How Does the Small Estate Process Work in Texas?

Q: Do beneficiaries have to pay taxes on annuities?

Generally, beneficiaries do not pay taxes on the death benefit of an annuity if it is received as a lump sum. However, if the annuity has appreciated in value, the taxable portion may be subject to income tax. It's advisable to consult a tax professional for specific guidance based on individual circumstances.

Q: Do inherited annuities go through probate?

Inherited annuities typically do not go through probate if a beneficiary is named. The benefits are paid directly to the beneficiary outside of the estate. However, if no beneficiary is designated, the annuity may become part of the estate and could be subject to probate. Review the annuity contract for specific details.

Q: Who receives the death benefit of an annuity?

The death benefit of an annuity is paid to the designated beneficiary named in the contract. If the primary beneficiary is deceased, the contingent beneficiary, if named, will receive the benefit. If no beneficiaries are listed, the benefit may go to the deceased's estate and could be subject to probate.

Full question:

Both parents recently died leaving a small estate of about $400,000 including their home of 60 years. Their CDs, bonds, and annuities are payable directly to my sister and I as beneficiaries. The only things left to sell are the house and car. Can this be done withoutspending a fortune probate the will? Someone told me there is something called a writ of heirship that can avoid the probate process.

Category: Wills and Estates
Subcategory: Small Estates
Date: 04/07/2025
State: Texas

Answer:

In Texas, where the value of the entire assets of the estate, not including homestead and exempt property, does not exceed $50,000, a small estate may be administered by a small estate affidavit. After the affidavit has been approved by the court, the affidavit may be used to collect debts owed to the decedent.

The affidavit is filed with the clerk of the court in the county where the deceased resided. It lists certain information required by statutes, such as all of the known assets and liabilities of the estate, the names and addresses of the distributees, and the relevant family history or other facts concerning heirship that show the distributees' rights to receive the money or property of the estate. Please see the information at the link below for statutes and specific requirements. A link to an heirship affidavit has also been provided.

Once approved by the court, the affidavit may be presented to those who owe debts to the deceased in order to collect the property or money owed.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What happens if the beneficiary of an annuity dies after death?

If a beneficiary of an annuity dies after the annuitant, the death benefit typically passes to the contingent beneficiary, if one is named. If no contingent beneficiary exists, the benefit may become part of the deceased beneficiary's estate and could be subject to probate. It's important to review the specific terms of the annuity contract for details on how benefits are distributed.

What happens if the beneficiary of an annuity dies during?

If a beneficiary dies while the annuitant is still alive, the annuity contract usually allows for a contingent beneficiary to receive the death benefit. If there is no contingent beneficiary, the benefit may go to the deceased beneficiary's estate, which could involve probate. Always check the annuity's terms for specific provisions.

Do beneficiaries have to pay taxes on annuities?

Do inherited annuities go through probate?

How are assets transferred from a deceased estate?

Assets from a deceased estate are transferred according to the will or state intestacy laws if there is no will. This process often involves probate, where the court validates the will and oversees the distribution of assets to beneficiaries. In Texas, small estates may qualify for simplified procedures, such as a small estate affidavit, to avoid formal probate.