Probate in Texas

What is Probate?

When someone passes away, they usually own certain property (real estate, bank accounts, jewelry, etc.) referred to as their “estate." Probate is the legal process by which the estate of the deceased person is transferred to his or her heirs or beneficiaries. One of the major functions of the probate process is to clear title to the assets that are transferred.

When is Probate Required?

Most property owned by a decedent is subject to probate. However, some types of properties may not be subject to probate, such as joint bank accounts with rights of survivorship, retirement accounts such as 401ks, IRAs, pension plans if they have properly designated beneficiaries, and life insurance policies if they have properly designated beneficiaries. Since these properties have had successors or beneficiaries already named, there is no need for court involvement. Most people generally own a mixture of property that is subject to probate and property that is not subject to probate. The exact determination depends on the specific decedent’s estate.

When should a will be probated?

Under Texas law, a will cannot be admitted to probate after 4 years from the date of the death of the decedent unless the administration is due to the necessity of collecting funds that are due to the estate.

Where should you file for probate?

According to Texas law, wills can be admitted to probate in the county where the decedent lived, where the decedent’s principal estate is located, or where the decedent died.

Who should file?

If the deceased had a properly drafted will, he or she named an executor in the will who would be responsible for the filing and administration of the estate. The administration would involve gathering the assets of the deceased, paying off any debts, expenses, and taxes that the estate may owe, and distributing the remainder of the estate according to the decedent’s will. If the deceased did not have a properly drafted will, then the court will appoint an administrator for the estate. According to Texas law, the preferences for appointment of an administrator, are, in order: 1. The surviving spouse, 2. The primary heir of the decedent, 3. Any heir of the decedent, 4. Any next of kin of the decedent, 5. A creditor of the estate, 6. Any person of “good character" living in the county where the decedent resided, or 6. Any other person who is not disqualified to serve.

Two major types of Probate

There are two major types of probate: independent administration and dependent administration.

Independent administration is created in the will of the deceased or by the court with the permission of all the beneficiaries of the estate. Independent administration means that the estate can be administered with minimal court supervision. Once an executor is appointed, he or she must give notice to the beneficiaries and creditors of the deceased, and file an inventory and appraisement of the decedent’s assets and a list of claims made towards the estate. Otherwise, the independent executor is free to go about fulfilling the decedent’s wishes as per his or her will.

Dependent administration is necessary when a will does not exist or the will was not drafted with the specific language necessary for independent administration. During dependent administration, a court chooses an administrator and closely monitors the activities of that administrator. The person asking the court to be the administrator must get a bond to protect the estate from any potential misappropriations. An heirship determination proceeding is held where the court determines who is entitled to inherit from the estate based on Texas law. The court appoints an attorney ad litem to represent any unknown heirs of the decedent. Usually all transactions and acts of the appointed administrator must be approved in advance by the court. The administrator must also file periodic accounts for the court’s approval. As a result of all the additional procedural steps, dependent administration ends up being a lot more expensive and time consuming than independent administration.

Alternatives to Probate

A Muniment of Title proceeding may be advisable if the decedent had a will, there were no unpaid debts except for debts secured by real estate, and there is no need for administration. By this procedure, the court will not appoint an executor. When the court admits the will to probate as muniment of title, it entitles the heirs of the decedent to become owners of the property. It also allows anyone dealing with the estate to transact with the new owners.

A Small Estate Affidavit may be used if the decedent did not have a will, the value of the entire estate not including homestead is less than $50,000, thirty days have elapsed since the death of the decedent and 2 disinterested witnesses file a sworn affidavit concerning heirship.

Are there any ways to avoid probate?

You can avoid probate by not owning anything besides property that is not subject to probate (life insurance, 401ks, IRAs, etc.) during your lifetime. Some people accomplish this by creating a living trust. A living trust is created when a property owner (Grantor) transfers title of his or her property to a person (Trustee) to hold and manage for the benefit of one or more Beneficiaries. Any person who has legal capacity can create a trust or be a trustee. Quite often, the grantor of a living trust also acts as the trustee. When the grantor passes away, the property held in trust passes to the beneficiaries without the need for probate. Keep in mind that only the property within the trust passes without probate. If the decedent had another piece of property that was not transferred to the trust, the need for probate would still exist with regards to that piece of property. Therefore, if you decide to create a living trust, it is important to still have a properly drafted will that allows for independent administration of your estate. Living trusts are usually revocable, which means that the grantor can change the terms of the trust agreement or terminate the trust altogether at a future date.