Each of the above referenced “faces of probate” is a tool to be utilized to meet the goal of settling an estate with the least possible time, effort or expense, but the right tool must be selected and properly used.
The bottom line ends up as usual, being that probate utilizing independent administration is a relatively simple and relatively inexpensive procedure but you will need the services of an attorney experienced in probate law and procedures to guide you through the process.
TERMS AND DEFINITIONS IN PROBATE LAW
Administration with will Annexed
This is the procedure utilized when there is a Will, but the Will fails to name an executor, the executor predeceased the decedent or the name executor is unwilling or unable to serve.
Persons who are interested in the estate may ask for Administration with Will Annexed and petition the Court to appoint an administrator. There is an order of appointment which gives preference to those persons who were more closely related to the decedent.
The Administration with Will Annexed, like some of the other procedures previously discussed, may be made “independent” if the distributes of the estate can agree on the advisability of acting independently.
To fully understand how property passes at death in Texas requires at least a basic understand of a few legal terms. This is not a complete definition of such term but a limited one in an effort to give the reader some understanding into probate law.
Authorized Corporate Surety
This is a domestic or foreign corporation authorized to do business in the State of Texas for the purpose of issuing surety, guaranty or indemnity bonds guaranteeing the fidelity of executors and administrators.
Charitable Organization
- A nonprofit corporation, trust, community chest, fund, foundation, or other entity that is exempt from federal income tax under Section 501 (c)(3) or the Internal Revenue Code of 1986 because the entity is organized and operated exclusively for religious, charitable, scientific, educational, or literary purposes, testing for public safety, prevention of cruelty to children or animals, or promotion of amateur sports competition; or
- Any other entity or organization that is organized and operated exclusively for the purposes listed in Section 501 (c)(3) of the Internal Revenue Code of 1986.
Child
A child includes an adopted child, whether adopted by any existing or former statutory procedure or by acts of estoppels, but, unless expressly so stated herein, does not include a child who has no presumed father.
Claims
Include liabilities of a decedent which survive, including taxes, whether arising in contract or in tort of otherwise, funeral expenses, the expense of a tombstone, expenses of administration, estate and inheritance taxes, and debts due such estates.
Codicil
A supplement or addition to a will, not necessarily disposing of the entire estate, but modifying, explaining, or otherwise qualifying the will in some way. When admitted to probate, the codicil becomes a part of the will.
Corporate Fiduciary
A financial institution as defined by Section 201.101, Finance Code, having trust powers, existing or doing business under the laws of this state, another state, or the United States, which is authorized by law to act under the order or appointment of any court of record, without giving bond, as receiver, trustee, executor, administrator, or, although without general depository powers, depository for any moneys paid into court, or to become sole guarantor or surety in or upon any bond required to be given under the laws of this state.
Dependent Administration
If your Will does not provide for independent administration or if your heirs do not agree regarding the freedom to be given an administrator to act without court supervision, your estate will become one utilizing dependent administration.
The subject of “dependent administration” is far too complex to attempt coverage in the limited space provided, but let it suffice to say that it is far more difficult and far more expensive to administer an estate which cannot rely upon independent powers of administration.
You are encouraged to discuss the virtues of “independent” administration with your attorney at the time that your Will is drafted so that your estate does not inadvertently get caught up in “dependent” administration.
If your Will does not provide for independent administration or if your heirs do not agree regarding the freedom to be given.
Devise
When used as a noun, includes a testamentary disposition of real or personal property, or of both. When used as a verb, “devise” means to dispose of real or personal property, or of both, by will.
Devisee
Includes legatee.
Distributee
Denotes a person entitled to the estate of a decedent under a lawful will, or under the statutes of descent and distribution.
Escheat
When a person dies leaving no will and no identified heirs, such property escheats to the state of Texas under conditions specified by statue. It should be noted that both the law and the courts try to avoid escheat situations and should attempt to find an heir.
Estate
Denotes the real and personal property of a decedent, both as such property originally existed and as from time to time changed in form by sale, reinvestment, or otherwise, and as augmented by any accretions and additions thereto (including any property to be distributed to the representative of the decedent by the trustee of a trust which terminates upon the decedent’s death) and substitutions therefor, and as diminished by any decreases therein and distributions therefrom.
Executor
A person appointed by a testator to carry out the directions and requests in his will and to dispose of the property in testator’s estate pursuant to the testator’s wishes as expressed in his will.
Executrix
Feminine version of Executor.
Exempt Property
Refers to that property of a decedent’s estate which is exempt from execution or forced sale by the Constitution or laws of this State, and to the allowance in lieu thereof.
Governmental Agency of the State
- An incorporated city or town, a county, a public school district, a special-purpose district or authority, or a district, county, or justice of the peace court;
- A board, commission, department, office, or other agency in the executive branch of the state government, including an institution of higher education as defined by Section 61.003, Education Code;
- The legislature or a legislative agency; and
- The supreme court, the court of criminal appeals, a court of appeals, or the State Bar of Texas or another judicial agency having statewide jurisdiction.
Heirs
Denote those persons, including the surviving spouse, who are entitled under the statutes of descent and distribution to the estate of a decedent who dies intestate.
Holographic Will
A will that is made totally in the handwriting of the testator. It requires no subscribing witness. Although legal and enforceable in Texas, it can be a source of special problems at the time of probate. Holographic wills are never recommended.
Incapacitated or Incapacitated person
- A minor;
- An adult individual who, because of a physical or mental condition, is substantially unable to provide food, clothing, or shelter for himself or herself, to care for the individual’s own physical health, or to manage the individual’s own financial affairs; or
- A person who must have a guardian appointed to receive funds due the person from any governmental source.
Independent Administration
If a person’s will provides for appointment of an “Independent” administrator or executor and states that no other action is to be had in the county court in relation to the settlement of the estate than the probating and recording of their will and the return of an inventory, appraisement and list of claims of the estate,” then the estate can be administered without judicial supervision and, therefore, without added costs at time of probate.
If the person’s will does not have the above referenced language, it is still possible to have an independent administration if all distributes of the document agree on the advisability of acting independently. Your attorney can be of great assistance in memorializing this agreement.
General forms needed in this type of procedure are as follows: Application for probate, waivers, notice to creditors, and filing of an inventory, Merph release of all Medicare and Medicaid creditors and final order of the court. After the hearing our firm will walk the clients to the clerk’s offices to receive their letter testamentary acknowledging them as executors of the estate.
Independent Executor
The personal representative of an estate under independent administration as provided in the Texas Estates Code. The term “independent executor” includes the term “independent administrator.”
Interested Person or Persons Interested
Heirs, devisees, spouses, creditors, or any others having a property right in, or claim against, the estate being administered; and anyone interested in the welfare of an incapacitated person including a minor.
Intestate Succession
May be defined as the laws which govern how property passes when a person dies without a will or with a will that makes only a partial distribution oh his/her property.
Legacy
Includes any gift or devise by will, whether of personalty or realty. “Legatee” includes any person entitled to a legacy under a will.
Letters of Administration
Documents issued by the County Clerk upon Orders of a Court having probate jurisdiction. They act as instruments of authority for administrators as they do business with title companies, insurance companies, banks and the like.
Letters of Guardianship
Documents issued by the County Clerk which serve as evidence that one has legal authority to act as guardian. They may be of two types or a combination of the types:
- Guardians of the person have the authority to determine the residence of a ward and who has access to the ward and other functions of a personal matter.
- Guardians of the estate have the authority, with court permission to buy and sell property, to pay bills and other financial functions.
Life Estate
An estate which has a detain limited to the life of the party holding it (general definition only.)
Minors
All persons under eighteen years of age who have never been married or who have not had disabilities of minority removed for general purposes.
Mortgage or Lien
Includes deed of trust, vendor’s lien, chattel mortgage, mechanic’s, materialman’s or laborer’s lien, judgment, attachment or garnishment lien, pledge by hypothecation, and Federal or State tax liens.
Muniment of Title
If a deceased person leaves a Will, but there are no unpaid debts except those which have a secured interest in real property, then there may be no need for administration. Under these circumstances, the will may be admitted to probate as a Muniment of Title which passes title to real property to the heir in the shortest time possible. No letters testamentary or letters of administration are issued under a Muniment of Title.
There will not be a deed because we are probating property as a muniment of title. There is no one to do a deed because there is no personal representative. The title companies will pick up the wills after they are admitted to probate. The firm will take certified copies of the orders admitting the wills to probate and file them in deed records.
Net Estate
The real and personal property of a decedent, exclusive of homestead rights, exempt property, the family allowance and enforceable claims against the estate.
Next of kin
Includes an adopted child or his or her descendents and the adoptive parent of the adopted child.
Non-Testamentary Transfers
Includes property that passes to a beneficiary through what would normally be a contractual arrangement. A non-exclusive list of examples includes IRA accounts, life insurance policies with beneficiaries other than the estate, P.O.D. (Payable on death) accounts and certain types of trust accounts.
Person
Natural persons and corporations.
Personal Property
Includes interests in goods, money, choses in action, evidence of debts, and chattels real.
Personal Representative or Representative
Includes executor, independent executor, administrator independent administrator, temporary administrator, together with their successors. The inclusion of independent executors herein shall not be held to subject such representatives to control of the courts in probate matters with respect to settlement of estates except as expressly provided by law.
Probate matter, Probate proceedings, Proceeding in probate, and Proceedings for probate
Synonymous and include a matter or proceeding relating to the estate of a decedent.
Proceedings to determine Heirship
This procedure is used when a person dies in Texas without having a will. The Texas statues of intestate succession determine the identities of the rightful heirs and determine what portion of the community property passes to that heir as well as what portion of separate property passes to that heir. All heirs and beneficiaries must either be served with citation or enter an appearance through answer of or a waiver.
It is possible to combine this proceeding to determine heirship with a proceeding which determines that on necessity exist for an administration or, if applicable, it may be combined with a request for appointment of an administrator to gather and distribute the assets.
It is also important to note that if all of the heirs agree, then the administration may be made independent and, therefore, far less expensive and time consuming than an administrator which must seek court approval for each act done on behalf of the estate.
Property
Community Property vs. Separate Property- There are two separate and distinct statues referenced for distribution of community property, and Section 38 of the Texas Probate Code provides for distribution of separate property. Normally, the nature of property (I.e., separate of community) is established at the time of acquisition. For example, if spouse #1 owns or rents a house at the time that Spouse #1 and Spouse #2 marry, that rent house, is the separate property of Spouse #1. The rent received on the rent house during the marriage is community property. Each relationship was established was established at the time of acquisition.
Real Property
Land and generally whatever is erected or growing upon or affixed to land.
Revocation by Operation of Law
If a testator, after making a will is divorced; all provisions in the will in favor of the divorced spouse are void.
Revocation by Physical Act
A testator may revoke a will by a physical act, such as tearing it into pieces or otherwise destroying it. This may also be done by another person in testator’s presence if testator causes this other person to do the physical act.
Revocation by subsequent will
A will in writing may be revoked by a subsequent declaration in writing, but in order to be effective, it must be executed with life formalities to the revoked or revised document.
Small Estate Affidavit
In order to be eligible for treatment as a “small estate” under Sections 137 and 138 of the Texas Probate Code, the estate must meet certain criteria.
These criteria are:
- The decedent’s non-exempt assets must be greater in value than the known liabilities;
- The gross value of all of the decedent’s property, not including exempt property and a homestead, must not exceed $50,000.00.
This procedure is not usually recommended if a Will exists.
This entire procedure is done via affidavit of witnesses who are familiar with the family history of the decedent and can swear to facts regarding the identity of the heirs.
Spendthrift Trust
A trust set up to protect a beneficiary from spending all of the moneys that are to be given to her at one time. This can also be used to keep creditors from attaching trust funds.
Surety
Includes both personal and corporate sureties.
Testator
One who has made a will or testament; one who dies leaving a valid will.
Testatrix
This is a term used for a woman who makes a will; a woman who dies leaving a valid will.
Trust
A right of property, real or personal, held for the benefit of another.
Ward
Is a person for whom a guardian has been appointed.
Will
A will, also referred to as a “Last Will and Testament” is primarily designated to transfer your assets upon your death. A will names an executor, who is the person you designate to carry out our instructions, gather the assets, pay debts and distribute the assets according to your wishes. A will also revokes another will. A will includes any Codicils which are changes to the will.
A will only becomes effective upon your death.
