Losing a loved one is a difficult thing, and in the wake of such a tragedy, the legal obligations can be confusing and intimidating for families that are still grieving. Understanding the probate process will help ease your mind during such a sad time and provide direction and clarity about what to expect and how to proceed.
This blog covers general probate information, but also focuses specifically on the Texas Probate Process. Texas offers some of the simplest probate options, allowing families to quickly conclude personal and financial family matters with dignity.
What is Probate?
Probate is a legal process that verifies the authenticity of a will and arranges for the distribution of a person’s estate. If you have a will, a judge will check the document and conclude any outstanding personal or financial matters according to the will’s instructions while complying with state law.
If there isn’t a will prepared, known as an intestate estate, the court will appoint an administrator to handle the remaining affairs and distribute any personal property or possessions by intestate succession law.
Probate Court is a specialized court responsible for settling estates. The court approves wills, oversees the appraisal and sales process, and ensures all debts and taxes are paid before the remaining assets are divided among the heirs. The court can also appoint an executor or administrator if one isn’t assigned and distribute the estate if a will isn’t prepared.
The Probate Process
Most estates go through probate because it’s the legal process for transferring property from one person to another when someone passes away. For this article, we’re emphasizing Texas Probate Law.
If the will is uncontested and the estate isn’t large or complex, probate can be a routine procedure where a judge verifies the documents and releases the estate to be transferred. However, if there are disputes, questions about the validity of the will, no beneficiaries are named, or the appointed executor does not want the job, probate can become a lengthy, complex, and expensive process.
After establishing the executor, there are a few steps to complete.
- The assets will need to be tracked down and inventoried.
- Non cash property must be appraised, and sold if necessary to settle debts and pay taxes.
- Once the financial obligations are fulfilled, the remaining property is divided per the will’s instructions or the court’s order.
In some circumstances, probate is mandatory. If the will itself is in question, or there isn’t a will at all, probate will be necessary. If there are assets without any designated recipients, tenant-in-common assets, or joint-tenancy assets, the court will need to intervene. If the will didn’t name any beneficiaries or the assigned beneficiaries have passed away, the estate will have to pass through probate.
Probate Takes Time and Money
Probate is expensive! The laws and fees vary from state to state, but you can expect to pay between 3%-8% of the estate on the proceedings. In some states, the probate fees are calculated as a percentage of the estate’s value. In others, there are flat fees.
You can expect a few standard expenses:
- Filing Fees – These vary by state and jurisdiction. Some are flat fees, some are based on the estate’s value.
- Executor Fees – To avoid these fees, the executor (typically a trusted friend or relative) waives their right to compensation. In Texas, this is generally 5% of the estate.
- Bond Posting Fees – Posting a bond acts an insurance against any poor choices made by the executor that could reduce the value of the estate. Some states don’t require this and you’ll have the option of intentionally spelling out in your will if you want a bond posted or not.
- Publication of Legal Notices – This pays for an announcement in the local paper informing creditors how to contact the attorney or personal representative to settle any outstanding debts.
- Tax Preparation or Accounting Fees – Depending the size of the estate, taxes may need to be filed or financial records may need to be organized and settled.
- Property or Business Appraisals – If the estate has real property (such as real estate) or non-cash assets (personal property such as jewelry, artwork, vehicles, and such) you’ll need to conduct appraisals to determine their value.
- Attorney’s Fees – These will be the bulk of your probate expenses! The good news is that these costs are also negotiable, and it never hurts to try and save some money.
There are plenty of good reasons to arrange your affairs in such a way that your family won’t have to undergo the probate process.
- It’s expensive! You can save a sizeable portion of your estate by planning ahead.
- It’s time consuming. Probate can take anywhere from several months to several years and will require ongoing attention from the executor and your family.
- It’s a public affair! Probate and privacy don’t go together. During a probate proceeding, all of your records and assets become public knowledge.
Some estate planning is necessary if you want to avoid probate. You’ll need to draft a will and keep it current, set up a trust, or choose financial products that naturally avoid the probate process.
There are certain assets that organically avoid probate. In Texas, these include:
- Jointly owned property or community property with a right of survivorship
- Bank accounts that are payable on death
- Payments from life insurance policies
- Survivor benefits paid from personal annuities
Establishing a trust is another way to avoid probate. Trusts allow ownership of your property, such as homes, investment accounts, and vehicles, to pass into the care of a trustee and be held for your beneficiaries. Many people think trusts are only for the wealthy, but they’re very effective tools for middle and upper middle class families to ensure privacy and convenience during a difficult time. You’ll want to work with an attorney to ensure the trust is set up correctly, so the transitions will be smooth when the time comes.
Probate in Texas
If you hail from the Lone Star State, lucky you! Texans enjoy simplified probate procedures that make the process quick and painless for most families. There are two formal methods and then some small estate options that don’t require court supervision.
Independent Administration of Estates
This is the most common type of formal probate proceeding in Texas, preferred because it doesn’t require the estate to post a bond and permits the executor to handle affairs with less court supervision.
If there is a valid will and designated executor, the process is a simple as filing with the court and waiting the two week posting period before the court date. If there isn’t a will but the family agrees to pursue Independent Administration, the chosen executor will file a request with the court to act independently.
Dependent Administration of Estates
This is the other formal probate process in Texas. It’s less common and more complex than Independent Administration. A bond must be posted and every step of the process must have court approval.
Muniment of Title
This is a simple, inexpensive method for probating a valid will. The court will rule that probate administration isn’t necessary and submit the will documents as a title to the assets in question. Muniment of Title doesn’t utilize an executor, but the individual who requested the proceeding must file a sworn affidavit within six months that the terms have been fulfilled.
Small Estate Affidavit
If there isn’t a will, and the estate is worth $50,000 or less, the family can file a Small Estate Affidavit that allows them to collect and distribute the decedent’s personal property without probate.
Why You Need A Will
A will provides for your family, secures your privacy and your assets, and distributes your property according to your wishes.
These documents preserve more than just property, though. A will instructs who will care for any minor children involved. It designates who should handle the affairs. It can include or exclude family and friends from inheritance.
Wills can help avoid further legal entanglements and make donations to charity. They can also lay the foundation for a smooth probate process that requires very little time or stress on your family’s behalf.
Probate Real Estate is Our Speciality
Whitestone Acquisitions specializes in purchasing probate properties. We are experienced with Texas probate procedures and our goal is to provide solutions that are custom-tailored to your individual circumstances.
Our purchase process is simple!
Your no-obligation appointment consists of a site visit with an experienced Field Analyst
Analysis and Assessment
We return an offer within 24 hours
Formal Offer Submission
If our offer is accepted, we submit the contract to a licensed broker for review
Title Search Process and Closing Coordination
This usually takes 10 days or less, depending on the title search
Conducted at the title office or a notary, for your convenience
We offer principled home buying with exceptional market knowledge! Trust the sale of your probate property to a company that specializes in making the process as efficient as possible.
Our team is comprised of a licensed broker and agents, with experienced support staff. We are a locally owned company of tight-knit decision makers knowledgeable in the markets where we live and work.
We offer flexible, personalized solutions and our experienced title agents will be happy to guide you through the process! If you’d like more information, call (844) 207-8857 or visit our website.