If the decedent had a Will it should name an individual to carry out the duties of administering the estate.  The individual named in the Will to carry out the administration is called an executor.  If the Will does not name an executor, then the court will appoint one.  If the court appoints such a person because the Will does not name an executor or the decedent died without a Will, that person is called an administrator.  Either way, the executor or administrator has to be approved by the court and has legal obligations and duties to the court and those who receive property from the estate.  If the executor or administrator acts improperly, he or she may be held liable for any resulting damages and his or her appointment may be terminated by the court.

In Texas, there are several different methods of administering an estate.  Texas is one of the states that provides for independent administration.  This is administration free of court supervision.  This means that after an independent executor or administrator is approved and an inventory of the estate assets is filed with the court, the executor or administrator can simply take care of the administration of the estate without any further court involvement or supervision.

If there is no need for the appointment of an executor or administrator and the only reason for probating a Will is to clear title to property, a Will can be admitted to probate as a muniment of title.  Under this procedure, there is no executor or administrator appointed.  It is a somewhat simplified method of administering an estate than the traditional formal administration.  This is not for all estates due to certain requirements, therefore you should contact your attorney to see if your situation applies.

If the value of the estate, excluding the homestead, exempt personal property, and non-probate assets, does not exceed $75,000.00, no formal administration is necessary if the heirs file an affidavit with the court showing they are entitled to receive the property of the estate.  In addition to the $75,000.00 ceiling, the small estate affidavit procedure is available only if the assets of the estate, excluding the homestead and exempt personal property, exceed the known liabilities of the estate.  One limitation on the small estate affidavit is its general ineffectiveness to transfer title to real property.  The small estate affidavit is effective to transfer title to a homestead if the homestead is the only real property in the estate.  However, if the estate contains any real property other than just the homestead, the affidavit will not clear tile to any of the real property, including the homestead.

Informal family settlements is another option.  They are permissible where the estate is small and consists only of personal property, such as personal effects and household furnishings, but generally not where the estate includes bank accounts, stocks, and bonds.  If a motor vehicle is involved, a new certificate of title may be applied for by filing an affidavit of heirship with the Texas Department of Public Safety.

A common mistake is that when one spouse dies, the surviving spouse does not have to file anything with the courthouse.  This is not the law in Texas.  Texas offers many different ways to probate or transfer an estate’s assets and therefore you should contact an estate planning and probate attorney for assistance on what route may be best in your particular situation.

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Probate may not be necessary when the decedent’s estate is so small that no action is necessary to distribute the property to the beneficiaries or heirs.  However, probate is required in most other circumstances.

Estate administration involves the following steps:

1.  Collection of the decedent’s assets;

2.   Payment of debts and claims against the estate;

3.  Payment of estate taxes, if any;

4. Determination of heirs, if the decedent died without a Will; and

5.  Distribution of the remainder of the estate to those entitled to it.

In Texas, there are several different methods of administering an estate, some of the more common of which are discussed below.

Dying without a Will:

Many people may assume that if they are married and die without a Will in Texas, their surviving spouse will inherit their entire estate. This is not always the case. How their property is divided depends on whether it is characterized as community property or separate property.  Whether the children of the deceased person are also children of their spouse comes into the distribution as well.  This often results in a lawsuit to determine heirship and appointment of an Administrator.  Dying without a Will is the least desired result.

Standard Probate of Wills:

Whether you have a handwritten or typewritten Will, its validity must be proved in court.  This procedure is known as probate, and it generally must take place within four years after death.

A Will that is not proved in court is denied probate.  In this event, the decedent’s property passes to his or her heirs as if he or she died without a Will.  Again, this further emphasizes how important it is to execute a Will which meets all legal requirements so that property will pass as the decedent wished.  After proving the validity of a Will, the next step in the probate process is the administration of the estate.

Independent Administration:

Texas is one of the states that provides for independent administration – administration free of court supervision.  This means that after an independent executor or administrator is approved and an inventory of estate assets is filed with the court, the executor or administrator can simply take care of the administration of the estate without any further court involvement or supervision.  The independent executor or administrator is free to settle with creditors, set aside the homestead and other exempt property, manage the property of the estate, sell assets for payment of debts or taxes, and distribute the remaining estate to those entitled to it.  Thus, independent administration avoids the costs and delays associated with a court-supervised estate administration in which the executor or administrator must seek court approval before performing any of these acts.

Muniment of Title:

If there is no need for the appointment of an executor or administrator and the only reason for probating a Will is to clear title to property, a Will can be admitted to probate as a muniment of title.  Under this procedure, there is no executor or administrator appointed.  It is a somewhat more simplified method of probating a will than the traditional formal administration.  It is generally used only when there are no debts of the estate to be paid and no other actions that require the appointment of an executor or administrator.

Small Estate Affidavit:

If the decedent died intestate, without a Will, then his estate may be resolved with a small estate affidavit.  If the value of the estate, excluding the homestead, exempt personal property, and nonprobate assets, does not exceed $50,000.00, no formal administration is necessary if the heirs file an affidavit with the court showing that they are entitled to receive the property of the estate.

The small estate affidavit is not necessarily limited to small estates, and may be a useful alternative to a formal administration in certain estates where, for example, the residence and nonprobate assets comprise the majority of the estate and the remaining assets are valued at less than $50,000.00.  Check with your estate planning or probate attorney to see if this is appropriate in your circumstances.

Informal Family Settlements:

Informal family settlements are permissible where the estate is small and consists only of personal property, such as personal effects and household furnishings, but generally not where the estate includes real estate, bank accounts, stocks, and bonds.  If a motor vehicle is involved, a new certificate of title may be applied for by filing an affidavit of heirship with the Texas Department of Public Safety.

As always, check with your attorney to decide which method of estate administration is right in your particular circumstance.  It could save you time and money.

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Yes, it is easier said than done, but consider a quick fact if you doubt the importance of this undertaking: According to some sources that study such things, state treasurers now hold over $32 billion (not million) dollars in unclaimed bank accounts and other such assets.

Then there is the prevalent problem of some large insurance companies failing to pay out unclaimed life insurance policies to beneficiaries, claiming that under the insurance contracts they are obligated to do so only when the beneficiaries come forward. When the beneficiaries are not even aware of the existence of the policies, obviously they do not come forward, and years of premiums may have been paid for nothing.

The take-away lesson is that it is just as important to keep estate planning documents well organized and in a safe place, known to and accessible by your heirs, as it is to properly execute the documents in the first place. Any virtue can become a vice if taken to extremes, so this does not mean holding on to every scrap of paper that could conceivably be of interest to those you leave behind. Nonetheless, to possibly save your heirs a significant amount of money, time, and stress, at least the essential documents should be kept together, such as with your attorney, in a safe-deposit box, and/or at home in a fireproof safe that someone can access when the time comes. Instructions on how to dispose of your estate will not mean much if you have not left instructions on how to find the controlling documents.

Essential Documents to Organize

So what are these essential documents that you should have well organized and accessible? Individual circumstances vary, but the first document for most people is an original will. Dying without a will means leaving the determination up to the state as to how your assets will be distributed, and if there is some writing, but not an original document, probate proceedings could become needlessly contentious and drawn out.

In addition to a will (and any trust documents), what follows is a nonexhaustive, but reasonably comprehensive, list of other important documents, the existence and location of which should be known to your heirs:

• Marriage license—A surviving spouse is likely to need it to prove that he or she was married to the deceased before being able to claim anything based on the marriage;
• Divorce papers;
• Durable health-care power of attorney (for health-care decisions if you are incapacitated), a living will, any do-not-resuscitate order, and an authorization to release health-care information;
• Durable financial power of attorney (for financial decisions if you are incapacitated);
• Documentation of ownership of property, including housing, land, cemetery plots, vehicles, stocks, bonds, etc.;
• Proof of loans made and debts owed;
• List of bank and brokerage accounts, with account numbers, and any safe-deposit boxes with the location of corresponding keys;
• Tax returns for the most recent three years;
• Life insurance policies and 401(k), pension, annuity, and IRA documents; and
• List of user names and passwords for Internet accounts.

With a little bit of foresight and planning, you can greatly reduce the administrative burden on your family and heirs after you pass, not to mention saving them time from having to discover and understand your affairs.

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Every year I learn a great deal that helps with the details of my practice.  However, sometimes the small lessons are the most beneficial.  For example, one of the things attorneys take for granted is that our clients understand the probate process and what is needed for probate.  I was reminded of this fact when, while probating an estate, a very inquisitive client asked about the probate process and so we spent some time reviewing the process so that she would better understand what was being done.  Therefore, in this week’s column, I thought I would review some of the  documents which are common in the probate of an estate.

Organization is critical for managing any estate.  Even for a modest and simple estate, there can be a considerable number of transactions and much correspondence.  For any estate, there is always the risk that a beneficiary or other person may question the actions of the executor.  Thus, the executor should take steps to organize correspondence and other paperwork, keep records of all financial transactions, calendar key deadlines and review checklists to monitor the progress of the estate settlement.

Assembling the documents.  One of the first steps any executor should take is to obtain and review, with legal counsel if necessary, all the pertinent legal documents that may affect the estate.

Living Will, health care proxy.  These may provide important information as to burial requests, funeral services and so on.

Powers of Attorney.  Powers lapse on death.  However, if a third party in good faith and without notice of death completed a transaction under the authority of the power of attorney, it may still be valid.  If any significant transactions were completed near the time of the decedent’s death, you may want to investigate them.

Will.  This document gives the executor instructions on how to distribute the estate.  The executor must follow, as far as legally possible, the wishes of the decedent expressed in the Will.

Revocable living trust.  If a revocable living trust exists, then the trust, in combination with the Will, should govern most transactions.  Be alert for any issues that may arise because of the use of two documents.  Generally, they are  not drafted in a style that is easy to read, much less understand.

Letter of instruction.  Any personal notes to provide guidance to you as to how the decedent would want you, as executor, and any trustees to handle matters can be quite helpful, even if not legally binding.

Inventory.   Not all estates are  required to file an inventory with the Court, however, preparing one is essential in making sure all the assets of the decedent have been accounted addressed.  The items necessary for preparation of the Inventory are as follows:

1. Copies of deeds to any real estate owned by the decedent as of the date of their death; copies of all mineral leases or royalty agreements; records of payments received during the preceding year for mineral leases or royalty agreements or 1099’s received for the preceding year;
2.   Copies of bonds, including Series E bonds, and stock certificates owned by the decedent and whether they had pay on death, beneficiary or survivorship designations;

3. Statements, checks, and deposits for the month of decedent’s death for each bank, savings and loan, or credit union checking or savings account, and copies of all certificates of deposit owned or held by them, and whether those accounts had pay on death, beneficiary or survivorship designations;
4. Statements for the month of the decedent’s death for any investment accounts, IRA’s or retirement accounts owned by them, and the pay on death, beneficiary or survivorship designations for those  accounts;
5. Copies of all notes, accounts, and judgments payable to the decedent;
6. Copies of the titles to any automobiles, boats, or other motor vehicles;
7. Copies of the declaration page and beneficiary designation on all life insurance policies;
8. Description or record of any other assets held by the decedent.

As I stated, there are certain criteria that, if the estate meets, then an inventory does not have to be filed and approved by the court.  However, bringing all of the above to your attorney will help verify that all assets have been accounted for and what steps need to be taken to transfer the assets.  I find it is a very good check and balance system.

If you are handling the estate of a loved one, then gather as much of the above information as you can and take it to an attorney who practices in the area of estate planning and probate.  They will be able to answer your questions and guide you  through the probate process.

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First let me define Probate.   Probate is the court procedure by which a Will is proved to be valid or invalid.  In current usage probate has been expanded to generally refer to the legal process by which the estate of a decedent is administered.  I should point out that a Will is not necessary for a person’s estate to go through the probate process.  It is the circumstances and facts related to a person’s estate that dictate whether the probate process is necessary.  Probate may not be necessary when the decedent’s estate is so small that no action is necessary to distribute the property to the beneficiaries or heirs.  However, probate is required in most other circumstances.

Estate administration involves the following steps:

1. Collection of the decedent’s assets;
2. Payment of debts and claims against the estate;
3. Payment of estate taxes, if any;
4. Determination of heirs, if the decedent died without a Will; and
5. Distribution of the remainder of the estate to those entitled to it.

In Texas, there are several different methods of administering an estate, some of the more common of which are discussed below.

Standard Probate of Wills:

Whether you have a handwritten or typewritten Will, its validity must be proved in court.  This procedure is known as probate, and it generally must take place within four years after death.

A Will that is not proved in court is denied probate.  In this event, the decedent’s property passes to his or her heirs as if he or she died without a Will.  Again, this further emphasizes how important it is to execute a Will which meets all legal requirements so that property Will pass as the decedent wishes.  After proving the validity of a Will, the next step in the probate process is the administration of the estate.

Independent Administration:

Texas is one of the states that provides for independent administration – administration free of court supervision.  This means that after an independent executor or administrator is approved and an inventory of estate assets is filed with the court, the executor or administrator can simply take care of the administration of the estate without any further court involvement or supervision.  The independent executor or administrator is free to settle with creditors, set aside the homestead and other exempt property, manage the property of the estate, sell assets for payment of debts or taxes, and distribute the remaining estate to those entitled to it.  Thus, independent administration avoids the costs and delays associated with a court-supervised estate administration in which the executor or administrator must seek court approval before performing any of these acts.

Muniment of Title:

If there is no need for the appointment of an executor or administrator and the only reason for probating a Will is to clear title to property, a Will can be admitted to probate as a muniment of title.  Under this procedure, there is no executor or administrator appointed.  It is a somewhat more simplified method of probating a will than the traditional formal administration.  It is generally used only when there are no debts of the estate to be paid and no other actions that require the appointment of an executor or administrator.

Small Estate Affidavit:

If the decedent died intestate, without a Will, then his estate may be resolved with a small estate affidavit.  If the value of the estate, excluding the homestead, exempt personal property, and nonprobate assets, does not exceed the statutory maximum, no formal administration is necessary if the heirs file an affidavit with the court showing that they are entitled to receive the property of the estate.

The small estate affidavit is not necessarily limited to small estates, and may be a useful alternative to a formal administration in certain estates where, for example, the residence and nonprobate assets comprise the majority of the estate and the remaining assets are valued at less than statutory maximum.  Check with your estate planning or probate attorney to see if this is appropriate in your circumstances.

Informal Family Settlements:

Informal family settlements are permissible where the estate is small and consists only of personal property, such as personal effects and household furnishings, but generally not where the estate includes real estate, bank accounts, stocks, and bonds.  If a motor vehicle is involved, a new certificate of title may be applied for by filing an affidavit of heirship with the Texas Department of Public Safety.

Always, check with your attorney to decide which method of estate administration is right in your particular circumstance.  It could save you time and money.

The post IS PROBATING A WILL REQUIRED ? appeared first on Moak & Moak, P.C. -Attorneys At Law.

In my office, we are long on both Probate and Life Experience.  Having focused my law practice on estate planning and probate, I have helped thousands with transferring their assets after a loved one passes (probate) and likewise I’ve guided thousands with drafting their estate planning documents to avoid issues and make the process simpler.  However, I also grew up in my father’s office under his sage advice, then dealt with his life altering injury, coordinated his care for over 10 years and his dealt with his death.  Safe to say, I’ve had pretty good experience dealing with some of life’s challenges.  For me, there was no guide.  However, Sally Balch Hume has written a book entitled  ABA/AARP Checklist for Family Survivors: A Guide to Practical and Legal Matters When Someone You Love Dies for those who need a guide.

Hurme’s checklists proceed from the funeral to probate, with discrete, manageable steps to organize information, assemble a team, apply for survivor’s benefits, survey debts and assets, clean out the house, and so on. Each checklist includes enough narrative to inform without overwhelming. The checklists encourage delegation, especially before the funeral, when there are more volunteers than tasks.

The book is not probate-centric. A widow may prefer to file income taxes and collect life insurance before meeting a lawyer. Hurme shows how to screen and select financial advisors and tax preparers. Nonprivate assets confound the lay person, but Hurme gently and thoroughly explains what may be collected with a death certificate. Chapter 11, Get Ready for Probate, is found at the end of the book, not the beginning.  The book strikes a sound balance between what the author, an accomplished lawyer, knows and what real people need to know.

I have resources to assist with IRA administration, but sometimes you need to drink from a garden hose rather than a fire hydrant.  Hurme outlines a 401(k) and IRA from the beneficiary’s perspective in two pages. Chapter 6: Learn What’s Available in Investments. That same chapter includes an introduction to stocks, bonds, and mutual funds that is very helpful in dealing with those assets. The discussion should but does not cross reference an equally helpful explanation of disbursements from 401(k) and individual retirement accounts in Chapter 4: Apply for Survivors’ Benefits.

Hurme is a model of clear, concise communication. She respects her readers, and also the professionals who serve them. She thoughtfully guides survivors through the things they can and should do own their own, and leaves them organized and ready for the attorneys, CPAs, and financial advisors who pick up where they must leave off.

Perhaps you are dealing with the loss of a loved one or you are beginning to put your estate plan together.  I encourage you to search Amazon for Hume’s book.  It will cost about $15, but the peace of mind it provides will be worth thousands.

Be Prepared When Someone You Love Dies

Of course all of these things must be discussed and planned for with your estate planning attorney, but Hume’s book will be a good primer.

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It is important to understand that there could be potential downsides to this decision and it’s crucial to consider your specific situation carefully to avoid these common beneficiary issues:

Outdated Beneficiary Choices

The most common disadvantage is failing to review beneficiary choices regularly to assess whether they still meet your requirements or adjust to any changes that have occurred in your life. For example, perhaps you designated your spouse as the primary beneficiary of your retirement accounts and other non-probate assets. However, if you go through a divorce and forget to change these designations, your ex-spouse could still end up with a significant portion of these assets.

Another example may be where new relationships develop that did not exist when you initially made beneficiary designations. For example, you have had more children or remarried. Should you fail to update your estate plan, you may inadvertently omit these loved ones from receiving a share of these assets when you really would have wanted them to receive something.

Failure to Name a Contingent Beneficiary

A related issue is failing to name secondary or contingent beneficiaries. What happens if you do not have a “backup” beneficiary? One of the main disadvantages is that an asset that could typically pass directly to persons outside of probate may now become an asset that has to be addressed through the probate process. This can create a long delay before those assets get to your loved ones.

Minor Beneficiaries

Disadvantages can also arise if you name a minor as a beneficiary and that person is still a minor when you die. If this happens, an insurance company or retirement administrator may not have a way to handle the situation. It would be unable to distribute the funds until it receives directions from a court, or the minor reaches the age of majority (age 18 in most states).

If you find the need to make adjustments to your beneficiaries, don’t hesitate to contact your certified financial planner or an attorney familiar with estate planning. They should be able to assist you in finding the most suitable solutions for your situation.

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Everyone should have a Will.  You may think this is just more fluff from an attorney trying to justify his existence.  However, our court system is full of lawsuits in which heirs are arguing over someone’s estate.  Many of these lawsuits are the result of someone dying without a Will and thus giving no direction on how his or her estate was to be divided.  This week I will point out some of the disadvantages of dying without a Will.

If a person dies without a Will, Texas law determines how his or her property is dispersed and to whom.  The public policy of statutes governing the intestate distribution of property is to provide for the orderly distribution of property at death.  Because one usually has an idea of how he or she would like his or her property to pass to others, undesired results can arise if he or she dies without a Will.  The law does not play favorites, so the distribution is by degree of kinship to the decedent, not by how close or wonderful one was to the decedent.  Dying without a Will may trigger undesired results such as the property not passing to the heirs as the decedent wished and unexpected costs and delays.

For example, very often one spouse may prefer to leave everything to the surviving spouse who will provide for and take care of the children, but this may not happen if there is no Will.  In families with “your, mine and our” children, the surviving spouse receives only his or her one-half share of the community property, including the family home; only one-third of any separate personal property; and, an estate for life in one-third of any separate real property(land).  The remainder of the property would pass to the decedent’s children.  If there is any animosity between, for example, the surviving spouse and the deceased spouse’s children by a prior marriage (who are now co-owners of property), conflicts or disputes may arise.  Surely this is not what the deceased spouse wanted.

Another example of unintended results of dying without a Will relates to the treatment of lifetime gifts to heirs.  Texas law presumes that a gift to an heir is not an advancement of his or her inheritance.  Just this week I helped  clients, the parents of two children, who have made a sizeable loan to one child  with the understanding that the loan is an advancement of his or her inheritance if not repaid.  If clients had died without updating their  Wills to address this, the estate would have been divided equally among the two children.  The child who received the loan would have in effect taken a much larger portion of the total estate.

If the most special people in a person’s life are not among those who would be his or her heirs-at-law, they will not share in the estate if he or she dies without a Will.  If an unmarried person dies without a Will, friends or companions will inherit nothing.  Thus, a devoted friend, who perhaps cared for the decedent for years, will not inherit property, no matter how unfair it might seem, unless the friend is provided for in the decedent’s will.  Also, without a Will, property cannot pass to a charitable organization, no matter how committed the decedent was to its purpose.

In Texas, there is no forced heirship.  In other words, a parent is not required to leave property to his or her children.  However, one cannot disinherit heirs if he or she dies without a Will.  Under the intestate distribution statutes, property may pass to undesired heirs instead of those the decedent would have chosen.

Securing the services of an attorney to help draft your Will and ensure that it is properly formalized, can help avoid confusion, hard feelings and a lawsuit in the future.

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The State of Texas recommends and has a promulgated form of legal instruments for someone who may need assistance due to the above circumstances. To provide for these situations there are five legal instruments everyone should have.  Formerly, there were only three.  These instruments are a Statutory Durable Power of Attorney, a Medical Power of Attorney (sometimes called a Power of Attorney for Healthcare), a Declaration of Guardian, a Directive to Physicians (or Living Will) and Disposition of Remains document.

The Statutory Durable Power of Attorney.  This instrument grants authority to a designated agent to manage the principal’s property on his or her behalf.  The powers given the agent should be based on complete trust and the agent must be selected carefully. The State of Texas has established a particular minimum suggested form for this instrument so that decisions concerning the management of property can be made without trouble.  However, the principal can chose to grant an agent one or more specific powers through a Specific Power of Attorney.  If the principal chooses to grant the agent the power to perform every act the principal could perform, if personally present, then it is called a durable power of attorney.  An important part of the durable power of attorney is the section that denotes whether the agent is to be reimbursed for expenses paid on the principal’s behalf and whether the agent is to be compensated for performing his/her role. Generally, an agent is prohibited from making gifts, so the ability to make gifts must be addressed as well.  In addition, the principal can elect to have the durable power of attorney become effective immediately upon signing it or only upon the principal’s future disability or incapacity.

The second type of power of attorney is the Medical Power of Attorney, sometimes called a Power of Attorney for Health Care.  This instrument grants the agent the power to make health care decisions for the principal if the principal is unable to make them.  Again, the agent must be selected carefully, based on complete trust.  The agent may exercise his or her authority only if the principal’s attending

Physician certifies that, in the physician’s opinion, the principal lacks the capacity to make health care decisions.  The principal can revoke the medical power of attorney at any time, regardless of the principal’s mental state.  The Power of Attorney for Health Care must be signed by two witnesses, neither of whom are:

1. the person designated as agent;
2. the principal’s health or residential care provider or an employee of a health or residential care provider;
3. the principal’s spouse;

4. the principal’s lawful heirs or beneficiaries named in his or her Will or a deed; or
5. creditors or persons who have a claim against the principal.

Another document usually considered along with the power of attorney is a Directive to Physicians and Family (or Living Will).  If you desire that your life not be artificially prolonged in the event of a terminal condition, you should consider signing a Living Will.  You should consult with an attorney and your physician to understand the full impact of the Living Will.

A Declaration of Guardian is an instrument allows you to select who you would want to manage your financial affairs and personal affairs if a court of law determines you are a danger to yourself and your property.  This instrument is beneficial in the event you are suffering from an illness (i.e., dementia) that prevents you from realizing your actions are dangerous to you and your estate/property.  You can not have your right to make decisions taken away without a court of law, but this instrument, if signed when you are of sound mind, lets you pick who would be able to make your decisions with regard to personal and estate/property matters if you had your right taken away.

Finally, a disposition of remains instrument is valid after your death.  It serves to communicate who you put in charge of the disposition of your remains (i.e.,selecting and releasing your body to a funeral home,  funeral arrangements).  This section is very important if there is a possibility family members may not agree on funeral matters. This can be a common problem in second marriages where the children and second spouse may not agree.

As I mentioned earlier, in Texas the form for a Durable Power of Attorney is prescribed by statute.  However, there are many versions of these instruments out there and all of them may not be valid in Texas.  Each of the above instruments must be properly executed, witnessed and notarized as prescribed by statute.  Therefore, you should consult an attorney if you are considering having any of these documents prepared.

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Probate may not be necessary when the decedent’s estate is so small that no action is necessary to distribute the property to the beneficiaries or heirs.  However, probate is required in most other circumstances.

Estate administration involves the following steps:

1. Collection of the decedent’s assets;
2. Payment of debts and claims against the estate;
3. Payment of estate taxes, if any;
4. Determination of heirs, if the decedent died without a Will; and
5. Distribution of the remainder of the estate to those entitled to it.

In Texas, there are several different methods of administering an estate, some of the more common of which are discussed below.

Standard Probate of Wills:

Whether you have a handwritten or typewritten Will, its validity must be proved in court.  This procedure is known as probate, and it generally must take place within four years after death.

A Will that is not proved in court is denied probate.  In this event, the decedent’s property passes to his or her heirs as if he or she died without a Will.  Again, this further emphasizes how important it is to execute a Will which meets all legal requirements so that property will pass as the decedent wished.  After proving the validity of a Will, the next step in the probate process is the administration of the estate.

Independent Administration:

Texas is one of the states that provides for independent administration – administration free of court supervision.  This means that after an independent executor or administrator is approved and an inventory of estate assets is filed with the court, the executor or administrator can simply take care of the administration of the estate without any further court involvement or supervision.  The independent executor or administrator is free to settle with creditors, set aside the homestead and other exempt property, manage the property of the estate, sell assets for payment of debts or taxes, and distribute the remaining estate to those entitled to it.  Thus, independent administration avoids the costs and delays associated with a court-supervised estate administration in which the executor or administrator must seek court approval before performing any of these acts.

Muniment of Title:

If there is no need for the appointment of an executor or administrator and the only reason for probating a Will is to clear title to property, a Will can be admitted to probate as a muniment of title.  Under this procedure, there is no executor or administrator appointed.  It is a somewhat more simplified method of probating a will than the traditional formal administration.  It is generally used only when there are no debts of the estate to be paid and no other actions that require the appointment of an executor or administrator.

The vast majority of estates in Texas are handled through Last Will and Testaments because of the ease of using the independent administration or muniment of title pathways.  This saves the family time and money in most cases.

Small Estate Affidavit:

If the decedent died intestate, without a Will, then his estate may be resolved with a small estate affidavit.  If the value of the estate, excluding the homestead, exempt personal property, and nonprobate assets, does not exceed $50,000.00, no formal administration is necessary if the heirs file an affidavit with the court showing that they are entitled to receive the property of the estate.

The small estate affidavit is not necessarily limited to small estates, and may be a useful alternative to a formal administration in certain estates where, for example, the residence and nonprobate assets comprise the majority of the estate and the remaining assets are valued at less than $50,000.00.  Check with your estate planning or probate attorney to see if this is appropriate in your circumstances.

Informal Family Settlements:

Informal family settlements are permissible where the estate is small and consists only of personal property, such as personal effects and household furnishings, but generally not where the estate includes real estate, bank accounts, stocks, and bonds.  If a motor vehicle is involved, a new certificate of title may be applied for by filing an affidavit of heirship with the Texas Department of Public Safety.

As always, check with your attorney to decide which method of estate administration is right in your particular circumstance.  It could save you time and money.

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