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.