Arlington probate attorney Charles Kennedy provides answers to some probate questions commonly asked by his clients:
REASONS TO PROBATE AN ESTATE
Probate is the process of determining ownership of property owned by a person who died. The simplest method is to submit a Will signed by the person who died (Decedent) to be accepted by the Court as valid. This is usually a fairly simple process. If there is no Will then the process is more complicated. See What is an Estate Administration?.
Probate is done for a number of reasons including:
Proving ownership i.e., transfer of title to real estate, bank accounts or other property that is identifiable by an account or deed;
Using the probate process to eliminate creditors or
Setting aside assets for protected owners. Protected owners include surviving spouses and minor children. There are several motions that can be filed to protect assets that are exempt from creditors for protected owners. Homesteads can be set aside for the benefit of protected owners. If there is no homestead then the personal representative can instead set aside funds in lieu or exempt property. The personal property that is classed as exempt under the Texas Property Code can be set aside. An individual can protect $30,000.00 and a family can protect up to $60,000.00 of personal property.
It is even possible to sell or use non-exempt assets to set aside cash or assets in place of exempt assets that are not owned by the Surviving Spouse or minor children.
An estate can be probated without appointment of a personal representative. If there is a Will the representative is called an Executor, usually an Independent Executor. If there is no Will the person appointed will be an Administrator. A Court will require the appointment of an Administrator if there is more than one mortgage or any unsecured creditors or secured creditors on personal property. Sometimes the best option is to do nothing. These are complicated issues, if you would like to discuss what can be done I usually do not charge for an initial conference for persons needing to probate an estate.
Foreclosure and Probate
A creditor is permitted to take back property that was purchased using funds provided by a creditor. The creditor must follow State law and the contract between the purchaser and lender. This information is provided in the Deed of Trust filed in the Deed Records of the County in which the real estate is found. One of the requirements to legally foreclose on a house is that the creditor must give notice of intent to foreclose in writing to the borrower.
If the foreclosure occurs after a person dies and before an estate administration is opened Texas law permits the foreclosure to be set aside in a dependent administration. The administrator of the estate must file a lawsuit to set aside the foreclosure. The administrator will be given six months to sell the property and pay off or refinance the mortgage. As part of the process the mortgage lender must file with the administor and the Court a sworn claim setting forth the contract and all charges and payments. The administrator, as in all claims, can accept the claim or deny the claim in part or in whole. The procedure is substantially different in certain respects in a dependent administration than in an independent administration.
Creditors are supposed to be given notice of a probate administration being opened. Probate Law requires that if an estate is probated there must be an administration opened if the estate probate is filed within four years of a persons death.
As mentioned above, there are two types of estate administrations: Dependent and Independent Administrations. A dependent administration requires most actions be approved by the Judge before it can be done. This creates more expense and prolongs the time required to probate the estate. The benefit of this more complicated process is that assets can sometimes be set aside and protected from creditors and that creditors must go through a more complicated process in order to collect the amount the creditor claims is due.
In general my comments below pertain only to liquidated claims. Unliquidated claims should be filed as a lawsuit without presentment.
In each type of administration a secured creditor must given written notice that the estate has been opened. Unsecured creditors are to be given permissive written notice. It is good practice for the Administrator to give such a notice, but not required.
Creditors must filed a sworn claim with the Court Clerk in a Dependent Administration. The Administrator must accept or deny the claim within 30 days or it will be treated as denied.
An unsecured claim is barred if it is not presented within 120 of being given notice.
I am leaving out a huge amount of detail regarding claims. This is an extremely complicated area of law and legal advice should be obtained as to what should be done as any to particular claim.
As of 2017 a personal representative must obtain the return of non-probate assets if needed to fund the payment of Estate creditors on demand of a creditor.
DO I NEED TO PROBATE MOM’S WILL?
The most common question I hear from clients is "do I need to probate Mom’s (Dad’s) will?" Until I obtain more information, I can only answer “maybe” or “I don’t know”. Texas provides many possible solutions to transfer of title to property after death.
The answers to the following questions should help you understand what information an attorney may need to advise you and what an attorney may say to you.
WHY WOULD I WANT TO PROBATE A WILL TO OBTAIN LETTERS OF ADMINISTRATION OR LETTERS TESTAMENTARY?
These letters are granted to the person who qualifies at a Probate Court hearing to collect the property and manage the property of the Decedent (person who died leaving property). Common uses of administration are to:
set aside assets for the spouse and children to use instead of paying creditors,
appoint a person to deal with the tax authorities,
to obtain reimbursement for the costs of funeral, expenses of last illness, and/or of administration for the applicant from the other family members out of the estate property,
sell property more efficiently.
Quite often a bank or insurance company will tell you that it will only give information or property to a person with Letters Testamentary. A Letter Testamentary is the document a Court gives the executor to show the world that he is empowered to act as executor.
WHAT IS MUNIMENT OF TITLE?
If there are no debts to pay or any other need to empower the executor to gather assets or represent the estate one option is to present the Will to the Court to approve as valid. Upon acceptance by the Court the Will is entered into the Probate Records of the County. Certified copies of the Will and Order are sufficient to pass title to probate property. This process is called Probate of Will for Muniment of Title. Out of state banks, insurance companies and brokerages sometimes do not understand this procedure and can be difficult to work with in this type of situation. Normally a short letter and a copy of the Estates Code Section on point is enough to persuade the attorney for the Bank to deliver the property to the named beneficiaries.
WHAT IS A SMALL ESTATE AFFIDAVIT?
A small estate affidavit is an affidavit signed by each heir and two witnesses not in the direct line of descent. The affidavit may pass title to probate property of up to $100,000.00 in value, not including the value of the homestead in the value limitation. Do not confuse this document with an heirship affidavit. The small estate affidavit is filed with a Probate Court and the Court enters an Order Approving the Affidavit.
WHO OR WHAT IS AN HEIR?
“Heir” and “heirship” are legally defined words. The meaning of heir is those persons who take under the laws of descent and distribution. There are several statutes in Texas concerning heirship. Unless the decedent is survived by a spouse and only children of the decedent and the surviving spouse it gets complicated. If only the spouse and children of that marriage survive the spouse keeps her one-half of the estate and the children inherit the rest of the community property. If there is also separate property, a different statuate controls. The spouse receives a one-third interest in the real estate for life and the children of the spouse who died share the remaining portion equally. This is a simple explanation of the statute which deals with even more complex situations. As to the separate property the wife or husband receives a one-third life estate in the land and a one-third interest in the personal property; the children split the rest equally.
One common effect of passing property by heirship is that your attorney gets to make much more money than if the person had a properly drafted will.
WHAT IS AN AFFIDAVIT OF HEIRSHIP?
This form of affidavit is commonly used to pass title to land at closing on the sale. An Affadavit of Heirship is normally drawn up by the attorney for the title company.
WHAT IS PROBATE PROPERTY?
The best answer is that all property is probate property except that property which passes by contract or survivorship. There are four types of contract that frequently pass title to property: life insurance, bank accounts, brokerage accounts and pension, IRA or 401(k) contracts.
WHAT IS SURVIVORSHIP PROPERTY?
The Texas Estates Code defines “survivorship” and how to pass property by survivorship. Basically, it is property that passes by contract to the “survivor” of the named parties to an account (IRA, bank, brokerage, life insurance, etc.). A common survivorship property is a bank account that contractually passes by survivorship. DO NOT ASSUME A JOINT ACCOUNT IS SURVIVORSHIP PROPERTY. It must have the legally required survivorship language in the contract and be clearly accepted by the owners of the account. Many banks have survivorship agreements that do not meet the requirements of the statute. Some forms of survivorship property are more common in “common law” states than in “community property” states like Texas.
What happens if the estate has more than $100,000.00 in probate assets, not including the homestead, or has more than one creditor and there is no properly drafted will?
Someone will need to apply to the Court to determine the heirs and possibly for an administration. The Court will appoint an independent attorney (called Attorney Ad Litem) to represent any minor heirs and the unknown heirs. The current fee of $400.00 for the attorney ad litem must be paid at the time the application is filed in addition to the filing fee. At the hearing the applicant will need to present two witnesses as to the family history of the decedent who can on personal knowledge testify as to who are the children and surviving spouse, if any, of the Decedent. Testimony about the existing property in the estate must also be provided to the Court. This hearing can be and often is combined with the hearing regarding the need for an administration and appointment of the administrator.
DO I HAVE TO HIRE AN ATTORNEY?
Most Probate Courts will not permit an individual who is not licensed as an attorney to represent anyone else. If the proceeding is an heirship proceeding or if there is any beneficiary named in the Will to receive property other than the applicant the Court will normally find the applicant is attempting to practice law without a license. You have a right to represent yourself, but no one else. If the surviving spouse takes all if she survives, then she can be the applicant even if her children would receive property under the Will if she had not survived their father.
HOW MUCH WILL IT COST?
Cost of the attorney fees will vary regarding the situation and who you hire. Unless there is a dispute among the family members I can normally quote a set fee for all services (called a flat fee). The table below sets forth my common charges, which may vary based on the complexity of the issues involved.
All attorney fees are in addition to major expenses, such as the court filing fees. There is a mandatory $400.00 fee to pay the attorney appointed to represent any unknown heirs or minor children in heirship proceedings. Any and all of the court fees are subject to change, as are my fees.
Probate of Will, Independent Administration $1750.00 (The number of creditors may increase my fee)
Determination of Heirship $2,500.00 Costs will include attorney fee for unknown or minor heirs and court filing fees
Determination of Heirship w/ Administration by agreement of all parties $3,500.00 minimum
Dependent Administration $2,500.00 minimum (this is an estimate of my fee based on hourly rate of $275.00)
Let an experienced Probate attorney help you with all of your life planning legal needs. Mr. Kennedy serves clients in Dallas, Fort Worth, Arlington, Mansfield, Grand Prairie, and all surrounding areas in Tarrant and Dallas Counties.
HOW LONG DOES PROBATE TAKE?
Probate is the process by which a court enters a will into the court record or determines who will inherit property if no will exists. Probate will require at least one court appearance before a judge by an estate representative. Notice periods, or time to contact any person who may be involved in the distribution of an estate, are required, including creditors and beneficiaries. In Texas an administrator is required to provide notice of the administration to known creditors. The creditors have four months to file their claims with the administrator or court after notice in a dependent administration. The time needed to probate an estate will vary; usually requiring an average of six months to a year. If there are no debts owed, property is frequently distributed much sooner. Frequently all property passes to the surviving spouse and the will is admitted to establish title only, with no formal administration of the estate.
The regulations governing fees and probate judgments vary from state to state and are complex. In Texas the filing fee for beginning the process is less than $300.00 in most instances. The attorney fees can vary widely depending on the service provided and who is hired. The attorney should be willing to provide a written agreement setting forth how the fee will be computed. For more information about wills and estates consult a licensed attorney.
WHAT IS THE DETERMINATION OF HEIRSHIP?
Determination of Heirship is the Probate Court process used to prove who are the heirs of a person who died without a Will.
The process begins with a form filed with the Probate Clerk in the county of residence called an Application to Determine Heirship. If the only need is to establish ownership the process stops on Judgment. The Application informs the Court who the heirs are, what assets are in the estate and other required information. An attorney whose purpose is to represent unknown heirs and any minor heirs are appointed by the Court. This attorney is called an Attorney Ad Litem (AAL).
The AAL will begin by filing an Answer and then contacting the two disinterested persons who know about the family history of the Decedent provided by the Applicant's attorney. The AAL will proceed with the investigation as needed. Once the AAL files his or her report with the Court a hearing is held to present the witness and Applicant testimony. At the end of the hearing, the Judge will sign and enter an Order that is often called a Judgment making findings as to the identity of the heirs of the person who died.
If an administration is needed due to the existence of creditors or to collect assets a person called an Administrator will be appointed. Usually, the Applicant is appointed in this role. This process is discussed further in other sections at these links:
*The Information provided in this website by Arlington elder care attorney Charles Kennedy is meant to be general in nature, not as advice for the exact circumstances you may face.