Losing a loved one is a challenging time. Between the grief and loss, oftentimes, the last thing on one’s mind is worrying about how to handle the debts and assets left behind. Here at the Law Office at Brandon Bledsoe, we understand this can be overwhelming. It is often the case that documents will need to be prepared or court proceedings initiated to pay these debts or transfer any property. If this is something you are experiencing, below is a general overview of some of the options available in Texas.
Probate of a Will
If someone passes away and they had a Will, their estate would be distributed to whomever they named as their beneficiaries. This is not automatic though. Rather, for a Will to be considered valid, a court proceeding must be initiated to determine if it is valid Will, and if so, naming someone as Executor. This is a process known as “probate.” The person (or entity) named as Executor under the Will has the responsibility of collecting assets, handling debts, and then distributing the estate to whoever is a beneficiary. Anyone with a copy of the Will should be sure to do so within four years, because barring limited exceptions, a Will cannot be admitted to probate more than four years after someone’s death.
Muniment of Title
If someone passed away with a Will, but there are no debts, probating a Will as Muniment of Title is a great option in some circumstances. Muniment of Title involves a court proceeding in which title to some property can be transferred into the names of those who inherit under the Will. If there are no debts, except for any mortgage on land, this is a great way of establishing ownership rights to beneficiaries under the Will. It can be used to collect bank accounts, register stock certificates, and, as it is most often used, transfer title to land. Lastly, probating a Will as Muniment of Title also allows someone to probate a Will after the four-year limit if one can show the court a good reason for failure not to bring it within four years.
Administration of an Estate
If someone did not have a Will, but there is still a necessity to collect any assets or handle any debts, an administration would need to be created in court. This is not unlike probating a Will. The major differences are that instead of inheriting under the terms of the Will, the heirs of the estate are the ones who inherit. These heirs are determined by Texas intestacy statutes. Additionally, instead of appointing an Executor, the court appoints someone as a “administrator.” An Administrator is not unlike an Executor, but instead of being named under a Will, they are appointed by the Court. An Administration will be paired with an heirship proceeding to determine who their heirs are.
Statutory Heirship Proceeding
In a statutory heirship proceeding, the court determines that someone has passed away without a Will and who inherits from their estate. This has the same effect as a Muniment of Title, in that it works to transfer ownership. The distinction is they are not inheriting under the terms of a Will but Texas rules for intestacy (rules of who inherits if there is not Will). This proceeding can be brought independently, or if paired with an Administration if there are debts that need to be handled as well.
Affidavit of Heirship
An Affidavit of Heirship is a popular method of transferring title to land, especially amongst title companies. This is not unlike a statutory heirship proceeding, except instead of having a court decide who the heirs are, one prepares an affidavit listing who the heirs are. This informal procedure can be used to transfer title to land several years after someone has passed away. These are frequently prepared by and relied on by title companies. Because of this, one should always rely on an experienced attorney to help prepare these because title companies frequently require affidavits above and beyond the requirements set forth by Texas law. This can include having witnesses familiar with the family history sign the affidavit or having all heir’s sign.
Small Estate Affidavits
In situations where an estate’s value does not exceed $75,000 and there is no Will, the heirs of someone’s estate can file a Small Estate Affidavit with the court. This is a sworn affidavit where the heirs tell the Court that they are entitled to distribution of property and there is no need to appoint an Administrator. While the estate cannot exceed $75,000 in value, this does not include homestead of the person who died and a set amount of exempt property. This is often a great option if there are bank accounts for Texas banks that need to be transferred but their nominal value does not warrant the expense of creating an administration. However, before doing a small estate affidavit, one should always check with the bank to ensure they would accept a Small Estate Affidavit. These are unique to Texas and out of state banks may not honor them. Lastly, if the person who died owned land, a small estate affidavit can only be used to transfer the homestead. IF they owned more than one piece of land, you would not be able to use a small estate affidavit.
This is a general overview of some of the options that are available in Texas to handle the estate of a loved one. If you have any questions during this difficult time, please give our office a call for a free consultation.