Nonprobate property skips the probate process completely. The assets are transferred directly to the beneficiaries according to a contract or deed. The court doesn't have to approve nonprobate transfers.

Examples of nonprobate property include:

• Assets with Designated Beneficiaries. This can include life insurance, retirement accounts like 401(k) and IRAs, payable-on-death (POD) bank accounts, transfer-on-death deeds (TODDs), etc.
• Joint Ownership with Right of Survivorship. If property is jointly owned and the owners have signed a survivorship agreement, the surviving owner will automatically inherit the deceased owner's share. This is commonly done for marital homes. The right of survivorship agreement may be part of the deed or signed at a later time.
• Real Property with a Life Estate Deed. Life estate deeds like "Lady Bird deeds" allow a property owner to live on the property during their lifetime. They also give partial ownership to a designated person who gets full ownership after the original owner dies.
• Living Trusts. Assets held in a living trust pass directly to the beneficiaries named in the trust document, bypassing the probate process.

However, nonprobate assets aren't always fully protected. If probate assets aren't enough to cover the deceased person's debts, the estate executor may have to claim nonprobate assets to make up the difference. 

See our Transfer of Property After Death guide for more information about estate planning. 

Texas Law

Understanding the Law

After the owner dies, transferring nonprobate property is fairly simple. For personal property like bank accounts and investments, you'll need to contact the institution directly. They will likely ask you to fill out a claim, submit a copy of the death certificate, and verify your identity.

For nonprobate transfers of real estate, you'll need to go through the county clerk's office. You may have to submit a notarized affidavit of death, a copy of the death certificate, and other documents. This must be done in the county where the property is located.

Understanding the Law

If an ex-spouse is listed as a beneficiary on a nonprobate account, Texas law often nullifies the beneficiary designation. It means that the ex-spouse cannot inherit the property. There are some exceptions, such as when the designation is added after the divorce. This may include:

• payable-on-death accounts;
• revocable trusts;
• life insurance policies;
• retirement accounts;
• employer benefit plans; and
• certain financial plans.

However, federal law overrides state law when it comes to federally-supervised employee benefit plans. Accounts subject to the Employee Retirement Income Security Act of 1974 (ERISA) will be distributed to the listed beneficiary, regardless if the couple got divorced. ERISA accounts might include pensions, 401(k) accounts, employer-sponsored life insurance, etc. 

Specific terms of the divorce decree and community property laws may also affect the distribution of property.

The law for this subject can be complex. We recommend talking to an attorney to determine how it applies in a specific situation. 

Texas Law

Federal Law

Understanding the Law