PRESENTED BY: EVELYN L. GORDON, ATTORNEY AT LAW E STATE A DMINISTRATION : A Bare Bones Guide to Texas Probate
PRESENTED BY: EVELYN L. GORDON, ATTORNEY AT LAW
ESTATE ADMINISTRATION: A Bare Bones Guide to Texas Probate
Discussion Points ◦ What is Probate?
What to do after someone dies? Do I have to go through probate?
◦ What are my options? Probate of Will Judicial Determination of Heirship Small Estate Administration Will as Muniment of Title Affidavit of Heirship Informal Family Settlement
◦ Alternatives to Probate Non-Probate Assets Avoiding a Full Estate Administration
Helpful Resources ◦ Lone Star Legal Aid – www.lonestarlegal.org
◦ State Bar of Texas - www.texasbar.com
◦ Texas Young Lawyers Association Texas Probate Passport
www.tyla.org/tyla/assets/File/38668TexasProbatePassportWebReady.pdf
◦ Today’s PowerPoint Presentation www.egordonlaw.com
How the probate process works.
What is probate?
◦ wrapping up deceased person’s financial affairs
court-supervised process to transfer property
gives notice to all potential beneficiaries and creditors
◦ determination of validity of a will
if no will, determination of legal heirs
◦ distribution of decedent’s assets to beneficiaries and creditors
When to probate?
◦ 4 years to probate a will, but
should probate as soon as possible to avoid
accumulating additional debts
unfairly saddling one family member with expenses of the estate
delays in transferring title to property
Starting the Probate Process
◦ Do I need an attorney?
typically, yes
◦ Process begins with attorney filing an
Application to Probate Will and for Issuance of Letters Testamentary
any interested individual can initiate probate
What happens next?
◦ clerk issues citation and posts notice at courthouse
◦ court hearing held not less than 2 weeks later
executor provides proof of will and decedent’s death
determination of whether will is admitted to probate
order issued validating will and appointing executor
executor takes oath
court issues letters testamentary
What are Letters Testamentary?
◦ formal instrument of authority to act on behalf of the decedent’s estate
issued by the court
◦ Letters of Administration
issued to court-appointed administrator when
decedent died without a will
decedent did not appoint executor of will
executor appointed by will declines to serve
Who can serve as estate administrator?
◦ if no executor named in the Will
surviving spouse
principal beneficiary of the estate
any beneficiary of the estate
next of kin of decedent (nearest in order of descent)
creditor of the deceased
any person of good character residing in county
incapacitated persons, convicted felons, and non-residents of Texas cannot serve
Responsibilities of Executor/Administrator? ◦ gathering assets of person who died
◦ taking possession of all property –
cash assets must be kept in separate account
◦ preparing formal inventory or
affidavit in lieu of inventory if no debts except secured debts
◦ notice to creditors –
paying debts of the estate
claims presented while estate is still open
◦ tax returns (see form 706)
◦ closing the estate
distributing remaining assets to those entitled to them
Priority of Claims Against the Estate
funeral and last illness expenses, up to $15,000
family allowance for surviving spouse and minor children
amount fixed by probate court
expenses of probate administration
secured claims if mortgaged property is sold and the proceeds are not required to pay the above items
Judicial Determination of Heirship
◦ decedent died without a will court determines the legal heirs
all heirs must be notified and located
◦ typically most expensive and time-consuming form of
probate
◦ may be necessary even if there’s a will if no provision for residual estate
no provision for lapsed or void gifts
ambiguity in language of will
Small Estate Affidavit
◦ no will, and less than $50,000 in assets
(do not include value of real property)
real property requirements
must have been decedent’s homestead
applicant must have lived on homestead with decedent
affidavit must be signed by all heirs
◦ affidavit filed with probate court
◦ court issues order approving the affidavit
Will as Muniment of Title court order establishing validity of decedent’s last Will
certified copy of Will and Court’s Order used to
transfer title in any property to
people listed in the certified Will
Will and Order serve as new deed to any real estate
no administrator required
no outstanding debts
best when mostly real estate [banks may not accept]
only way to probate will more than 4 years after death of decedent
Affidavit of Heirship ◦ decedent died without a will and left only real
property
affidavit filed in deed records of county where property located
signed by 2 disinterested witnesses stating that:
they knew the decedent
decedent died on a certain date in a certain county
identity of decedent’s family members and heirs
decedent did not owe any debts at the time of his death
witnesses do not stand to gain financially from the estate
Informal Family Settlement
decedent only had personal items
personal effects,
furniture, etc.
motor vehicles will require Affidavit of Heirship filed with county tax assessor
Dying Intestate – Who Gets What?
community property is all assets acquired during marriage, including
salary, wages, income generated from community and
separate property
retirement or pension funds based on income earned during marriage
cash dividends and income earned on separate property investments
Dying Intestate
community property
cannot avoid community property system through a will
need written agreement to reclassify community property
premarital property agreement;
marital property agreement; or
community property partition agreement
Dying Intestate
◦ quasi-community property out-of-state married person
acquires property in non-community property state
relocates to Texas
Texas courts may treat as community property
Dying Intestate
separate property is all assets acquired before
marriage and
gifts received during marriage
inheritances received during marriage
assets purchased with separate property
settlement awards for personal injury
separate property by written agreement
Dying Intestate – Community Property
◦ spouse inherits ALL community property if
no surviving children; or
all of decedent's surviving children are also children of the surviving spouse
Dying Intestate – Community Property
◦ children
if all surviving children are not the children of surviving spouse,
surviving children or their descendants receive decedent's 1/2 share of community property;
spouse keeps their 1/2 share of community property and occupies the homestead for remainder of life
Dying Intestate – Separate Property
◦ children
separate personal property divided
2/3 to children or their descendants and
1/3 to the surviving spouse
separate real property passes to children, but
surviving spouse has life estate in 1/3 of real property, including right to live in, use, and enjoy property during surviving spouse's lifetime
Dying Intestate – Separate Property
◦ surviving spouse, no children
separate personal property to surviving spouse
separate real property -
1/2 to surviving spouse; and
1/2 to decedent's parents or collateral relatives
collateral relatives = siblings or their descendants
if no collateral relatives, all separate real property passes to surviving spouse
Dying Intestate – Separate Property
◦ surviving children and no spouse
all separate personal and real property passes to the children or their descendants
Dying Intestate
◦ ALL ASSETS on hand at end of marriage are legally
presumed to be community property
until proven to be separate property by clear and
convincing evidence
a marriage ends at death or by divorce
Disadvantages of Dying Without a Will
◦ you may want spouse to receive everything, but
spouse might only receive 1/2 of the community property and 1/3 of your separate property
with will, can give spouse all or none of your separate property can give spouse portion of your ½ community property can pass unlimited amount to spouse free of estate tax
Disadvantages of Dying Without a Will
◦ if one heir has already received their intended
portion of your estate prior to your death and
you die without a will, that heir could receive an additional portion
Disadvantages of Dying Without a Will
◦ your assets could end up with those you don’t want
to have them
◦ if legal heirs cannot be located, your entire estate would pass to the State of Texas
Planning ahead to minimize the costs of probate.
ESSENTIAL PLANNING ◦ Last Will and Testament or Trust(s)
◦ As many Non-Probate Assets as Possible
◦ Designating Executor in Will to Serve w/o Bond
◦ Declaration of Guardian of Children
◦ Agent to Control Disposition of Remains
◦ Knowing How to Locate All Heirs
Court Procedures No Court Involvement
Application to Probate Will
◦ decedent left a will
◦ assets exceed $50,000
Determination of Heirship
Small Estate Affidavit
Will as Muniment of Title
Affidavit of Heirship
Informal Settlements ◦ mostly personal items
Non-Probate Assets ◦ Right of Survivorship
◦ POD Accounts
◦ TOD Accounts
◦ Retirement Accounts
◦ Insurance Policies
◦ Life Insurance Trusts
◦ Living Trusts
Copyright © 2014 by The Law Office of Evelyn L. Gordon. All rights reserved. No part of this PowerPoint Presentation may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods.