Wednesday, June 27, 2012

Probating an Estate Without Administration in Texas: The Small Estate Affidavit

What if your relative died without a will, but her assets are not very complicated, and you’d rather not spend a lot of money or time going through probate?

In Texas, you may be able to use a special form of probate. In order to qualify, the following must be true:

- At least 30 days have elapsed since the date of death;
- The deceased died without a will;
- The total gross value of the deceased’s property/assets is $50,000 or less (not including the deceased’s homestead or certain exempt property); and
- The only real property owned by the deceased was her homestead.

In this context, “exempt property” typically means personal property worth $30,000 or less, so the deceased’s separate property and one-half share of any community property must not exceed the $50,000 limit. Several other conditions apply, but if the foregoing is true, you may be able to avoid formal probate administration through the procedure known as a Small Estate Affidavit.

The affidavit must comply with Section 137 of the Texas Probate Code.  The probate court will review the affidavit and, if it is approved, will enter an Order – usually without a hearing – approving the Small Estate Affidavit, which is then recorded as an official public record. Once approved and records, the Small Estate Affidavit serves to transfer ownership of the deceased’s assets to the persons identified as distributes in the affidavit. 

Like the Texas Muniment of Title procedure, the court does not appoint anyone to act as an executor or other representative of the deceased’s estate.  However, because the court’s order lists specific distributees who will receive the deceased’s property, most stock brokerage firms, banks, and similar companies appear to recognize the validity of this more simplified probate procedure. 

By: Cynthia W. Veidt

Wednesday, June 20, 2012

Probating an Estate Without Administration in Texas: The Muniment of Title Procedure

What if your relative in Texas died with a will, but her assets are not very complicated, her will is clear about who should receive each asset, and you’d rather not spend a lot of money or time going through probate?

In Texas, you may be able to use a special, simplified form of probate. In order to qualify, the following must be true:

The deceased had a valid written will;
That will had not been revoked;
The only debts owed by the deceased are secured by liens on real estate; and
Four years have not passed since the date of death.

A few other conditions may apply, but if the foregoing is true, you may be able to seek an order from the Texas probate court (following a brief hearing) admitting the will to probate as a “muniment of title.” No one will be appointed to act as the executor or other representative of the deceased’s estate. Instead, the will itself becomes an official public record of Texas that acts as the required instrument to transfer title and ownership from the deceased to the persons named in her will.

You should be cautious, however, when attempting to use this simplified Texas procedure. Many stock brokerage firms, banks, life insurance companies and title companies in other states are often unfamiliar with the Texas muniment of title procedure, and they sometimes refuse to recognize this process as a valid method of transfer.

If your relative had investment/retirement accounts or similar assets that did not have valid beneficiary designations, you should check with the companies holding or managing these assets to determine whether they will accept an order probating the will as a muniment of title before attempting to use this procedure.

By: Austin Attorney Cynthia W. Veidt

Tuesday, June 12, 2012

Who Cannot Become the Personal Representative of an Estate?

Texas law specifically excludes the following persons from qualifying to serve as the personal representative (executor or administrator) of a deceased’s probate estate:

a) An incapacitated person (someone who is mentally or physically unable to handle his or her own affairs);

b) A convicted felon, unless such person has been pardoned, or his or her civil rights have been restored by a court;

c) A non-resident of the State of Texas, unless he or she has appointed a Texas resident as an “agent” to accept service of process in all actions or proceedings with respect to the estate;

d) A corporation not authorized to act as a fiduciary in the State of Texas; or

e) Any person the Court finds to be “unsuitable”. 

In addition, if the will designates the deceased’s former spouse to serve as personal representative of the estate and the marriage was subsequently dissolved by divorce, annulment or judicial declaration that the marriage was void, that former spouse cannot be appointed as personal representative of the estate except under very unusual circumstances. 

Article by Cynthia W. Veidt, Attorney

Friday, June 1, 2012

How Can I Change My Texas Will Without Creating a Brand New One?

Sometimes, you want to change one little thing in your Texas will without the need to create and sign an entirely new one. For example, one of the persons you identified as your executor has died, and you want to name someone else in his/her place. Or perhaps you’ve had an addition to the family and want to leave a specific item or gift to your new grandchild.

In these situations, a codicil to your Texas will can be created to make the minor change or to add a new provision. The codicil should specifically reference your existing Texas will, preferably by date of execution, and specifically identify the paragraph(s) you are changing or create a new number/section for the information you are adding.  A codicil in Texas should be executed using the same formalities as an original will and can be made self-proving in the same manner as an original will. Make sure that your codicil is placed in the same location as your will, and that your executor is aware of its existence.

However, if you want to make several changes to your will, or something has occurred in your life that substantially alters your previous estate plan (such as a marriage/divorce or birth/adoption of a child), you should execute a new will, under the usual formalities, and specifically revoke the old one. Multiple codicils to a will, or substantial changes to a will via codicil, can become very confusing to your executor or increase the risk that the terms will be inconsistent with each other.

Article by Cynthia W. Veidt, Austin Attorney