Cost-effective Probate Alternatives When a Person Dies Without a Will
If your loved one passed away without a will, Texas law provides several options for settling the affairs of his or her estate. This article explains several of these options.
Texas is one of several states that allows for “independent” administration of a person’s estate after he or she passes away without a will (also known as “intestate”). Independent administration is a relatively simple way for the personal representative of an estate (commonly called an executor if the individual was named in a will or an administrator if the individual was appointed by the court) to collect and distribute a person’s assets to his or her heirs without the intrusive and cumbersome supervision by a probate court that would be involved in a “dependent” administration. Although the Texas Estates Code defines who gets what, it is up to the heirs to take the steps necessary to make it happen.
Independent administration is typically not available when (1) one of the heirs is a minor, (2) not all heirs agree (or have the capacity to agree) as to who should appointed, or (3) the estate does not have sufficient assets to pay its debts. Also, dependent administration may be preferable if the estate has significant debts, because procedures under Texas law make it much more difficult for a creditor to collect in a dependent administration.
However, even the simplified process of independent administration may be overkill for some intestate estates. This article will describe two alternatives that can be just as effective at administering an estate as formal probate proceedings, but with much less expense.
Affidavit of Heirship
An affidavit of heirship is a document that provides details as to the deceased’s family and marital history and identifies all of his or her heirs, real property, and unpaid debts.
Once it has been signed and notarized by two witnesses who are not heirs of the deceased, it is then recorded in in the real property records of each county in which the deceased had real property. It serves as evidence that title to the deceased’s real property has passed to his or her heirs. For instance, an affidavit of heirship is useful when the child of a single parent wants to sell the parent’s home, but the title to the home is still in the parent’s name. Most title companies and real estate companies will allow the heirs to sell the property after an affidavit of heirship is recorded.
Small Estate Affidavit
As you can probably guess from the title, a small estate affidavit can be used when a person leaves behind a small estate. In order to take advantage of this procedure, the deceased cannot have an estate worth more than $50,000, excluding the value of the person’s homestead and certain exempt property.
Like an affidavit of heirship, this document will list all of the deceased’s family and marital history and identify all of his or her heirs, real property, and unpaid debts. In addition, it will also list the person’s other assets, such as vehicles, bank accounts, and household belongings. This affidavit needs to be signed by two disinterested witnesses, as well as all of the person’s heirs, and it is filed with the probate court for approval.
A small estate affidavit cannot be used if (1) the estate has more than $50,000 in assets, excluding the homestead and exempt property, (2) the assets must exceed the liabilities of the estate, and (3) the estate has land other than the homestead.
Once the affidavit is filed, the probate court will consider the affidavit. If the judge determines that the affidavit meets the requirements provided by the Estates Code, the judge will sign an order approving it. The judge’s order can then be used by the heirs in case they need to show that they have authority to take possession of and distribute the deceased’s assets.
The small estate affidavit is a procedure that is relatively unique to Texas. For this reason, even though Texas law permits the heirs to take possession of and distribute a deceased’s assets, heirs may encounter resistance from people from other states who are unfamiliar with small estate affidavits. This problem most frequently arises in financial institutions that are headquartered somewhere else or that have branches throughout the country. You should make sure that the company or bank holding your loved one’s assets will be willing to distribute the property if a small estate affidavit is approved.
Roger Jain is a dedicated trial lawyer who assists his clients in the following areas of practice: civil litigation, business law, criminal defense, juvenile law, estate planning and family Law.