavit. The Affidavit will list the properties you owned, and it will state who your heirs are under Texas law. Once an order approving the Affidavit is signed by a judge, your heirs can claim the money by presenting a certified copy of the order to your bank.

If your estate does qualify as a small estate, but you have a will, then your heirs can't file a Small Estate Affidavit. Instead they must take the more expensive route of probating your will. So, depending on the expected size of your bank account, you may be doing your family a disservice by having a will. Wills that transfer property must be probated, and in nearly all situations, that means hiring a lawyer and paying court costs and other fees.

Also, a Small Estate Affidavit will not be available if your savings account contains more than $50,000 upon your death. In such a case, it would be necessary to conduct a formal probate at the courthouse, and having a will would make the probate process far simpler than not having one.

As far as your car is concerned, it can be transferred at death without the need for probate by completing a Form VTR-262 "Affidavit of Heirship for a Motor Vehicle." Your heirs can obtain this form at any county court annex or online at www.dot.state.tx.us. This Affidavit will establish that the car was owned by you, and the persons who inherit your estate will need to sign it. When completing the form, your heirs might also be asked to provide other documentation such as a certificate of title, release of lien, affidavit of physical inspection, bill of sale and/or proof of liability insurance.

The problem with letting your heirs simply use the VTR-262 form is that the car may not be passing to the person or persons you would want. For instance, if you have two children, but you want your car to go to only one of them, then you may want to execute a will which names the one child who will get the car.

Your personal property does not have title, so it's not necessary to probate a will in order to validly transfer ownership to your heirs. It's unfortunate, yet true, that personal belongings are available on a first come, first serve basis to your children, friends and neighbors. You may want to limit the number of people who have keys to your residence and also make a list of who gets what particular items. But don't forget, it's often a free-for-all following a person's death.

Note, however, that if you have minor children, my answer would be yes, you need a will. With a will, you could name guardians as well as a person to serve as trustee or custodian over the children's inheritance.

So, if you set your bank account up properly, if your car will be passing as you would want, and your beneficiaries are all adults, then you don't need a will. On the other hand, it can't hurt to have one just in case it's needed. Like I said: maybe, maybe not.