Published October 30, 2020 by Shane Kersh

Texas Probate Options

People die WITH Wills (testate) and WITHOUT Wills (intestate)

My analysis always starts with - Is there a Will or not?

When someone dies WITH a Will (testate) options:

• Muniment of Title
• Independent Administration
• Dependent Administration
• Affidavit of Heirship

Muniment of Title

• What is it?
  • Muniment of Title is a legal term for a document, title, deed, or other evidence that indicates ownership of an asset.
  • In Texas, a court may admit a Will to probate as a muniment of title if the court is satisfied that the Will should be admitted to probate and the court:(1)is satisfied that the testator's estate does not owe an unpaid debt, other than any debt secured by a lien on real estate; or (2)finds for another reason that there is no necessity for administration of the estate.
• Benefits
  • Faster and cheaper: Avoid the formal process of an administration (no executor or administrator necessary)
  • Perfect for when you only need to change title of property over to the beneficiaries named in the Will
• How does an estate qualify?
  • The estate must have NO debts (including no Medicaid claim) other than those secured by real property (mortgages, property taxes, etc.)
• How does it work/Process?
  • Application is filed by interested person (usually the named executor/alternate executor or beneficiary)
  • Simple hearing to admit Will (no executor is appointed…the Will is evidence of ownership and can be presented by any beneficiary as proof of ownership)
  • Order certified copy of Will and order admitting Will
• Bottom line:File certified copies of above in real property records where property located AND/OR present certified copies of above to people/institutions in custody of estate money or assets.

Independent Administration

• What is it?
  • Contrast from Muniment of Title: Here, there is a reason a representative (executor) needs to be appointed in order to identify, collect, administer and distribute (including to creditors) the estate.
  • The executor (or alternate executor) is appointed in the Will and nominated to serve independent of court supervision and without the necessity of a bond (the default in Texas is a dependent administration, as discussed below).
  • Process:
    • Application filed by Executor
    • Executor in Will gets appointed at simple hearing and Will gets admitted
    • Executor takes/signs oath
    • "Letters Testamentary" are issued, giving the Executor the documentation needed to show authority
    • Creditors get notified
    • Beneficiaries get notified
    • Inventory gets filed
    • Executor's role is to collect assets, pay debts, manage affairs, then ultimately distribute assets
  • Bottom line:The executor will have the authority to pay debts, gather, sell, distribute estate property after the oath is administered and the executor receives Letters Testamentary.

Dependent Administration

• Default in Texas is dependent.
• "Letters of Administration" instead of "Letters Testamentary"
• Process:
  • Same as above, but in order to manage affairs, the dependent administrator must file an application with the court before doing anything…like selling personal property or real estate and approving/paying claims.
  • Administrator must be bonded to cover all liquid assets of the estate
  • Administrator must make and file annual accountings
  • Also, must file a final accounting and formally close the estate once completed
• Why?
  • Will made the administrator dependent (keep things in check)
  • Will failed to properly make the executor independent and all beneficiaries couldn't agree.
• Bottom line:The administrator will have authority to do same as independent administrator after the oath is administered and the administrator receives Letters of Administration; however, this is just the first step…the administrator must get court to authorize and confirm all acts of the administrator.

Affidavit of Heirship

• What is it?
  • An affidavit that outlines the family and marital history of a deceased owners of real property that is filed in the real property records of the county where the property is located
  • Need 3 affiants:usually 1 heir and 2 disinterested witnesses that know and can establish their knowledge of decedent's family and marital history.
  • It is merely evidence of ownership until on record for 5 years (although not that way in practice)
  • Can be used even if there is a Will that has not been probated.
• Bottom line:Only good for real property (can't use this to access bank account, for example)

What if there is not a Will?

Intestate:

Decedent did not have a Will, did not have a valid Will, or the Will does not properly dispose of all assets

The state of Texas determines where the Decedent's assets go (laws of descent and distribution – taking into account the character of property (Community vs. Separate).

When someone dies WITHOUT a Will (intestate) options:

• Small Estate Affidavit
• Affidavit of Heirship
• Proceeding to Declare Heirship
• Independent Administration
• Dependent Administration

Small Estate Affidavit

• What is it?
  • Affidavit filed in probate court, approved/signed by judge, then recorded in the real property records (as well as the county probate records)
  • For use when a Decedent's estate is small (less than $75,000, exclusive of homestead and exempt property)
  • Only passes homestead real property
  • If more real estate, then must file affidavit of heirship for each additional property
  • Perfect method for obtaining financial account funds or other assets as long as the total assets do not exceed $75,000.
• Requirements:
  • No Will
  • Assets, not including homestead and exempt property, do not exceed $75,000
  • No administration created or pending
  • Liabilities do not exceed assets
  • Must list bank accounts, retirement accounts, etc. (if applicable), vehicles, etc.
  • ALL heirs/distributees must sign + 2 disinterested witnesses
• Bottom line:Can be useful for surviving spouse situations; only useful for homestead property and if decedent had other assets heirs needed to access.All heirs must sign at closing.

Affidavit of Heirship

• What is it?
  • An affidavit that outlines the family and marital history of a deceased owners of real property that is filed in the real property records of the county where the property is located
  • Need 3 affiants:usually 1 heir and 2 disinterested witnesses that know and can establish their knowledge of decedent's family and marital history.
  • It is merely evidence of ownership until on record for 5 years (although not that way in practice)
  • Can be used even if there is a Will or no Will
  • Requirements:Affiant signs in front of a notary + 2 witnesses
• Bottom line:Only good for real property (can't use this to access bank account, for example)

Proceeding to Declare Heirship

• What is it?
  • Judicial determination of who Decedent's heirs are
  • Filed in a Court with probate jurisdiction, Judge appoints an attorney to represent missing/unknown heirs (applicant pays for this attorney), all heirs are served (formally given notice), and hearing is held
• Why not just do Affidavit of Heirship or Small Estate Affidavit?
  • Have an asset that is not covered by Affidavit of Heirship
  • Distributee/heir will not sign Affidavit of Heirship or Small Estate Affidavit
  • Assets exceed $75,000
  • Missing heir or unknown heir
• Costly (applicant pays the attorney appointed to represent missing/unknown heirs + other costs)
• May also need to be done in conjunction with Independent or Dependent Administration
• Bottom line:The declared heirs will be the owners of all estate property.

Independent Administration

• Same as above, but situation where there is no Will, so do not use the term "executor" – use "administrator" instead.
• If all heirs are known and accounted for, they may all agree on appointing an Administrator and can request that person be Independent of Court supervision (as opposed to dependent).
• Situation where a figurehead, i.e., the administrator, is needed to conduct business on behalf of an estate (when an order declaring heirship alone will not suffice)
• Administrator's role is to collect assets, pay debts, manage affairs, then ultimately distribute assets.

Dependent Administration

• Same process as dependent administration above, but happens when all heirs cannot agree (or all heirs are not accounted for or there is a minor heir) on an independent administrator.
• Administrator still has to be bonded, seek permission from court to conduct business, file accountings, and formally close the estate upon completion.

Published October 30, 2020 by Shane Kersh

Pearland Probate Attorney

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