§ 4.1 Probate

Probate and Estate Administration in Texas

Texas probate has a reputation problem it does not deserve. Most of the horror stories circulating about probate come from states with mandatory court supervision and percentage-based fees. Texas offers independent administration, and in the ordinary case that makes the process comparatively quick, inexpensive and undramatic.

The governing law is the Texas Estates Code, which replaced the Probate Code in 2014. Probate is handled by statutory probate courts in the larger counties and by the county court at law or the constitutional county court elsewhere; the Texas Judicial Branch site identifies the court for a given county.

What probate is for

Probate does three things: it establishes that a will is valid, or that there is none; it appoints someone with legal authority to deal with the deceased's property; and it provides an orderly process for paying creditors and distributing what remains.

Not everything passes through it. Property held with a right of survivorship, accounts with payable-on-death designations, life insurance and retirement accounts with living named beneficiaries, and property in a funded living trust all pass outside probate by their own terms. An estate consisting entirely of such assets may need no probate at all — though a small estate is not automatically a simple one, and creditors' claims can still arise.

Independent administration

This is the feature that makes Texas different. Where a will appoints an independent executor and directs that no action be required in the probate court beyond proving the will and filing an inventory, the executor is appointed at a single hearing and thereafter administers the estate without court supervision. No permission to sell property. No approval of each distribution. No annual accountings.

Independent administration is also available where there is no will, or where the will did not provide for it, if all the distributees agree and the court finds it in the estate's best interest. The alternative — dependent administration — requires a bond, court approval for essentially every act, and periodic accountings. It costs several times as much and takes far longer, and it exists for estates with genuine conflict, insolvency or an administrator who should not be trusted alone.

The practical lesson for anyone drafting a will is that a single clause determines which of these two experiences the family has, as noted on the core documents page.

The lighter procedures

Muniment of title. If there is a valid will and the estate has no unpaid debts other than those secured by real property, and Medicaid has no recovery claim, the court may admit the will as a muniment — a document of title — without appointing any personal representative at all. The order itself transfers title, and an affidavit of compliance follows within six months. It is inexpensive and fast, and it is one of the most useful and least known procedures in Texas probate.

Small estate affidavit. Where there is no will, the estate's assets excluding the homestead and other exempt property fall below a statutory ceiling, and the estate is solvent, the distributees may file a sworn affidavit instead of opening an administration. The requirements are exacting — all distributees must join, and two disinterested witnesses must swear to the family history — and courts apply them strictly.

Affidavit of heirship. Not a court proceeding at all: a sworn statement of family history, signed by disinterested witnesses and recorded in the real property records, used to establish a chain of title. Title companies vary in whether they will accept one, and it does not bind anyone who was not a party.

Dying without a will

Texas intestacy rules distribute an estate by formula, and the formula surprises people — particularly in a community property state with a blended family.

For community property, the surviving spouse takes the whole if all of the deceased's children are also the surviving spouse's children. But if the deceased had a child from another relationship, that child's share of the deceased's half passes to the children rather than the spouse. A surviving spouse can therefore find themselves co-owning the family home with a stepchild.

For separate property, personal property is divided between spouse and children in statutory shares, and real property passes to the children subject to a life estate in a fractional share for the spouse — an outcome that is workable on paper and frequently unworkable in practice. Determining heirs where there is no will requires a formal heirship proceeding, with an attorney ad litem appointed to represent unknown heirs, and it is more expensive than probating a simple will would have been.

Deadlines

A will must generally be offered for probate within four years of death. After that it cannot ordinarily be admitted to full probate, though it may sometimes be admitted as a muniment of title if the applicant was not in default. Families that put the paperwork aside during grief and rediscover it years later face precisely this problem.

Other deadlines run through the administration: an inventory, appraisement and list of claims within ninety days of appointment, unless an affidavit in lieu is filed where permitted; notice to beneficiaries within sixty days; published notice to unsecured creditors within one month; and permissive notice to known unsecured creditors which, if given, starts a limitation period on their claims.

What the executor actually has to do

Locate the will and file the application. Attend the hearing and take the oath. Obtain letters testamentary, which are the proof of authority every bank and title company will ask for. Secure the property — change locks, maintain insurance, protect anything perishable or portable. Open an estate account and obtain a taxpayer identification number. Inventory the assets and value them as at the date of death. Notify beneficiaries and creditors as required. Pay valid debts in the statutory order of priority, which matters greatly if the estate cannot pay everything. File the deceased's final income tax return and any estate return required. Distribute what remains, obtaining receipts.

An executor is a fiduciary and can be held personally liable for mishandling the estate. Two errors are especially common: distributing to beneficiaries before creditors are dealt with, and paying claims in the wrong order — including paying a Medicaid estate recovery claim in full when it ranks behind other claims and may in any event be subject to waiver, as the estate recovery page explains.

Most Texas probate is genuinely straightforward. It becomes difficult when the will is unclear or contested, when the family is in conflict, when the estate is insolvent, when a business must be operated or sold, or when property lies in another state. In those cases the cost of counsel is trivial against the cost of getting it wrong, and Texas requires a personal representative acting for an estate to be represented by an attorney in any event.