Probate & Estate Administration
I have handled probate matters since 1993, including very large estates with estate tax returns. I charge a fixed fee for most probate matters, quoted in advance. Consultations, telephone calls, and e-mails are free during the probate process. I want you to contact me during the probate process, and not be worried about getting a bill in the mail because you communicated with me.
Let me help you through this troubled time.
WHAT IS PROBATE?
Probate is the legal process to determine who will receive the deceased person’s assets. Probate also is a forum where creditors of the deceased person can assert their claims to have unpaid debts paid out of the assets of the estate. In probate, the deceased person is often referred to as the “decedent.” There are some assets that do not have to go through probate. Life insurance, bank accounts, and retirement plans (IRAs, 401Ks, SEPs) with a named beneficiary are distributed to the beneficiaries without having to go through probate – the beneficiaries just produce a death certificate, a driver’s license or other identification, and complete the documentation required by the institution in order to receive the funds.
Assets that are in a revocable living trust do not have to go through probate because the assets in the trust are not owned by the decedent’s estate. Assets that commonly have to go through probate are real estate, bank accounts with no beneficiary designation, and stocks and bonds that are owned by the decedent in their own name.
COMMON FALLACIES ABOUT PROBATE
1. “I have the will, and the will provides that I am the executor and that I will receive all of the property. I will just take the will to the bank, stock broker, and the county clerk, and I will get all of the property changed into my name. There is no need to go to probate court.” If there are assets that have to go through probate, the will has to be ruled upon by a judge through a court order to actually be the valid last will and testament of the deceased. For example, the court has to determine that the decedent was of sound mind when they signed their will.
Additionally, the person appointed as executor in the will has to prove to the court that they qualify under Texas law to serve as executor. It is quite common for a surviving spouse to not probate the will of the deceased spouse. If the decedent had children from a prior marriage, the refusal of the spouse to probate the will can have disastrous consequences for that spouse. If the will is not probated, the decedent’s children will receive the deceased spouse’s separate property, and the deceased spouse’s ½ share of the community property, when the will may have provided that all of those assets were to go to the surviving spouse. I have seen instances where couples were married for over 40 years and the children from a prior marriage have taken a large part of the estate because the surviving spouse “sat on their rights” and did not probate the will.
2. “Probate is expensive, and the estate can be tied up for years.” While this does happen occasionally, Texas has a relatively streamlined probate process called independent administration. Most estates in Texas qualify for independent administration. Under independent administration, the executor does not have to go back into court and constantly ask the judge for permission to do things, such as sell estate assets. The probate cases that take a long time usually involve a will contest. Estate administration also can take a while to finish if the estate is large and an estate tax return has to be done.
In the case of an estate with an estate tax return due, it is not the probate process causing the delay – the delay is caused by having to gather all of the detailed information required by the IRS for the estate tax return. In an independent administration, the client/executor usually goes to court one time for a hearing that commonly lasts three minutes. In many cases, the probate process can be completed in 90 days or less. If the decedent died without a will, the probate process is more complicated, because the court will appoint an additional attorney to the case to represent unknown heirs.
ALTERNATIVES TO PROBATE
1. REVOCABLE LIVING TRUST: If your assets are in a revocable living trust, those assets will not have to go through probate because the assets are not in your estate. However, the key point in avoiding probate with this technique is that your assets MUST be in the revocable trust when you die. If even one asset that has to go through probate is left out of the trust, there will have to be a probate proceeding. Additionally, if a personal injury suit arises as a result of your death, a probate proceeding will have to occur because the wrongful death claim is a claim of your estate.
I have had cases where a client had everything in their trust upon their death, but the client died as the result of an automobile accident or mesothelioma, and a probate proceeding had to occur as a result of the wrongful death claim. Anyone who tells you that you can always avoid probate if you have a revocable living trust is not telling you the truth. I have done thousands of trusts over the years, and help my clients place their assets into the trust. Even with my funding assistance, there are still situations that occasionally arise where a client will have to go through probate.
2. AFFIDAVIT OF HEIRSHIP: Sometimes an affidavit of heirship detailing the family history and signed by disinterested witnesses can be used to facilitate the sale of real estate without having to go through probate. However, title companies are becoming increasingly reluctant to accept affidavits of heirship. Additionally, the use of an affidavit of heirship can be disastrous to the surviving spouse if the surviving spouse uses an affidavit of heirship in lieu of probating their spouse’s will and an unknown heir should later step forward for part of the estate, such as a child that was the result of a teenage dalliance by the deceased spouse. If there is a will, the proper procedure is to not sit on your rights – probate that will. I do not recommend the use of an affidavit of heirship if the decedent died with a will.
3. BENEFICIARY DESIGNATION: Sometimes a client who does not own real estate can just make their bank accounts and retirement plan accounts payable on death to individuals through beneficiary designations, which will avoid probate. However, in the same manner as placing assets into a revocable trust, if just one asset is missed, a probate proceeding will have to occur. The decedent should still have a will just in case an asset is missed, or if a wrongful death claim should arise. A will can greatly simplify any potential probate proceeding.
TIME PERIOD TO PROBATE A WILLYou have 4 years from date of death to file a will for probate in Texas. If you do not file the will for probate within 4 years, the court may not admit the will to probate unless you can show good cause as to why the will was not filed for probate within that four year period.
DIFFERENT TYPES OF PROBATE
1. SMALL ESTATE AFFIDAVIT: If the decedent dies with a very small estate and did not have a will, this procedure will allow the heirs to collect assets such as an investment account by filing an affidavit with the probate court, and the court will issue a court order authorizing the heirs to collect the funds in the account. The court will usually issue the order without a hearing. There are some other technical requirements that must be met to use this process.
2. PROBATE THE WILL AS A MUNIMENT OF TITLE: In this process, the will is probated merely as an indication as to who will receive the decedent’s property. No executor is appointed. While this is a less expensive form of probate, it is very common for an asset to subsequently appear that requires an executor, and the client and attorney will have to go to court for a second time to change the type of probate proceeding. Additionally, some out of state financial institutions are unfamiliar with this process and may require an executor.
3. PROBATE THE WILL IN AN INDEPENDENT ADMINISTRATION: This is the most common form of probate. An executor is appointed who has full authority over the assets in the estate, and can collect assets using “letters testamentary.” When you go to a bank or other institution to access the decedent’s bank account and the banker asks for “letters,” this is the type of probate that must occur to obtain the “letters” sought by the bank.
4. DETERMINATION OF HEIRSHIP WITH ADMINISTRATION: This proceeding is also called an intestacy proceeding, and occurs when someone dies without a will. When you die without a will in Texas, the state essentially writes a will for you, through state law. The state intestacy laws will govern who will receive the property in your estate. If you have property such as an IRA, bank account or life insurance with a beneficiary designation, the beneficiary designation controls who will receive those assets – not the state intestacy laws. This is the most expensive and time consuming form of probate, because two attorneys are on the case. An attorney ad litem is appointed by the court to represent unknown heirs. The other attorney on the case is your own attorney.
By Bill Wollard
Also see Guardianship for more information about guardianship laws in Texas.