What is Probate?

Probate is a process that applies to people with and without Wills.  It is a series of proceedings that the court uses to ensure that a decedent's probate property, both real and personal, are properly transferred to their beneficiaries.

Generally, these probate proceedings include collecting all the decedent's probate property, paying all creditor's claims against the estate (i.e. debt), and then distributing said property in accordance with a valid Will or the laws of intestate succession.

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When creating an estate plan it is important to know which of your property is "probate" versus "non-probate."  The key aspect of non-probate property is that it passes directly to the beneficiary without needing probate court approval.  Non-probate property typically includes but is not limited to:

  • Property owned with a Right of Survivorship
  • Property held in Trusts
  • Life Insurance Policies with beneficiary designations
  • Payable-on-death (POD) accounts
  • Retirement accounts with beneficiary designations
  • Real Property with a transfer on death deed.

The probate process is more efficient in Texas than other states because there are many different probate options.  Probate is often the most efficient choice for an estate and shouldn't necessarily be avoided.  Remember, having a Will only means you avoid instate succession. Everyone with a Will still goes through probate.  Most importantly, a properly drafted Will can save your family from having to deal with a "court-supervised" probate proceeding which is both time consuming and costly.

Formal Probate Administrations

Formal Probate Administrations are the probate proceedings most familiar to people.  They are called formal because they involve the appointment of a personal representative (i.e. executor or administrator) to oversee the administration of the estate.  The two types of formal probate proceedings are the Dependent "court-supervised" Administration and the Independent Administration.  A properly drafted Will should ask the court for an Independent Executor in order to save your estate countless hours of court time and money.

Dependent Administration

A Dependent Administration is formed when a Will is silent about an Independent Administration and the beneficiaries cannot agree.  This type of administration is both costly and time consuming because it requires the estate's personal representative to seek court approval before they can take almost any action.  For example, a dependent personal representative will have to get a judge signed order every time they want to distribute something as small as a coffee table to a beneficiary.  In fact, they cannot even pay attorney's fees without court approval.  A dependent personal representative's actions without a court order are limited to:

  • Releasing liens on payment
  • Voting stocks
  • Paying Assessments
  • Insuring the estate or property
  • Paying taxes and court costs

Save your personal representative and estate both time and money by AVOIDING the Dependent Administration.  The less court involvement the better!

Independent Administration

An Independent Administration is usually ideal because an independent personal representative does not need court approval to take most actions.  Thus, saving your estate money on attorney's fees without the need of countless pleadings.  Once the Will has been admitted to probate, the independent personal representative simply takes an oath and then carries out the Will's wishes.  Some of their powers include but are not limited to:

  • Power to Sell - ability to purchase,  subdivide, and develop all real, personal, and intangible property.
  • Manage, Sell, or Lease - ability to partition, repair, insure, lease, and deal with all property.
  • Pay Expenses - ability to pay all taxes and other reasonable expenses of the estate including compensating agents.
  • Claims - ability to institute, defend, or abandon lawsuits and claims against or on behalf of the estate.

Remember, the powers of an independent personal representative are vast, so choose this person wisely before giving them control over your estate.

Need to Probate an Estate?

Death is never easy.  Give us a call at Third Coast Law today and let us help you have an efficient and pain-free probate process.

Bonds in Probate - Draft Around Them!

A bond is money (i.e. collateral) held by the court.  In probate estate administration, this money is paid by the personal representative to ensure that the estate is properly administered.  If a bond is required, the court will set the bond at an amount necessary to protect the estate and its creditors.  The amount is based mainly on the value of the estate and in certain cases it can be a hefty sum.

However, this financial strain can be easily avoided!  A well drafted Will should ask for the estate's personal representative to serve "without bond."  These few words can save your chosen representative from having to tie up their own assets while they are trying to assist your loved ones.

Alternatives to Formal Adminstrations

Although the Independent and Dependent administrations are by far the most common types of probate proceedings, they are not always the most efficient.  The Texas Estates Code provides alternatives to these formal administrations for decedents with and without Wills:

Family Settlement Agreement - (Will Required)

In Texas, a Will is not required to be probated.  The Estates Code provides an alternative to probate when ALL heirs can agree on how to distribute an estate.  This alternative is called the Family Settlement Agreement.  It requires a signed agreement providing an alternative plan of distribution and an agreement not to probate the Will.  However, this process can only be done if a formal administration is NOT required.  A formal administration is required when:

  1. there are two or more debts against the estate,
  2. the court is needed to "partition" the estate, or
  3. an administration is needed to recover funds or property due to the estate.

In other words, the Family Settlement Agreement is best for small, uncomplicated estates, where all the beneficiaries get along and can come to a singular agreement.  If there will be legal issues with the recovery of assets or disagreements amongst family members, then this probate alternative probably isn't for you.

Muniment of Title - (Will Required)

The Muniment of Title provides for a streamlined probate process because it does not require the court to appoint an Executor or an Administrator to be completed.  Muniment of Title proceedings can be finished in as few as 30 days after the Will has been probated. However, an attorney can only use the Muniment of Title proceeding when:

  1. The decedent left a Will, and
  2. There are either NO unpaid debts

If these requirements are met, then the court will sign an order recognizing the decedent's Will and said Will can be used to transfer title to property.  This process is best for very simple estates where the beneficiaries of the decedent are clear and titled property is the main asset passing to them.  Additionally, it is the ONLY way to probate a Will after 4 years have passed since the decedent's death.

Small Estates Affidavit - (Intestacy Only)

As the title states, this probate option is only available to intestate decedent's whose total assets, excluding their homestead, are valued at LESS than $75,000.  The heirs file an affidavit with the court in the county where the decedent passed stating:

  1. the decedent died WITHOUT a Will;
  2. 30 days have passed since the decedent's death;
  3. the basis for which they are entitled to distribution;
  4. the value of the estate is less than $75,000; and
  5. a list of all known assets and liabilities.

Additionally, this affidavit must be signed by all heirs wishing to receive a distribution and two "disinterested" witnesses (i.e. non-beneficiaries) that can attest to the family history.  Once approved, this Small Estates Affidavit can be used to transfer title to the decedent's homestead or to collect on their bank accounts.

Ready to find out more?

Figure out what probate option is best for your estate by consulting with an experienced probate attorney.  Call Third Coast Law today!