What Happens to Debts During Probate?
When your loved one passes away, their estate goes into probate, where debts must be dealt with. Talk to an El Paso estate planning attorney if you want to minimize the effect that probate can have on your loved ones.
What Happens to Debts During Probate?
Debts Are Handled First
A deceased person’s debts do not disappear. Instead, the estate becomes responsible for paying them using the assets left behind. The personal representative of the estate has the responsibility to collect assets, review all claims of debt, and finally use the assets to settle every valid debt before sending anything on to the heirs.
Notifying Creditors Is Required
Once probate opens, the personal representative must notify all known creditors and publish a notice in the local newspaper to ensure any unknown creditors have a chance to make a claim. Creditors then have a limited window to file a formal claim against the estate.
Claims Must Be Reviewed and Approved
Not every bill that arrives after death qualifies as a valid debt. A good representative will examine every claim to make sure it’s valid, properly documented, and timely.
There’s an Order to Paying Debts
Texas law requires debts to be paid according to a strict priority list. Class 1 debts are reasonable funeral expenses and last-illness medical costs. These get paid first. Class 2 debts are the costs of administering the estate itself and are paid next. Later classes cover secured debts, taxes, and finally unsecured claims, like credit cards.
Insights from an El Paso Estate Planning Attorney
What About Community Marital Property?
Debts incurred during marriage are only to be paid out of the deceased spouse’s half of the community property in some cases, but in others, the entire community estate can be reached into to pay them. A lawyer can tell you more about your situation. A spouse is never responsible for a deceased’s separate debts unless they co-signed the debt.
Is Anything Exempt From Debt Collection?
Certain assets never go toward unsecured debts during probate. Your family home and up to $100,000 in personal items like furniture, clothing, and specific vehicles are safe. The court can also set aside a family allowance for the surviving spouse and minor children for up to a year.
What Happens When the Estate Lacks Enough Assets to Cover Debt?
If the estate turns out to be insolvent, higher-priority debts still get paid first until the money runs out. Lower-priority creditors receive nothing or only pennies on the dollar.
Can You Avoid the Process Altogether for Some Assets?
Life insurance with a named beneficiary, retirement accounts with designated heirs, and jointly owned property with right of survivorship typically pass to their beneficiaries outside probate and thus can’t be taken by creditors. You can also set up trusts that will offer some protection against probate.
If probate and debts feel overwhelming right now, talk to us at Townsend Allala Coulter & Kludt in El Paso today. We can help you set up your estate to protect your assets and your loved ones. We serve clients throughout El Paso County, Midland, Odessa, and West Texas, as well as Santa Teresa and Las Cruces, New Mexico.
How Do You Create a Plan for Incapacity?
None of us like to think of a time when we won’t be able to make decisions for ourselves. But planning now for the possibility of incapacity is actually a way of retaining your autonomy and always have the final say in your own life. An elder law attorney here in El Paso, TX can help you take full advantage of all the tools available in Texas to plan for every possibility.
Creating a Plan for Incapacity
Talk to an Elder Law Attorney in El Paso, TX
There are many pieces to this puzzle. You want to have health directives and someone you can trust nominated to make health decisions for you, but you may also need a separate person to manage your estate, and for your estate to be set up in such a way that you can be taken care of in the event of a long-term incapacity. A lawyer will know all the tools available and how best to use each in your unique estate and family situation.
Fill Out a Directive to Physicians
This document lays out exactly what you want your doctor to do or not do in your treatment if you are unable to communicate for yourself. You can direct for life-extending care to be given or withheld under certain situations and can designate people to make decisions for you if you don’t have a Medical Power of Attorney and can’t make your wishes known.
Appoint a Medical Power of Attorney
This is someone you trust who you choose to make decisions on your behalf if you’re not able to. Their power to do this only activates when you no longer can make decisions. For example, say you were to come into the ER in a coma and unable to communicate: your medical POA could be contacted immediately to tell the doctors what to do on your behalf.
Appoint a Durable Power of Attorney
This gives someone the power to manage your estate while you’re incapacitated. They can access your accounts, pay your bills, deal with your business or real estate matters, or anything else you wish. You can make their powers as narrow or broad as you like, but this should obviously be someone you trust completely.
Nominate a Guardian for Minors
If you still have minor children, this declaration allows you to decide who will be their guardian if you become incapacitated. If you don’t nominate someone, the court may nominate anyone it sees fit in the event your children need a guardian, so for peace of mind, it’s best to have this document in place until all your children have reached the age of 18.
There are more tools that could be useful to you, from trusts and direct-designation financial accounts to a properly written will. Your attorney will be able to recommend the right things for your situation. To learn more, visit Townsend Allala Coulter & Kludt in El Paso today or call us at 915-533-0007.
What Should You Know About Contesting a Will?
You want your loved one’s last wishes to be honored, and if they’re not, then you may need to contest a will that is fraudulent or in some other way invalidated. A probate attorney in El Paso, TX can help you determine if you have grounds for a contest and guide you through the process of doing so.
What to Know About Contesting a Will
You Must Have Standing
Only those who have an interest in the will are permitted to bring a contest. The interested parties are:
- Anyone named in the will (a beneficiary)
- Anyone who would inherit if there were no will (the “natural” heirs)
- Any creditors
- Anyone with a legal contractual relationship to the deceased (for instance, a common-law spouse)
If you’re not in the categories named above, you can’t bring a contest under Texas law.
You Must Have Cause
The next thing to know is that you must have what Texas considers a valid reason to bring a contest. No one can contest a will just because they don’t like it, think it’s unfair, or don’t like that someone who benefits by it. Valid causes include:
Fraud
Do you think someone switched pages on your loved one as they were signing or after the signature went on a final page? Do you think the entire will is a forgery? This is grounds for a contest.
Coercion
Did someone manipulate or threaten your loved one into signing something they otherwise wouldn’t have? This isn’t unheard of: sometimes caregivers withhold pain medication or otherwise use their power to force someone into including them in a will, increasing their share, or disinheriting others.
Invalid
Was the will executed entirely according to Texas law? If something about it doesn’t follow the rules, then the will may be totally invalid. Handwritten wills, known as holographic wills, are valid in Texas, but they have to follow strict rules and be legible.
Not the Only One
If there’s more than one will, and it’s not clear which will is the latest, then you have grounds to bring a contest.
There’s a Time Limit
You can contest a will immediately upon the death of the testator, but once the will goes into probate, you only have two years to bring a contest. There are two limited exceptions. First, if you discover fraud, you can bring a contest up to two years from the date you discovered the fraud, even if that’s later than the date the will was entered into probate.
Second, if you were incapacitated at the time your loved one passed, you have until two years from the date you regain capacity. This would apply, for example, if a wife were put into a coma by a car accident that also killed her husband. Her husband’s will may go into probate immediately, but she has two years to bring a contest from the date she wakes up and regains capacity, not from the date of the car accident itself.
Talk to a Probate Attorney in El Paso, TX
If you need help with contesting a will or creating a will that can withstand a contest, talk to a probate and estate planning attorney at Townsend Allala Coulter & Kludt El Paso, TX now. We also serve clients in Truth or Consequences, NM.
Many families face tough choices when it comes to covering the costs of nursing homes or in-home assistance as they age, and it’s wise to be thinking about how to manage things in advance. In El Paso, TX, a Medicaid attorney can guide you through ways to secure your future with the care you need while keeping your house safe from being sold off to pay bills.
Medicaid Eligibility for Long-Term Care
Medicaid helps cover long-term care expenses for those who qualify, but to get approved, you have to meet some financial requirements. In Texas, a single person applying for nursing home coverage in 2026 must have monthly income below $2,982 and countable assets under $2,000. The biggest hurdle for most people is the limit on assets. “Assets” for this purpose include your bank accounts, investments, and some real estate, and Medicaid can place a lien on the home after your death through estate recovery. Every state is required to recoup costs paid for care when possible, but this recovery only happens if there’s no surviving spouse and/or a qualifying child still in the home.
Another rule to watch is the five-year look-back period. When you apply, Medicaid will review all your asset transfers for the past 60 months to check for gifts or any sales you made for a below-market price. If they find any, it could trigger a penalty period where you’re ineligible for coverage. The penalty length depends on the value of what was transferred, divided by the average monthly nursing home cost in Texas. This is why early planning is so very important.
Your Medicaid Attorney and Asset Protection
Hiring a Medicaid attorney early can make a real difference. An experienced attorney will know how to structure your finances in such a way that you’ll be able to meet the eligibility criteria without losing valuable assets like your home. For instance, they might recommend setting up an irrevocable trust, where you transfer ownership of assets like your house to the trust, which removes the home from your countable resources. Once it’s in the trust, the home is protected from Medicaid’s spend-down rules as long as that move was made more than five years before you apply for Medicaid help.
There are many types of trusts, and an attorney will help you find the right trust for your estate and financial realities. The whole long-term care plan needs to be made in conjunction with all your other plans for your estate. For married couples, you’ll also want to take into account the spousal impoverishment protections that are in place. These rules allow a healthy spouse to keep a certain amount of assets and income without that disqualifying the other spouse from getting the coverage they need. Your attorney will make sure you maximize all these allowances so both you and your spouse are protected, no matter what happens.
In the end, taking careful and thoughtful steps now is the best way to protect your home. For personalized help in the El Paso area, reach out to us now at Townsend Allala Coulter & Kludt.
A complete estate plan needs a set of core legal documents, and some plans will need additional documents specific to that estate’s unique makeup. Your El Paso estate planning lawyer will help you put together all the required documents, like your will and powers of attorney, and advise you on what else is wise for your situation.
Documents in a Complete Estate Plan
Last Will and Testament
This is the foundational document and arguably the most important, as it specifies how your assets should be distributed and names an executor to manage that process. Your executor needs to be someone you can trust and who has the financial acumen and objectivity to do it well. Your will can also appoint guardians for your minor children, if you have any.
As healthcare costs continue to rise, particularly for long-term care, understanding the nuances of Medicaid planning is increasingly vital for seniors in Texas. Medicaid planning involves strategizing to meet Medicaid’s strict financial eligibility requirements while preserving one’s assets. For residents of El Paso, TX, and the broader region, this process can mean the difference between losing everything to cover healthcare costs and securing needed care without sacrificing hard-earned savings.
Understanding Medicaid Eligibility in Texas
Medicaid eligibility in Texas is determined based on both income and asset thresholds. As of 2025, individuals must have a gross monthly income of $2,901 or less to qualify, with couples being limited to $5,802. Moreover, the maximum countable resources for individuals and couples are capped at $2,000 and $3,000, respectively. These figures exclude the individual’s home, one vehicle, and certain burial funds, among other specific exemptions.
Read the rest of this entry »If you have a loved one with special needs, it’s natural to be concerned about how they’ll be cared for after you’re gone. You can get a lot of peace of mind when you talk to an estate planning attorney in El Paso, TX.
1. Plan Out the Needs
The first step is to get a realistic understanding of precisely what your loved one will need. As you discover these needs, you will want to write out a letter of intent to guide future caregivers to understand what you want done for your loved one. Ideally, start with the daily routine, the basic medical care that’s always required, your goals for your loved one’s life, and whatever plan you have for getting there.\
What Is the Probate Process and Why Does It Matter?
Probate is a legal process that begins after someone’s death, and the point is to ensure that their assets are handled according to their wishes or, if their wishes are not clear, according to state law. This is a court-supervised process that can take time and cost money, and a probate lawyer in El Paso, TX can help you understand how it may affect your estate, help you plan to avoid probate as much as possible, or get you through a probate dispute if you’re already mired in one.
From a Probate Lawyer: What Is the El Paso, TX Probate Process, and Why Does It Matter?
Getting Technical
Probate is a judicial process that does two important things: first, it authenticates a person’s will, if they have one, and second, it appoints an executor to oversee the administration and distribution of a deceased person’s estate. If that person left a will, then the administration should be done according to the terms of the will, provided the will is legal and valid. If there is no will, then the executor will follow Texas intestacy laws to decide who gets what.
Why It’s So Important
The word probate comes from a Latin word that means “to prove,”and that has reference to its primary duty of proving, or authenticating, a will. This is important to avoid disputes. If you cannot prove that a person left a will or what that will is really saying, then you cannot have a fair distribution of their property or a distribution that follows their wishes. There must also be oversight to prove which will is valid if there’s more than one. Without probate, potentially any number of unscrupulous actors could try to claim parts of an estate.
Probate is also important when there is no will. This can happen for various reasons, but when it does, the probate court steps in to make sure that spouses and children are prioritized over everyone else in the distribution of the deceased’s estate. Finally, probate is crucial because certain assets, like real estate, cannot just be handed over to another person without a legal process. Probate ensures this happens smoothly.
How It Works
The process begins when the court validates a person’s will. This means the court looks to see that it is legal. If it is, the will should name an executor for the estate, and the probate court will then give this person the authority they need to oversee the assets of the estate. If there is no will, then the court will appoint an administrator to fill the role.
The executor then inventories all assets and determines their value. Once that’s done, creditors have a chance to bring any legitimate claims. These must be dealt with, and all taxes must be paid. Then, assets can be distributed to the beneficiaries, either according to the wishes of the testator or according to intestacy laws.
For help with your estate planning contact Townsend Allala Coulter & Kludt in El Paso, TX or Truth or Consequences, NM today.
Guardianship is a serious matter that involves taking away a certain amount of a person’s independence and agency over their own lives, and the courts in El Paso, TX do not lightly assign guardianship to an older person. But it’s absolutely necessary in some situations, and an elder law lawyer can help you set up a guardian, remove a guardian if it’s inappropriate, or change a guardian if needed.
Setting Up a Guadianship
There are two main types of guardianship. The first is guardianship of the person, and this is most common for those who either have a developmental or intellectual disability and are over 18, or for an elderly person who is experiencing dementia or other issues that make them unable to make good decisions for themselves. Guardianship of the person allows the guardian to make decisions about where the person will live, their healthcare and similar needs, and to manage small estates. If the person in need of guardianship has no more than $20,000 in assets and only gets Social Security benefits, then the guardian of the person is permitted to take care of their finances, though they must send an annual report to the court about the person they are watching over.Guardianship of the estate, or conservatorship, allows the guardian to manage the finances of someone who is unable to do so for whatever reason. Guardianship of the estate requires careful accounting of the ward’s estate and how it’s being managed, and in most cases, the guardian must get the court’s approval for nearly everything. This is essential to protect wards from guardians who may try to take advantage of their condition.To become a guardian, you will need to complete an application, prove that the person really needs a guardian, meet all challenges, talk over the duties with an attorney, pass a background check, and complete an online training course. Then you will need to apply with the court and can only function as a guardian once the judge has signed off on the guardianship. Guardianship has to be renewed each year, and the courts can rescind a guardianship at any time.
A will and a living will are two different things, but they’re both important parts of your estate planning. Talk to a wills attorney here in El Paso, TX to make sure your estate has everything it needs to protect you and your beneficiaries.
From an El Paso, TX Wills Attorney: What’s the Difference Between a Will and a Living Will?
A will is something that you write to guide your loved ones and the courts in distributing your assets after you pass away. A living will is a document that you create explaining what type of end-of-life treatment care you want: or do not want. A will controls all of your assets; a living will only speaks to medical intervention when you come to the end of life, if you are unable to make choices for yourself.
Having a living will in place means that your loved ones know exactly what you want to happen towards the end of your life. Not only does this document protect your interests personally, but it also protects your loved ones. It can be so difficult to have to make decisions about end-of-life care for a loved one, but with a living will in place, you’ve already made those decisions for yourself.
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