When a person creates a will, one of the important parts of that document is appointing someone to become the executor of the will. The executor does nothing more than executing on the wishes of the deceased person. If you are named as the executor to a person's will and then accepted the position, you are responsible for ensuring that property is distributed to beneficiaries and that creditors are paid whatever is owed to them. How you get to the point of doing so depends on the probate process and whether or not you even need to probate the will.
If we suppose that you do need to probate the will that you have been appointed the executor 2, you will have an initial hearing with the court where the probate judge will certify the death of your loved one and then will make you the official executor. At that point, the onus is on you to follow through with the procedures and process of the probate court as well as to work with beneficiaries and creditors alike. This is a significant responsibility. However, you can take heart in that you are not left to your own devices as the executor.
Rather, as executor of the will, you will be able to follow the wishes of your deceased loved one and can rely upon the court for guidance if necessary. Much of this will depend upon whether yours is an independent administration or a dependent administration. Most probate cases in Texas are independent administrations, meaning that the court will not be looking over your shoulder as you attend to your role's necessary functions: distributing property to beneficiaries and paying creditors. On the other hand, in a dependent administration, the court must approve the decisions you make in paying debts and distributing property to creditors.
What must the executor do after an initial hearing?
After the initial hearing takes place and you are sworn to be the executor of your loved ones, you will have 90 days by which she will need to have filed an inventory of the property and assets involved in the estate with the court. The inventory will go through all of the assets that are going to pass through the will. Certain types of property do not need to go through probate to be distributed to beneficiaries. You can work with your attorney to determine what those assets are.
Once you have filed the inventory, it is up to the judge to approve the items contained within the document. This is most of the work that must be done through the court process. You will still have bills to pay; they will need to file an income tax return. Finally, the property contained within the inventory must be distributed according to the terms of the will. Be careful to keep some funds aside where possible in a separate account so that creditors can be paid if they come back after completing the distribution process.
A tough position for you to find yourself in is being the administrator of a loved one in a state when there is no will in place. Keep in mind that the will not only provide you with clear context as to how your loved one wants their property divided at the time of their passing, but it also gives you protection if beneficiaries or heirs are upset with how properties are being divided. You can tell these folks that you are simply following instructions and using your judgment or wishes to follow suit in this regard.
However, you may find yourself in a situation where no one will be followed and that you are attending to matters as the administrator of your loved one's estate. In that case, you may be in a position where these potential beneficiaries or heirs may not be in agreement with each other on how property should be divided; it may not be an agreement with you, for that matter. In fact, without a will and many beneficiaries, it is almost guaranteed that these parties will not agree on every aspect of the case.
This is where a dependent administration will come into play. A dependent administration involves the court determining which assets should be sold to pay for the costs of a probate case and how the remaining portions of the state should be divided according to Texas state law. Mounting claims of creditors and the normal paperwork associated with a legal case are other factors to deal with in a dependent administration. Among all the other good reasons to have a will, this is one of the important reasons why a will should be created.
A worst-case scenario for a situation like this would be that the heirs cannot agree or dispute how property is divided. This can even happen with beneficiaries under a will if there is some issue with its validity. All that is to say, a trial is possible in a probate case that could involve significant time and money. All the more reason to have both an attorney and a will. Having both will help you avoid finding yourself in a protracted legal battle regarding the estate of a loved one.
What is a bond in the context of a probate case?
If your loved one went to an attorney to have their will drafted, then it is likely that the attorney included language in the will that waives the necessity of posting a bond to probate the will. In this case, as the executor of the will, you would not have to post any money to keep in case of any issues or fees associated with the case. However, if there is no will or if the will does not waive the posting of a bond, you need to be prepared to put some money up to proceed with the probate process.
Specifically, the need to post a bond will depend upon if any debts need to be paid out of the estate's assets, the specific judge you are in front of, and if the heirs agree on the need to have a bond posted. In a best-case scenario type of situation, if the heirs agree that no bond needs to be posted, you may not have to post one, especially if there are no debts.
Probate bonds are typically required by County courts in Texas when the court appoints you to handle someone's state as an administrator if there is no will. A bond guarantees that any assets will pay the debts in the estate and that property will then be distributed according to the court's decisions. Attorneys are almost always required in situations like this. An executor bond is required when your deceased loved one left a will and named you as the person to serve as executor.
What to do about tax returns for the deceased's estate?
Whether serving as the executor or administrator of an estate, you will be required to prepare and file tax returns both for your loved one and for their state. Texas does not have a state tax on inherited wealth and only if your estate in question is valued at over $5 million is an estate tax need to be filed. Therefore, for the vast majority of the states in question, very little in taxes need to be considered.
When it comes to a federal tax return, you need to be aware of taxes on that person's state beginning from January and ending out with the time your loved one passed away. If your loved one was married at the time of their death and they filed a tax return together, then you add their spouse will file a tax return jointly that each of you will have to sign. If your loved one generated any income after their death, then that should be reported on the Estates tax return rather than on your loved one's income taxes.
How to finalize a probate case
The executor of a person's will bears many responsibilities. This is something that you Oracle quickly come to learn if you have never served as the executor of an estate before. It is important for you to be organized, diligent and intentional about how you act. Otherwise, with as many things going on regarding the probate case as possible, you may lose your place and have to repeat things. That costs you not only time but also money.
All the while, the more time and money it takes to wrap up a case, means less that can be distributed to beneficiaries through the probate court. If you are the beneficiary under someone's will, you can request updates from the court showing how money has been spent throughout the case on these kinds of expenses—the more money that is spent on expenses, the less that can be distributed through the state.
Any assets left in the estate after debts and taxes have been paid will be distributed according to the terms of the will. Texas law would determine how properties are distributed if there is no will in place. If your deceased loved one were married or had children, the assets would be distributed to their spouse and children in various percentages. If your loved one were not married, the assets would be distributed to close relatives like children, parents, and siblings.
When you die with a will you have autonomy over how property and assets are divided?
Put, when you die without a will, that means that you will have no ability to dictate exactly how property will be divided at the time of her death. This can be extremely disconcerting to many people who worked for years to accumulate a substantial amount of property or assets and then would not be able to have the property grass is distributed according to their wishes. Fortunately, you can draft a will anytime before your passing. It does not cost a lot of money to draft a will; you do not need to spend a lot of money to have it drafted in that hiring an attorney isn't even necessary in all cases.
Some people question whether or not it is necessary to have a will if you want your property to pass to your family and no one else. For instance, if you have a rather small estate in our marriage, you may assume that your wife and children will receive most of your property anyway, even if you do not have a will. However, even if the state's code would dictate that your property does go almost entirely to your family, then the process could be delayed a great deal of time because of backlogs in the court or other issues that you do not foresee. Therefore, having a will allows your assets and property to be distributed more efficiently than if you die without a will.
Next, having a will can allow for your estate to be divided up without the court having to look over the shoulder of the executor of the will. It is almost certainly true that even if the court appoints an administrator to distribute your property according to the inheritance laws of Texas, the court will also have to initiate a dependent administration where additional fees, bonds, and oversight from the court is required. This decreases the overall efficiency of a case and may end up costing money in the long run.
Finally, if you have a piece of property that you would like to have passed down to someone, not in your family, then you need to have a well-drafted. For instance, suppose that you have property or assets that you want to be distributed to your church or another nonprofit group at the time of your passing. Unless you have a will in place that states your intention in this regard, the Texas probate court would follow the Estates code and divide the property up amongst your close family. It would be challenging to ensure that the nonprofit ends up with the property, but she desires it too.
The closing stages of a Texas probate case
When you get to the stage of a case where all of the property and assets of an estate have been distributed to the beneficiaries, you, as the executor of the will, would have to issue a final accounting to the probate court. The same form will be sent to each beneficiary so that they know that the property of your deceased loved one was divided up according to the terms of the will. All property that was distributed and all debts that were paid will be included in this document. By following the document and an affidavit that you did so, you will conclude any responsibilities you have as executor.
If you act as executor of your loved one's estate, you can be reimbursed for any expenses that you paid on behalf of the estate. You should keep a careful record of the expenses that you incur, including dates that the money was spent, the purpose, and the amount. You can even be paid for the time you spent as the executor. You and your attorney should go through the will to determine how much compensation is allowed under the will. There are formulas set forth by the city of Texas as to how much in the way of compensation you may be paid. As long as you have fulfilled your duty sufficiently then, you can expect to be paid something in this regard.
Completing a Texas probate case can be arduous. There are many requirements, deadlines, and processes to be aware of, but this is likely to be an emotional time for you in the decedent's family. With so much ongoing at the same time, it would be wise for you to not only be aware of all the circumstances ongoing in the case but to seek help, especially in cases where you are dealing with many heirs, beneficiaries, disputes, or a large estate.
Consulting with experienced probate in estate planning attorney can not only help you in learning about the process, but you can also develop a strategy on how to navigate these choppy waters as a first-time executor.
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 probate law attorneys offer free of charge consultation 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 probate law and how the filing of a probate case may impact your family's circumstances.