For the most part, when I talk about executing a will, most of you reading this blog post will probably think about taking assets from a person’s estate and then delivering them to the people who are listed in the will itself as beneficiaries. Beneficiaries are not limited to a deceased person’s immediate family. Friends, co-workers, their church, charities, or other entities are all able to receive property out of a deceased person's estate. As a result, there is a limitless range of people and other entities that can be distributed property out of a will.
If you have been the beneficiary of a person's will, the feeling of sadness over the loss of a friend or loved one may have been replaced by questions about how the property that you were supposed to receive out of the estate would end up in your hands. It can sometimes feel like this transfer and distribution is taking forever when the reality is that the executor of a will must go through several steps first before he or she can transfer property to you in a will. This can be a difficult situation to get past considering that you may need the money soon.
What does the probate timeline look like in Texas?
Just like any other legal case that you may be involved with in Texas, your probate case is going to look different than anyone else's- even if you have been a beneficiary under a will before. This is because the deceased's estate situation is unique. It is not something where you can look at that person's estate and say "this is how" the estate is going to be divided up based on a certain timeline. How assets are divided is not a question of how quickly but rather a question of "when" and "what are the circumstances," The honest answer that an attorney should give you if you were to ask that question is that "it depends" on how quickly the probate case can be resolved and how readily the court approves the assets to be distributed by the executor.
Filing a will for probate is the first step that an executor must follow to ultimately reach a point where assets are going to need to be distributed. An executor is a person who is named in a will who will oversee executing the wishes of the decedent (the person who has just died). That executor will have to decide whether he must file the probate case or if he can distribute assets out of the decedent's estate without having to go through probate first. Much of this decision will depend upon whether there are debts associated with the estate. If there are debts, then those creditors will have to give notice of the decedent has passed so that they will have priority to receive the property.
Submitting the will to probate and then gaining the probate court's permission to execute the distribution of property is really what the probate process is all about. In Texas, the executor of a will has four years from the time of the decedent's passing away to file the will for probate. The executor owes a duty to the decedent’s estate as well as to the beneficiaries to not sit around and not move in one direction or another. Keep in mind that even after a person has died, their estate will still accrue taxes whether the will has been filed for probate or not. It is in the best interests of the estate that the probate process should begin as soon as possible.
Where does this put you as a beneficiary of a will if the executor is not moving towards filing the will to begin the probate process? You may be promised a specific amount of money in the will, but the taxes and other expenses associated with probating the will come out of the estate. This means that the more time that passes between the death of the person and the beginning of the probate process more time will have passed. Meaning increased taxes and the possible diminished value of much of the estate assets. This is where an argument that the executor is violating their duties to the estate can be made to challenge that person being appointed as executor of the estate.
An executor will also need to inventory the property that is a part of the decedent's estate. The decedent's estate may be comprised of tangible personal property, real property like land, and intangible property like investment accounts. As if things couldn't get more complicated, we see that non-probate assets like life insurance policies and retirement accounts can also be a part of the person's estate. These assets do not pass within probate and do not require probate to be distributed. Rather, they are passed through non-probate transfers. A retirement account allows you to list a beneficiary for the property to be passed down upon your death, for example.
What happens with the debts and taxes of a deceased person's estate?
The probate process can be straightforward in many cases. However, the single most important factor on how long the probate process will likely take has to do with whether the estate in question creditors has who needs to be paid. It is not so much the paying of these creditors based on the debts owed by the decedent. Rather, the process of confirming each creditor, notifying them of the probate case, and then waiting the requisite time to allow each to come forward to collect as much of their debt as possible is what can slow down the probate process.
What are the tax burdens that your decedent's estate must shoulder? In Texas, there are no estate taxes. There are still federal estate tax laws to be aware of if you are acting as an executor or are a beneficiary under a will, but the State of Texas does not have an estate tax on the books that you would need to concern yourself with. One issue to consider would be the location of the property contained in the decedent’s estate. If your decedent owns real estate in multiple states, then you may be in a situation where filing for probate in more than just Texas becomes a necessity. You should speak to one of the experienced estate planning attorneys with the Law Office of Bryan Fagan to determine whether this would be necessary. While it would be easiest to not have to go through these steps in some situations it may be unavoidable.
Smaller estates with relatively small amounts of debt may not take as long to probate as large, complex estates with multiple, large creditors. We see probate cases in Texas take anywhere from six to eight months on average to complete. Some of you may be shaking your heads, thinking that is a very long period. On the other hand, some of you may think that this is a reasonable length of time-based on your own experiences dealing with legal cases. If it is possible, talk with the executor of the will to determine their plans for getting the will probated. There is no law against you corresponding with him or her or attending probate court hearings to keep yourself up to date on the situation involving the will that you stand to benefit from.
How to plan when it comes to your estate
Having an attorney who understands how to plan with you is important. Creating a will that reflects your current financial and life circumstances and takes into consideration the needs of your family is a crucial step for you to take when related to end-of-life planning. Nobody knows when the time will come for an end to their life. For all of us, it matters how aware of this we are and how willing we are to build a solid foundation for our estate and for those of us to who we want to distribute property out of that estate.
Creating a living trust may be an option that is appealing to you if you want to limit the likelihood that your family and friends may have to go through a complicated and lengthy probate case to have property distributed to them after you pass away. A living trust allows the trustee to transfer any property contained in that trust directly to your beneficiaries withing having to go through probate and seek court approval to do so. For anyone who needs those funds quickly, this is an important step for you to take.
What impact does having a will have on the overall process of distributing property?
Having a will makes a huge difference when it comes to the distribution of property upon the death of a loved one. If that person passes away but has a will then that document will control those assets which are held in his or her name. Assets like IRAs, 401(k)s, and life insurance policies would still pass outside of probate no matter if he or she has a will or not. As we just discussed a moment ago, if you have a trust of some sort then that would also allow for the property contained within the trust to be distributed without having to go through probate.
Not having a will does not mean that your loved one’s property automatically goes to the State of Texas. This is a concern that I have heard many people talk about over the years. The idea that once your loved one dies without a will the State of Texas just gets to come over with a vacuum and suck up all his or her assets is a silly idea. The State of Texas, the Texas Estates Code, has laws regarding the intestate distribution of property. Dying intestate means that you die without a will. If you were to die without a will then the laws in the Estates Code would go into effect and your property would be divided according to those laws.
Keep in mind that dying without a will means that it is your immediate family that stands to inherit most if not all your property. For many of you reading this blog post that probably sounds ok to you. For others reading this blog post, you may not want your close family to inherit that much of your estate. If that sounds like the situation you are in then you need to be able to have a will so that your wishes for how property is to be divided can be granted. Otherwise, it is your immediate family that will stand to collect most if not all your property contained in your estate.
What does the distribution of property/assets look like after a Texas probate case?
If you made it out of the probate case in one piece, the final step is hopefully receiving the property promised to you as a beneficiary under the will. The case may have seemed like it was never going to end but you can now see a light at the end of the tunnel. While you are glad for everyone’s sake that you do not have to go through another court case anytime soon. Here is what the final stages of a probate case look like as far as the distribution of property is concerned.
An executor has three years after their appointment by the court to distribute any assets under the will that are not due to a creditor. The probate process in Texas is straightforward for most people who go through it. An executor must be willing to perform the necessary work and go through the steps that we have already discussed in today’s blog post to finish the job and fulfill their obligation as executor. Being organized, diligent and stable emotionally are great qualities for an executor to have.
One of the elements of naming an executor that many people do not think about is that not only will the executor need to be professional and intelligent, but he or she must be able to perform all the steps that we have discussed so far in today’s blog post while also grieving the loss of a loved one. Odds are good that if you are going to serve as someone’s executor then the person will be a relative of yours.
The administration of a will through the probate court can be closed out if all debts owed by the estate have been paid or at least paid as much as the estate's assets will allow for. This is when you as the executor or whoever is acting as an executor can motion the court to close the administration and then the case is done and over with. It can take somewhere between six to eight months to complete a probate case.
Closing thoughts on how long it takes for an executor to distribute assets
What we should have learned from this blog post is that there is no set time for a probate court case to wrap up, so there is also no set time for an executor to distribute assets to beneficiaries. You should not expect that the process will go quickly for you or your loved ones in a probate setting. It isn't practical. Understandably, you want to be able to get your hands on the money as quickly as you can but that is not realistic in most cases. Having to be patient in this regard while also grieving the loss of a loved one is not easy.
What can this teach us as people who may or may not have undergone any kind of estate planning to this point in our lives? For one, we should take care of business while we can. Tomorrow is not guaranteed. This is something that I mention time after time to people, but it is the absolute truth. If you have the time to think about any number of things having to do with social media, binge-watching the latest show, or anything else like this then you certainly have the time to think about your estate and end-of-life planning.
Nobody would say that this is a fun activity but then again- you’re an adult. Fun and adult don’t usually go together no matter how hard you try. Take care of those around you. If you are someone who has friends, charities, or any non-family entity whom you want to receive property out of your estate then you need to get that taken care of now with a will. We have already seen that without a will your property goes to your immediate family as a default.
Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan
If you have any questions about the material contained in today's blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed estate planning attorneys offer free-of-charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas estate planning as well as what can happen in your family if a probate case is filed.