Frequently Asked Questions About Probate In Texas
Is Probate Always Necessary?
No, not always. But if there is a will, submitting the will to the local probate court (this is not filing for probate) is mandatory. If there is real estate involved, or titles to vehicles which need to be changed, or perhaps, if there are bank accounts which need to be allocated pursuant to a will, then yes, probate is definitely the route which you should go.
Is Probate Expensive?
Relatively speaking, no. In cases where there are few debts to pay and a well-drafted will, then probate will not likely cost more than the beneficiaries are willing to pay for the peace of mind granted by having a will admitted to probate.
How Fast Can We Do Our Probate Case?
If you mean “fast” as a means of putting up a property for sale, then the answer might be “as fast as a month or two.” If you mean to ask long will it take for it all to be over? Perhaps, you might need to understand that probate does not necessarily ever have to end. Many lawyers keep the probate open in the event that a newly discovered piece of property belonging to the estate needs to be distributed to the rightful heir. There is no harm in keeping a probate case open forever.
How Many Types of Probate Are There?
In Texas, there are primarily two types of probate of a will. An administration (either independent or dependent) and a probate of a will as a muniment of title only. The former anticipates the need to manage estate property, or perhaps, pay debts off. The latter is primarily used for getting the property into the right hands without any need to manage property or to pay debts.
What Is An Independent Administration?
The horror stories about lengthy and expensive probates generally arise from non-independent probate administrations. In Texas, the legislature has made a “fast-track” style of probate which allows the executor to handle all of the important aspects of settling an estate without the need for constant court hearings, and mounting lawyer fees.
Steps of Texas Probate
Typically, the named executor will file an application for probate the Decedent’s will. Probate is conducted in the county of the Decedent’s last residence, or where the Decedent has substantial assets.
Following the filing of the probate application, the county clerk will post a notice at the courthouse to notify all that a probate application was filed. Where no contests are filed against the application, the probate court will conduct a hearing on whether to accept the will to probate, appoint an executor, and open an administration of the estate.
After an executor or administrator is named to the estate, he or she will normally be required to file an inventory of all the assets in the estate within 90 days of appointment. The executor must swear that the inventory is accurate to the best of his or her knowledge.
The Inventory must include sufficiently detailed descriptions of the estate assets together with reasonable valuations of such assets. There is an exception to the filing rule for independent executors. If there are no unpaid debts owed by the estate, except for secured debts, taxes, and administration expenses, and if the decedent’s will does not require the Inventory to be filed, then the executor may file an affidavit in lieu of inventory instead of an inventory.
the executor will notify beneficiaries of the estate. In place of receiving formal notice, beneficiaries may also sign waivers of service. At any rate, the executor will be required to certify to the court that all beneficiaries have been given proper notice.
Because Decedents usually pass with outstanding bills, therefore, in addition to the beneficiaries, secured creditors are also entitled to receive notice of the probate proceeding. Unsecured, or non-lien creditors, do not necessarily receive formal notice (other than published notices in the newspaper), but their claims, if timely filed, will need to be addressed by either accepting their claim, which requires an attempt to pay, or by rejecting the claim (putting the ball into their court to prove the validity of the claim).
All valid debts must be paid from the estate. Typical debts include expenses of the last illness, medical bills, mortgages and other personal debts.
The estate cannot be concluded if family members or other potential beneficiaries are contesting a will, or if they file for your removal as executor. These disputes must be decided by a probate court judge.
In the state of Texas, contesting a will must be done within two years after the original probate. Good legal counsel may be necessary to direct and guide you through the dispute process.
The person contesting a will must prove that the will is invalid or that there is something wrong with it. There are several ways that a will can be determined to be invalid, including: proving that the will was forged; that the will was the result of undue influence on the Decedent; that the Decedent was incompetent at the time of signing; that the will was not properly endorsed; or that another document is perhaps the true will of the Decedent.
In lieu of going to court, many people contesting a will often find that resolving conflict with the other parties is a great alternative to litigation in Texas probate.
After the disputes are resolved, any remaining assets are then distributed to the beneficiaries as provided for by the will.
SHOULD I HAVE A WILL OR A TRUST?
If you truly need a trust, then the obvious answer this question is “yes.” Well, to perhaps further clarify my response: Anyone who drafts a trust to avoid probate invariably needs a Will as well. This is true primarily as a result of the nature of trusts. A trust is a fictious entity which holds or manages property on behalf of a beneficiary. Many individuals attempt to “avoid probate” by placing their property into a trust which then holds their property, and pays out at some time in the future—typically following the Settlor’s death. While this might work in many instances, there is one overriding rule about trusts which should never be forgotten: A trust is only effective for property which is actually placed into the trust. What this means is that, once a trust is created, then it must be constantly monitored to ensure that the Settlor’s property has not been transferred out, nor sold, nor exchanged for any other property (without adjustments to the trust). For example, if you place your new Lamborghini into your trust and then, sometime in the distant future, you trade that Lambo in for a Ferrari, then the Ferrari too must be affirmatively placed into the trust. Since Wills do not have this problem, they serve to avoid this serious deficit of the typical trust.
Another example of problems regarding trusts is important to note: Newly-acquired property can often get “lost in the shuffle” and inadvertently left outside of the trust. This can lead to tragic results. By way of illustration, let’s imagine that John creates a trust for his friendly neighbors since he’s not married, nor does he have any children. So, John goes to his lawyer’s office and has a trust created, and, right then and there, John puts all of his real estate and investments into his trust. John now feels that he is well-prepared to have his estate bypass the probate process and go straight to the neighbors upon his death. However, on the way home from his lawyer’s office, John is hit by an 18-wheeled Chevron truck. Wow! Now John’s estate has a $5 million-dollar lawsuit against Big Oil! Ahh, but John didn’t think he was going to get killed by a Chevon truck that morning, and he certainly didn’t have time to put his unanticipated wrongful death lawsuit into his trust. But what happens to the money from the big Chevron payout? The answer to this question is, “look to John’s Will.” Oh, but John was told on the radio that he didn’t want to have a Will, only that he should have a trust! In short, John was deceived by the “avoid probate” shysters. As a result, John’s probate estate is likely have more money than he had ever placed into his trust, yet John failed to create a Will in order to deal with this contingency. John’s illustration also applies to individuals who are married and who have children. In short, always have a Will. Always.
In order to avoid John’s problem, it is the policy of our office at Andrew J. Bolton, Esq. to never draft a trust unless and unless and until an adequate Will also accompanies that trust instrument.
PROBATE ALTERNATIVES IN TEXAS
When a loved one passes, the difficulties experienced by family and friends are often amplified by the need to dispose of, or to distribute, the deceased’s estate. For those who are not lawyers, Texas’s probate procedures are designed by make the process as easy as possible under the circumstances. With this in mind, the Texas legislature has created various alternatives within the probate process as well as other alternatives to the probate process. Some procedures are applied when there exists a written will, others are intended for situations where there is no will.
This is the “standard” probate procedure for most Texas probate estates. In a probate of a will as an “Independent Administration,” the will typically appoints an executor to serve as an independent executor, with the right to:
- collect and preserve the deceased’s property,
- pay valid claims, and
- distribute remaining assets according to the terms of the will.
Sometimes a will fails to name an independent executor or administrator. In such cases, an independent executor may still be appointed if all of the named beneficiaries agree to the appointment of an independent executor.
This is the dreaded probate that you hear about on the radio commercials. In a dependent administration, the executor usually has to post a bond (which costs money) to ensure his or her compliance with the terms of the will and state law. He also will be required to obtain court approval for the payment of all claims, the distribution of all property, and the sale or other transfer of estate property—each of which requires an expensive, multi-step, court-involved process. Dependent administrations are sometimes required where the will fails to call for an independent administration, or where it specifically calls for a dependent administration.
Proceeding to Determine Heirship
Where there is no will, there may be added costs of getting the decedent’s property into the right hands. Proceedings to determine heirship are a case in point. In a proceeding to determine heirship the Court will hear evidence from witnesses about who the deceased was married to, divorced from, and the parent of—all to determine who is entitled to estate property. In such cases, the courts will order that an additional lawyer to go out and interview people and conduct research in order to determine if there exist any missing heirs. This all costs money, and the known heirs will be the ones who are going to pay for it (typically out of their share of the estate’s property). Once heirs are satisfactorily determined, the Court still must determine whether there are bills which must be paid and claims which should be asserted on behalf of the estate. If so, then the Court may order an individual to serve as an administrator which individual may be required to post a bond (see “Dependent Administration,” above).
Muniment of Title Proceedings
Of the probate options in which there is a will, muniment of tile proceedings are one of the least cumbersome to employ. A muniment of title proceeding is one wherein the court confirms that the distributions set forth in the will are, in fact, legal and binding distributions of the deceased’s estate. It is only available where there are no creditors with claims against the deceased, i.e. where there is no need to administer the estate. Unfortunately, some financial institutions and even title companies balk at doing business folks who’ve received their interest in a muniment of title proceeding. They simply want more proof than a court order saying that certain property mentioned in the will belongs to one or more individuals named as beneficiaries. Nevertheless, muniment of title proceedings are often a good option for small estates.
Small Estate Affidavits
Even simpler than a muniment of title proceeding, and perhaps even less acceptable to institutions holding estate property, is the small estate affidavit. Of all court-involved probates, this is the quickest, fastest, and simplest. In the small estate affidavit situation, interested persons will file an affidavit setting forth the decedent’s family history. The affidavit will recite the family history and the known heirs. It is only available when the total size of the estate is less than $75,000.00. The affidavit is filed with the Clerk of the Court and then is submitted to the judge for consideration. Once accepted, the Court will sign an order approving the affidavit. As noted, a bank holding $50,000 in cash is unlikely to distribute such funds to heirs, even with a court-approved small estate affidavit. They deem it just too risky.
Affidavit of Heirship
This is a non-judicial procedure and applies where there is no will. In the affidavit of heirship scenario, an affidavit, very similar to the small estate affidavit, signed by two or more disinterested witnesses who have extensive knowledge of the decedent’s family history. It is filed with the County Clerk in the same county where the deceased’s property is located. If there is a very small estate and no debts, but there is a need to get property re-titled into the name of an heir, this could be the answer—but only should be employed after confirming with the institution holding the title or property, that they will accept it in lieu of a formal probate.
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