Since more than half of all Americans never create a Will or estate plan, there is a strong chance you may one day have to help manage this type of estate. Fortunately, Texas provides four viable approaches for handling such matters — each with its own separate requirements and possible disadvantages. They are described below to make it easier for you to discuss your options with your lawyer.
Two approaches to handling an estate after someone died without a Will involve simply filing affidavits. The other two options include having a probate court help determine the official heirs of the person who died – or the formal filing (or request) for either a dependent or independent administration of the estate.
The four ways you can probate a Texas estate when there was no Will or estate plan
I. You might be able to file a Small Estate Affidavit.
Requirements for taking this approach – if the estate qualifies for it
- The estate’s assets, minus the homestead and exempt property, must have a total value of $75,000 or less.
- This affidavit can only be used to transfer title to a house that qualifies as a homestead. If other pieces of real estate are involved that require transfer, then this type of probate affidavit cannot be used.
Potential disadvantages of filing a small estate affidavit
- At least two witnesses and all distributees of the estate must sign this affidavit. Since each person who signs the affidavit can later be held financially liable for all future transfers or payments made relying upon it, potential witnesses (and other signatories) are often unwilling to assume such a large degree of financial responsibility.
- This approach cannot be used if the estate has any debts requiring payment. Since a court does not name a personal representative to handle all the estate’s assets and debts, there is no one eligible to handle the payment of debts.
II. You might be able to file an Affidavit of Heirship
Requirements for taking this approach
While it is not a strict requirement, this option is usually chosen when the only assets of the deceased that require title transfers are pieces of real estate.
Drawbacks to using an Affidavit of Heirship?
- Although some financial institutions will allow the transfer of title to other types of (non-real estate) assets under this type of affidavit, that final decision can only be made by that outside entity.
- No personal representative is appointed in this type of proceeding. Therefore, if the estate involved has debts, no one is authorized to collect all the assets together and then pay the debts.
- All title companies do not accept Affidavits of Heirship. Furthermore, some of these companies may only accept this type of affidavit after two (or more) years have passed since it was signed.
The main or “qualified” advantage of this approach is that it costs less than the following two ways of managing an estate after someone dies without a Will in Texas.
III. You can ask a probate court to make a formal Determination of Heirship
This option is designed to firmly establish the distribution of assets to all proper or legal heirs, under the Texas probate code’s intestacy provisions.
Advantages to taking this more costly approach
- This choice greatly reduces the chances of fraud that are more likely to occur under the first two options named above since they do not involve any court hearings.
- An attorney ad litem is appointed by the court. This person has the duty to investigate the decedent’s family history before submitting a formal report to the court (prior to its formal ruling on all the evidence presented).
Disadvantages to this approach to handling an estate when No Will was found
- This process is more time-consuming. However, it provides third parties with verifiable evidence that the court had legal grounds for approving the transfer of title during its probate proceedings.
- It is more costly since at least one court hearing will be scheduled.
IV. You can request either a Dependent or Independent Administration of the estate
This approach is chosen when the parties involved want the probate court to appoint a formal administrator of the estate. (The only real difference between a “dependent” or “independent” administration of an estate is the degree of court involvement. The dependent type normally requires more court involvement or direction).
Advantages of dependent or independent administration of an estate
- The court will appoint a personal representative and provide that person with formal letters of administration, granting that person the right to handle all negotiations with third parties regarding the estate’s assets.
- Third parties are more likely to quickly provide all required documentation and data requested by the appointed representative, helping to streamline the probate process.
Two possible drawbacks to this approach
- It is more expensive. While this is usually the most costly way to handle the estate of someone who has died without a Will, it can prove quite wise in the long run –since all matters will be carefully monitored by the court (even when handled by an “independent” administrator). This lowers the chances of a future need to return to court due to challenges based on fraud.
- It can prove to be more time-consuming. However, many people who can afford this approach consider it a very valid trade-off compared to only using affidavits that may not be acceptable to all parties.
Please don’t hesitate to contact one of our Murray Lobb attorneys when you need help managing the estate of someone else. Our firm has extensive probate and estate planning experience that allows us to provide you with fully trustworthy legal advice.