Probate FAQ

First of all, if you are interested in the topic of probate, that means you have lost a loved one.  Please know that we are genuinely sorry for you loss!  You are likely dealing with a lot of difficult issues and we hope that we will be able to assist you as you go through the process of addressing the legal matters that must be resolved.

Probate is a legal process that takes place after someone dies. It includes:

• proving in court that a deceased person’s will is valid (usually a routine matter, especially if the will was “self-proved”)
• identifying and inventorying the deceased person’s property
• having the property appraised
• paying debts and taxes, and
• distributing the remaining property as the will (or state law, if there’s no will) directs.  (Technically, if there is no will, there is not a “probate”; instead, you have an “administration” of the decedent’s estate.)

Typically, probate involves paperwork and court appearances by lawyers.  The lawyers and court fees are typically paid out of the estate’s property, which would otherwise go to the people who inherit the deceased person’s property.

How Does the Probate Process Work?

Probate usually works like this: After your death, the person you named in your will as executor — or, if you die without a will, the person appointed by a judge — files papers in the local probate court.  The original copy of your will is filed with the court.  In the Panhandle, the proper court is the Constitutional County Court.  In major metropolitan areas, there are established probate courts that only deal with probate matters.

At the probate hearing, the executor proves the validity of your will and presents the court with lists of your property, your debts, and who is to inherit what you’ve left. Then, relatives and creditors are officially notified of your death.  (The notification is made by placing an ad in the local newspaper.  Creditors pay people to watch for those ads, so that they can file claims in the estate and get paid.)

Your executor must find, secure, and manage your assets during the probate process, which commonly takes a few months to a year. Depending on the contents of your will, and on the amount of your debts, the executor may have to decide whether or not to sell your real estate, securities, or other property.

For example, if your will makes a number of cash bequests but your estate consists mostly of valuable artwork, your collection might have to be appraised and sold to produce cash. Or, if you have many outstanding debts, your executor might have to sell some of your property to pay the creditors.

Texas provides a means for immediate family members to ask the court to release short-term support funds while the probate proceedings continue. Then, eventually, the court will grant your executor permission to pay your debts and taxes and divide the rest among the people or organizations named in your will. Finally, your property will be transferred to its new owners.

Does All Property Have to go Through Probate When a Person Dies?

No. Texas has some simplified probate procedures that are available, but in every instance the involvement of the court system is required.   One exception would be an elderly person who owned no real property or bank accounts and only had personal property left.  There would not be a need to do a probate for that person.  Texas also used to require that to change the title to a car, you had to do a probate.  They have changed this law, however, so you can simply change a car title if that is the only asset in the estate.

In addition, property that passes outside of your will — say, through joint tenancy or a living trust — is not subject to probate.   So, if you have a bank account that is set up in your name and the name of your spouse, it is likely set up as being joint tenancy “with right of survivorship”.  That means that both parties own all of the money in the account and if one of the parties dies, the other party will then own all of the money in the account.

Who is Responsible for Handling Probate?

In most circumstances, the executor named in the will takes this job. If there isn’t any will, or the will fails to name an executor, the probate court names someone (called an “administrator”) to handle the process. Most often, the job goes to the closest capable relative who is familiar with the decedent’s estate, or the person who inherits the bulk of the deceased person’s assets.

If no formal probate proceeding is necessary, the court does not appoint an estate administrator. Instead, a close relative or friend serves as an informal estate representative. Normally, families and friends choose this person, and it is not uncommon for several people to share the responsibilities of paying debts, filing a final income tax return and distributing property to the people who are supposed to get it.

If there is real property in an estate, then a probate is required.  The law firm of Buckner & Cross, L.L.P. will work with you to determine which type of probate to use for the best “fit” with the size and type of estate.

Should I Plan to Avoid Probate?

Probate rarely benefits your beneficiaries, and it always costs them money and time. Probate makes sense only if your estate will have complicated problems, such as many debts that can’t easily be paid from the property you leave.

Whether to spend your time and effort planning to avoid probate depends on a number of factors, most notably your age, your health, and your wealth. If you’re young and in good health, adopting a complex probate-avoidance plan now may mean you’ll have to re-do it as your life situation changes. And if you have very little property, you might not want to spend your time planning to avoid probate, because your property may qualify for Texas’s simplified probate procedure.

But if you’re in your 50s or older, in ill health, or own a significant amount of property, you’ll probably want to do some planning to avoid probate.

Texas offers some probate shortcuts for “small estates.” These procedures make it easier for survivors to transfer property left by a person who has died. You may be able to transfer a large amount of property using simplified probate procedures or without any probate court proceedings at all — by using an Affidavit of Heirship and Family Settlement Agreement. And that saves time, money, and hassle.

Here are the ways you can skip or speed up probate. (If the Affidavit of Heirship and Family Settlement Agreement procedure is used, there’s no need to use the simplified probate procedure.)

Claiming Property with Simple Affidavits

In Texas, you can settle an estate outside of court using two (2) Affidavits of Heirship and a Family Settlement Agreement.  You will have to get sworn affidavits signed by two (2) people who knew the decedent for at least twenty-five (25) years and who are not in line to inherit from the decedent.  They sign an affidavit in front of a notary public, setting out the decedent’s family history.  They will recite the decedent’s name, date of birth, date of death, marital history, and the identity of the decedent’s heirs, along with the heir’s names and current addresses.  The heirs then sign a “Family Settlement Agreement” that divides the decedent’s estate.  The Family Settlement Agreement is signed under oath.  These documents, when filed in the deed records, effect change of the title to real estate.

One problem with the Affidavits of Heirship and Family Settlement Agreements is that many “national” banks (Bank of America, Wells Fargo, Chase Bank, etc.) will not honor the Affidavits and Settlement Agreement.  So, if the decedent had an account with a large financial institution, you will have to go with an administration of the decedent’s estate.

An out-of-court Small Estate Affidavit procedure is available in Texas if there is no will, and the value of the entire estate, not including homestead and exempt property, is $50,000 or less. A probate judge must approve the Affidavit. It can be used to transfer homestead, but no other real estate. There is a 30-day waiting period. Tex. Prob. Code Ann. §137.

Simplified Probate Procedures

Texas has a simplified probate process for small estates. To use it, an executor files a written request with the local probate court asking to use the simplified procedure. The court may authorize the executor to distribute the assets without having to jump through the hoops of regular probate.

You can use the simplified small estate process in Texas if the value of the property doesn’t exceed what’s needed to pay the family allowance and certain creditors. Tex. Prob. Code Ann. §143. “Independent administration” is available, regardless of value of estate, if it’s requested in the will or if all inheritors agree to it. Tex. Prob. Code Ann. § 145.

Avoiding Probate in Texas

Probate court proceedings (during which a deceased person’s assets are transferred to the people who inherit them and the decedent’s bills are paid) can be long, costly, and confusing. It’s no wonder so many people take steps to spare their families the hassle. Different states, however, offer different ways to avoid probate. Here are your options in Texas.

Living Trusts

In Texas, you can make a living trust to avoid probate for virtually any asset you own — real estate, bank accounts, vehicles, and so on. You need to create a trust document (it’s similar to a will), naming someone to take over as trustee after your death (called a successor trustee). Then — and this is crucial — you must transfer ownership of your property to yourself as the trustee of the trust. Once all that’s done, the property will be controlled by the terms of the trust. At your death, your successor trustee will be able to transfer it to the trust beneficiaries without probate court proceedings.

Joint Ownership

If you own property jointly with someone else, and this ownership includes the “right of survivorship,” then the surviving owner automatically owns the property when the other owner dies. No probate will be necessary to transfer the property, although of course it will take some paperwork to show that title to the property is held solely by the surviving owner.

In Texas, this form of joint ownership is available:

• Joint tenancy. Property owned in joint tenancy automatically passes to the surviving owners when one owner dies. No probate is necessary. Joint tenancy often works well when couples (married or not) acquire real estate, vehicles, bank accounts or other valuable property together. In Texas, each owner, called a joint tenant, must own an equal share. To establish joint tenancy, owners must sign a joint tenancy agreement.  If you are married and have a bank account with both you and your spouse named on the account, you have probably signed a joint tenancy agreement and don’t even know it!

Payable-on-Death Designations for Bank Accounts

In Texas, you can add a “payable-on-death” (“POD”) designation to bank accounts such as savings accounts or certificates of deposit. You still control all the money in the account — your POD beneficiary has no rights to the money, and you can spend it all if you want. At your death, the beneficiary can claim the money directly from the bank, without probate court proceedings.

Transfer-on-Death Registration for Securities

Texas does not let you register stocks and bonds in transfer-on-death (TOD) form.  This is allowed in many other states.  If someone dies owning securities (stocks or bonds), you will have to go through a probate or administration in order to change the ownership of the certificates.

Transfer-on-Death Deeds for Real Estate

Many states recognize deeds that provide for a change of ownership once a person passes away.  Texas does not allow real estate to be transferred with transfer-on-death deeds.

Transfer-on-death Registration for Vehicles

Texas does not allow transfer-on-death registration of vehicles.  However, Texas does have a process outside of the probate courts to transfer registration of a vehicle.  It is a simple matter and the attorneys at Buckner & Cross, L.L.P. can help you transfer the title to a vehicle after the death of someone.

Simplified Probate Procedures

Even if you don’t do any planning to avoid probate, your estate may qualify for Texas’s simplified “small estate” probate procedures.  Texas modernized their probate process years ago and there is a simple probate process likely available to you, if you are dealing with a small estate.

Please let the lawyers of Buckner & Cross, L.L.P. assist you with your probate or estate administration needs!

This article is not intended to be legal advice and is not a substitute for legal representation by an attorney. You are encouraged to seek the advice of your own attorney to answer any specific legal questions you may have.