The state of Texas offers the survivors of a deceased person several ways to proceed to distribute the deceased person’s assets. Sometimes, it is possible to avoid going to the courthouse altogether. Other times, it is possible to make use of an avenue that requires only one courtroom appearance.
If the sole matter to be distributed is a house or other real property, Texas offers a procedure called “Probate of a Will as a Muniment of Title.” This procedure establishes the validity of the Will and allows the survivor to register the Will with the County Clerk for the purpose of transferring title to land to the person or persons named in the Will.
If the total amount of property to be distributed has a value less than $50,000.00, Texas offers a procedure called “Small Estates on Affidavits.”
If the deceased left a written Last Will and Testament, the traditional procedure is called “probating” the Will. An application is filed with a Probate or a County Court. The application asks the Court to find that the Will is valid and to appoint a person called an “executor” to carry out the terms of the Will, including distributing the property of the estate to the persons named in the Will.
If the deceased did not leave a Will, the traditional procedure is called “opening an administration. As with the probating of a Will, an application is filed with a Probate or County Court. The applications asks the court to find that the deceased has died in the county, that no Will was left, and that a necessity exists for the administration of the deceased’s estate. The applications asks the court to appoint an “Administrator,” who will gather the property belonging to the deceased and distribute it to the heirs of the deceased. Who the heirs are is defined by a group of laws called “The Laws of Intestacy.”
ALTERNATIVES TO PROBATE
The most important alternative to probate court is life insurance. Texas law makes a policy of life insurance a matter of contract between the life insurance company and the policy holder. Therefore, upon death the life insurance company pays a money benefit directly to he named beneficiary. The money benefit never becomes part of the deceased’s estate. However, if no beneficiary has been designated by the deceased; or, the named beneficiary predeceased the policy holder, the opening of an administration to distribute the benefits might be required. It is very important to know who the designated beneficiary or beneficiaries are and to keep the designation up-to-date. A beneficiary designation cannot be changed once death has occurred.
The second most important alternative to probate is the Texas Pay-On-Death (POD) order. Texas law provides that practically any form of holding money, such as bank accounts, savings accounts, IRA’s, 401K’s, pension plans, brokerage accounts, savings bonds. And so on, can have a Pay-On-Death order attached to the paperwork. A Pay-On-Death order instructs the holder of the account to pay the contents of the account to a named beneficiary upon proof of death. As with the proceeds of a life insurance policy, the funds ever become part of the estate of the deceased and pass straight to the named beneficiary without court intervention.
DO YOU NEED A LAWYER?
Whether lawyer is necessary or not is a question that needs to be answered by a lawyer. Sometimes, the opening of an estate or the probating of a Will is unavoidable. Sometimes, it is recommended even if not necessary to avoid conflicts between the heirs.
Proper estate management begins with proper estate planning. Proper estate planning determines the best path for an estate to take to minimize the burden on the survivors and to assure that the deceased person’s goals are accomplished.
It is a tragedy when the money and property of an estate are consumed by a professional administrator, and the accountants and appraisers he hires, rather than being distributed to the family.
The above-listed information is offered to the public for general information purposes only. It is not intended to be specific legal advice. It is not a substitute for personalized advice rendered by a legal professional based upon the individual facts of any particular case. Every legal matter is unique. The reader is encouraged to seek personalized legal counsel on their individual case. Stephen E. Menn does not offer tax advice. Stephen E. Menn is not board certified in any legal specialty by the Texas Board of Legal Specialization. Stephen E. Menn is an attorney licensed to practice law in the state of Texas since 1983. Stephen E. Menn has been licensed to practice law in federal court since 1985.