Estate Planning and Probate Law

ESTATE PLANNING

Last Will and Testament. It's important to have a Will. A Will allows for your property to disposed of in accordance with your wishes, and allows you to designate the person you want to act as the Executor of your estate. It gives you the opportunity to specify that your estate is be handled through independent administration, the easiest and least expensive method of probate administration. A Will also typically provides that a trust be created in the event that some of your property is received by someone who is a minor; this type of trust is a much less expensive alternative to the guardianship that might otherwise be required for the minor. In the event that you have minor children, a Will allows you to designate the person you would want to be appointed to be the children’s guardian after your death.   


Revocable Trust (also known as a Living Trust). Revocable trusts can be very helpful in some situations. A revocable trust allows you to avoid probate and speed up the distribution of estate assets; if out-of-state property is owned, it allows you to avoid ancillary probate for that property. It can also be helpful in cases of older individuals who are concerned about their mental abilities in the future. On the other hand, a revocable trust doesn’t save on income taxes, doesn’t avoid gift or estate tax liability, and doesn’t protect assets from creditors. 


Statutory Durable Power of Attorney. This document allows you to name a person you trust (known as an agent) who would be able to handle your financial, banking, legal, and business matters, such as paying bills, filing insurance claims, and writing, depositing, and cashing checks, if you are not able to, for example, if you leave the country, or suffer from a medical condition which leaves you unconscious or otherwise unable to. You can choose whether to make the power of attorney effective on the date that you sign it, or only upon your disability or incapacity.  You can also name an alternate agent in case the first person designated can’t serve as agent.  


Medical Power of Attorney. The Medical Power of Attorney allows you to name an agent and alternate who would make health care decisions for you if you are not able to make them yourself. You can also name an alternate agent in case the first person designated can’t serve as agent.  


Directive to Physicians and Family or Surrogates (also known as a Living Will). The Directive to Physicians and Family or Surrogates requires your health caretakers to obey your wishes about medical treatment at some time in the future when you are unable to make your wishes known because of illness or injury.   


Steve provides a number of other types of estate planning documents as well, so please let us know if you're interested in something not listed here.


PROBATE LAW

The period after the death of a loved can be a confusing and difficult time. We're here to help. There are a number of different probate procedures in Texas. The one that’s right for your situation depends on the case – but here’s the starting point: if the decedent died with a Will, look at the very next section. On the other hand, if the decedent died without a Will, skip down to the section below called “When There’s Not A Will” to find out your options.  


When There’s A Will -  

Independent Administration. The most commonly-used probate procedure when someone has died with a Will is called independent administration. In Texas, independent administration is a streamlined and cost-effective approach to probate. It’s much quicker and less expensive than the probate process in many other states.  In independent administration cases, the person who was designated in the Will as executor is responsible for identifying and collecting property owned by the decedent, dealing with creditors and taxes, and distributing the remaining property to the beneficiaries – all with minimal court supervision.   

The following is a description of the typical steps in an independent administration case: The Will and application to probate the Will are filed with the court in the county in which the decedent lived. A hearing is held so that the court may admit the Will to probate and issue the paperwork authorizing an executor or administrator to act on behalf of the estate (this paperwork is referred to as Letters Testamentary).  The decedent’s creditors and beneficiaries are notified of the probate proceeding. All of the decedent’s property is located and collected. A list of this property is compiled into a document called the Inventory, Appraisement, and List of Claims. In most cases, a copy of this document is then sent to the beneficiaries, and an affidavit is filed with the court confirming that the Inventory, Appraisement, and List of Claims has been completed.  Any property required to be sold in order to pay the estate’s creditors is sold, and claims against the estate are paid or otherwise resolved. Any taxes owed by the estate are paid.  The remaining property is then distributed to the beneficiaries. In most cases, that’s it. 


Muniment Of Title. Muniment of Title is the name of another frequently used procedure when the decedent died with a Will. It’s relatively quick, and is designed for situations where the deceased died with a Will, had no debts or unpaid bills (except for a mortgage, home equity loan, or other debt where there’s a lien on real estate owned by the deceased), and where there’s no need for an administration of the estate. It’s often used when there are just a few assets in the estate, such as a house and a vehicle.  Note: Even if the deceased did have debts or unpaid bills, the Muniment of Title procedure can still be used, as long as the debts and bills are paid before the court papers are filed. (Except for a mortgage, home equity loan, or other debt where there’s a lien on real estate owned by the deceased, which don’t have to be paid before filing.)  


Here's a partial list of reasons that it would be necessary to administer an estate: (1) to reimburse someone from the estate for the costs of the funeral, (2) to sign a contract on behalf of the estate, (3) to partition estate assets among the beneficiaries/heirs, (4) to protect exempt property from creditors' claims for a surviving spouse or children, or (5) if there are financial institutions that will only release funds in the decedent's account to a court-appointed administrator or executor.


When There’s Not a Will -  

Proceeding to Declare Heirship.   This procedure is designed for situations where the decedent had no debts or unpaid bills (except for a mortgage, home equity loan, or other debts where there’s a lien on real estate owned by the deceased), and where there’s no need for administration of the estate. In this type of proceeding, a court hearing is held in which the identity of the decedent’s heirs is proved, and a court order is then issued stating the share of the decedent’s property that each heir is entitled to. Note: As with the Muniment of Title procedure described above, even if the deceased did have unpaid debts or bills, the Proceeding to Declare Heirship can still be used, as long as the debts and bills are paid before the court papers are filed. (Except for a mortgage, home equity loan, or other debt where there’s a lien on real estate owned by the deceased, which don’t have to be paid before filing.) 

So how is the decedent’s property distributed when there’s no Will? Texas law spells out the requirements. 


Independent Administration by Agreement. This procedure combines a Proceeding To Declare Heirship with an Independent Administration of the estate. It’s used when there’s no will, but there is a need for administration, and all of the heirs are in agreement regarding the person who is to be the independent executor of the estate (actually called the “independent administrator” in this procedure).  At the end of the administration, the decedent’s property is inherited according to the distribution plan created by Texas law, unless the heirs all agree to some other distribution. 


Small Estate Affidavit.  This procedure is designed only for certain specific situations where the decedent didn’t have a Will, and the total value of the decedent’s property is very limited: $75,000 or less, not including the deceased’s homestead, if he or she owned their homestead. If there are any debts owed by the deceased, they have to be paid off in connection with the approval of the affidavit (other than a mortgage, home equity loan, or other debt where there’s a lien on real estate owned by the deceased). In addition, the decedent’s unpaid debts and bills cannot total more than the total amount of his or her assets and, the procedure can’t be used where the deceased owned any real estate other than his or her home.  


Important: If the decedent has money in a bank account or CD, and if you’re going to be using the (1) Muniment of Title, (2) Proceeding to Declare Heirship, or (3) Small Estate Affidavit procedure, you should first check with the bank to make sure that they’ll transfer the money if one of these procedures are used – many banks will, but some won’t. If not, a different probate procedure may have to be used instead.  


Non-Probate Property. It’s also important to know that many types of property are transferred to the beneficiaries directly, without the need of any court involvement at all, and whether or not there’s a Will. Property that passes in this way is referred to as non-probate property.

 

Have questions about setting up an estate plan for you, your spouse, or partner? Need help after the passing of a loved one? Call to set up a free no-obligation appointment today!