Articles Posted in Probate

If you are left to handle a loved one’s estate after he or she dies, you will likely be looking to wrap everything up as efficiently as possible. The longer probate drags on, the more time and money it can end up costing everyone involved. As long-standing Houston estate planning attorneys, we are all too familiar with some of the common pitfalls that estate administrators face, and we know how to take steps to proactively avoid the pitfalls and the delays that accompany them.

Pitfall #1: Familial Disputes

As a will passes through probate, third parties have the opportunity to dispute the validity of the will. Oftentimes, a third party will argue that the decedent was not of sound mind while writing the will or that another person fraudulently influenced the decedent during the process. These disputes, in turn, can hold everything up and delay the probate process. To avoid this scenario, we recommend that anyone writing a will or estate plan communicate early and often with their family members and beneficiaries. By taking the time to ensure your loved ones are aware and understanding of your choices, you can minimize the chance of a dispute down the road. As an estate administrator, take the time to meet with family members early on in the process, and try to work out any potential disputes outside of the probate courts.

If you live outside of Texas but own property inside of Texas, your estate plan will likely be subject to the ancillary probate process. Ancillary probate is the legal process through which a non-state resident gets his estate plan (only as the plan relates.to in-state property) approved by a state probate court. For example, if you live in Colorado but have a vacation home in Texas, your estate administrator will have to use a Texas probable court in order to transfer the vacation home to a beneficiary when you die.

Ancillary Probate

Ancillary probate in Texas is relatively straightforward. It requires a probate application in Texas, typically filed at the same time as the regular probate application filed in the decedent’s state of residence. In our Colorado example, the decedent’s estate would go through probate in Colorado and, simultaneously, would go through ancillary probate in Texas for the vacation home.

The state of Texas requires ancillary probate for real property and business interests in Texas-based companies. Other types of asserts, whether bank accounts, investment accounts, or retirement accounts, stay in the decedent’s residential state. Importantly, the “residential state” is the individual’s home state at the time that he or she died.

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An affidavit of heirship is a legal document that formally lists the heirs to a decedent’s property. When does the affidavit of heirship come in handy? And what is the process for filing this kind of affidavit? On today’s blog, we talk through some benefits of the affidavit and provide the basic information you would need in order to move forward with the filing process.

Why Use an Affidavit of Heirship?

Importantly, a decedent’s loved ones can only use an affidavit of heirship if the decedent passed away without a will. The affidavit comes in handy because it allows an individual’s beneficiaries to bypass probate, which saves significant time and money. Instead of having to probate a decedent’s property, the heirs can instead submit this affidavit, which a) declares the decedent’s heirs to the court and b) evidences the transfer of ownership from the decedent to these heirs. An affidavit of heirship cannot be used to transfer money in the form of a bank account; it only comes into play when there is real property that needs to be transferred.

How to Use the Affidavit of Heirship

If your loved one died without a will and had real property to pass on, you might want to consider filing the affidavit of heirship. To use this affidavit to bypass probate, you should list the decedent’s heirs and assets on the document provided by the probate court. Then, all the heirs need to sign the affidavit in front of a notary public. The heirs should then submit the affidavit to both the court in the county where the decedent died and to the county where the decedent owned property. If and when the court approves the affidavit, the process is complete.

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At McCulloch & Miller, we specialize in probate and estate planning. As our clients know, most estates in Texas need to go through probate once the estate owner dies. For those clients with high-value estates, the probate process can be a bit lengthier and more complex. How should individuals with higher net worths prepare for probate? What should loved ones expect from the process? On today’s blog, we cover some of the basics that people with significant assets should consider as they think through their own probate processes.

Consideration 1: Length of Time for Probate

The more complex an estate, the longer probate can take. As a general rule in Texas, probate takes approximately six months from the date of filing. For high-value estates, however, expect a longer and more drawn-out process. The court might, for example, require additional time to review the decedent’s estate plan or to conduct appraisals so it can accurately value the property’s assets.

Consideration 2: Tax Liability

If you are a high net worth individual, your estate will likely be subject to taxes such as estate taxes and capital gains taxes. In order to prepare for this reality, we recommend that you consult with a Houston estate planning attorney as soon as possible; this attorney should be able to help you prepare your estate to guard against these taxes. You can, for example, put assets in a trust or pass along money to your heirs while you are still alive in order to avoid some of these tax liabilities.

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In an ideal situation, if you are left to handle a loved one’s affairs after they pass, you have your loved one’s detailed will or estate planning document at your disposal. Sometimes, however, individuals die without a will, and their heirs are left to navigate intestate probate in Texas. The word “intestate” literally means that a person dies without a will, and intestate probate is different from (and more complicated than) probating an estate that includes a will. On today’s blog, we review the basics of the intestate probate process for those who might need guidance as they handle their loved one’s affairs.

Step 1: Appoint an Administrator

Because the decedent will not have named an executor, it falls on the court to appoint an administrator for the estate. Typically, an attorney will notify the court that an individual has died, and that attorney will ask the court to appoint an administrator. The administrator will then be responsible for naming the possible beneficiaries of the decedent’s estate. Importantly, the court must issue Letters of Administration during this process; these letters detail the administrator’s authority to act on behalf of the decedent’s estate.

Step 2: Review the Estate

The administrator will need to take time to review the decedent’s assets and debts, including bank accounts, real property, investment accounts, and sentimental or valuable items. Once the administrator is armed with this information, he or she can determine how to administer the estate. In order to administer the relevant assets, the administrator will need to file an affidavit of heirship. This formal document lists the decedent’s heirs and the assets, and all heirs need to sign and notarize the document (along with two witnesses).

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In Texas, if a person dies without a will (or if a person leaves property out of their will, intentionally or mistakenly), there are laws that dictate how the state distributes the relevant property. Texas heirship law can seem complicated at first, but today’s blog aims to simplify the process for those whose loved ones died without clear instructions for their property.

In order to decide who inherits a decedent’s property when that property is not accounted for in a decedent’s will, the probate court must first determine the decedent’s heirs. The court will take into consideration three main circumstances when investigating the heirs: the marital status of the decedent; the type of property at stake (separate/nonmarital or community/marital); and whether the decedent had children.

Heirship Law Without a Spouse Involved

If a decedent died without a spouse, the process is relatively straightforward. In this circumstance, the estate goes to the decedent’s children. If there are no children involved, the estate goes to the decedent’s parents, or to his or her siblings if the parents are no longer living. In some circumstances, a decedent dies with no living relatives. If this happens, the person’s estate goes to the state of Texas.

Heirship Law with a Spouse Involved

If a decedent died with a spouse, that person’s separate property is divided as follows: one-third of the estate goes to the spouse, while two-thirds go to the children. If the decedent had no children, the spouse inherits all of the separate property.

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The probate process can vary in complexity, depending on the size and nature of a decedent’s estate. While many executors think first and foremost about the assets in a decedent’s estate, it is equally important to consider the debts and taxes that might be involved. Without addressing these crucial elements, it is impossible to have an accurate accounting of how much a person has left behind in his or her estate plan.

Part of every estate executor’s job is to thoroughly review the estate at issue. The estate could include real property, cash, bank accounts, investment accounts, retirement accounts, and tangible items that the decedent left behind. The estate could also include outstanding debts and unpaid taxes. How do you handle these debts and taxes? How do they effect the rest of the estate?

Paying Taxes

It is the responsibility of the estate executor to file the decedent’s final tax return. The executor must ensure that all of the individual’s taxes are paid, whether the taxes are federal, state, or local. The payments for these taxes come directly out of the decedent’s estate.

Paying Debts

The executor must also handle any debts on the estate. These debts could include bills, mortgages, or loan repayments, which can all add up over time and which the decedent might not necessarily have been open about during his or her lifetime. One requirement during the probate process is that the court must give debtors an opportunity to file a claim on the estate in order to notify the executor that the decedent owed them money. Only after creditors are given sufficient opportunity (and only after the debts have then been paid) can beneficiaries begin to inherit from what is left over in the estate.

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Some individuals in Texas qualify for what is called a “small estate affidavit,” which simplifies the probate process and serves as an efficient way to pass assets to heirs. When does the small estate affidavit make sense for Texans? What are the requirements? Today’s blog summarizes some of the basics regarding the small estate affidavit, but as always, with specific questions and concerns, you should speak with a Houston estate planning attorney that can look at your circumstances and tailor your legal advice accordingly.

What is the Small Estate Affidavit?

The small estate affidavit is a sworn statement that settles a decedent’s estate. It must be signed by all of the decedent’s heirs (or otherwise signed by someone with legal authority to sign on the heirs’ behalf).

What are the Requirements for the Small Estate Affidavit?

Individuals in Texas are able to use a small estate affidavit only if the decedent died without a will and if that decedent left less than $75,000 in property behind. The $75,000 value does not include the decedent’s home and some other probate-exempt property. Additionally, the decedent must not have left behind more debts than assets, and he or she must not have owned real property in addition to his or her home.

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When clients or potential clients ask us how long the probate process typically takes in Texas, we always say that “it depends.” This answer can be frustrating, but there is unfortunately no cookie cutter answer to this common question. As we have described in past blogs, probate is the process through which a court authenticates and approves a decedent’s will, which allows the decedent’s beneficiaries to then inherit from the will. Probate can take anywhere from three months to one year from the date of filing (sometimes longer, in rare cases). There are several key factors that affect probate timelines in Texas.

Estate Planning Documents

Does the decedent have a will, trust, or other estate planning document in place? Is it thorough, detail oriented, and valid? If the court can quickly 1) identify the decedent’s estate plan and 2) confirm that the plan is legally valid, the beginning of probate can go pretty quickly. Sometimes, though, decedents die without any estate plan at all. Other times, they die with estate plans that are not up to standard and are difficult for the court to authenticate. Incomplete estate planning documents can delay the probate process significantly.

Disputes from Third Parties

If a beneficiary or other third party decides to dispute the validity of the will, this elongates probate. Sometimes, individuals that were left out of the will tend to argue before the court that the decedent fraudulently or mistakenly left them out as a beneficiary. It takes time for the court to consider these arguments and determine if they have merit.

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If one of your loved ones has recently passed, and that loved one died both with a will and without any debts, you might be able to probate your loved one’s estate through Muniment of Title. Muniment of Title is a tool that shortens the time that probate typically takes, and it allows for a more efficient and cost-effective solution for beneficiaries. There are, however, certain things to keep in mind if you are wondering whether Muniment of Title might be right for you.

Requirements for Muniment of Title

As mentioned, for a person’s estate to qualify for Muniment of Title, the person must have died both with a will and without any debts. Thirdly, the person must not have applied for Medicaid benefits at any point in his or her lifetime. The applicant (typically an heir) for Muniment of Title must be able to testify to these three facts, both in written and oral form.

The Process for Muniment of Title

Once an applicant determines that his or her loved one’s estate meets these requirements, the applicant submits the required documentation to the court. Although the process is relatively straightforward, we recommend having a Houston estate planning attorney look over the paperwork to make sure everything is procedurally correct before submitting. Once the court receives and approves the will, the court will post notice for ten days, advising the public that it will be holding a hearing on the decedent’s estate.

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