The period surrounding the death of a loved one is, without a doubt, difficult. Besides the obvious grief, you will experience, there are very likely financial, administrative, and other concerns that can take your time away from family matters and be there for one another. The overarching purpose of proper and prudent estate planning, as well as representation in that field, is to reduce the headaches and frustrations associated with the administration of an estate after your loved one passes away.
There are two ways that a loved one can pass away when it comes to their estate and the property contained within that estate: testate or intestate. You may have never come across those two terms before, but what they represent and mean are probably more familiar to you. Dying intestate means that your loved one died without an executed will to their name. Dying testate means that a valid and executed will exists for that person. Depending upon what situation your loved one found themselves in at the time of their death will determine how the administration of their estate will proceed.
If your loved one has a will, then there are a few roles that other people in their life will have played in the execution and creation of that document. After your loved one passes away, someone will need to be named the person who attends to the administrative matters with the will. The person who fulfills the wishes of your loved one pays creditors and hands out property according to its terms is called the executor of the will. This person will be named within the will. Many people will designate a secondary or "backup" executor if their primary executor cannot fulfill their obligations.
Additionally, any person named in the will who stands to receive property is known as a beneficiary under the will. A beneficiary can be a relative, friend, co-worker, business, non-profit organization, or church. The executor should not also be a beneficiary under the will. If the will must be probated (we will discuss this in a moment), then the executor must file the petition to probate the will and administer the will according to the instructions and orders of the probate court.
The trouble with these type of proceedings and issues are that they do not come up much in day to day life and you may therefore be unfamiliar with them in terms of how they will apply to your loved one and your family at the time your loved one passes away. Additionally, I wanted to address what an executor's responsibilities are in this type of situation. Does the executor have the ability to retain the property for him or herself? Can the executor deviate from the wishes of your deceased loved one if they deem that to be appropriate? Read on to find out the answers to these questions.
Cutting through the weeds when it comes to estate planning in Texas
What are your responsibilities as the executor of a loved one’s estate? You may have signed up and agreed to act as an executor without considering the actual responsibilities beforehand. This is a critical role to play in a person’s life. You will be acting as a fiduciary in agreeing to become the executor. A fiduciary is someone who has a legal responsibility to put another person’s interests ahead of their own. This means that in administering the will and disposing of property, you will need to put your loved one’s wishes as contained in the will ahead of your own beliefs regarding what is right or appropriate.
It would seem to me that this is an important lesson to learn. If you do not believe that you can fulfill these sorts of obligations and see the administration of the will until the end of the case, then you should speak to your loved one as soon as possible. The will may contain a provision naming a substitute or secondary executor if you cannot fulfill your duties. Your loved one should know about your thoughts as soon as possible so that either the secondary executor can be brought up to speed or the will itself can be changed to remove your name from the role of executor.
At a minimum, as the executor, you will be tasked with fulfilling the duties you have been assigned as honestly as possible. Simply put, the executor of a will takes the deceased person's wishes and then puts them into action. This means that even if you disagree with the person's wishes, you have the legal obligation to follow them. It helps to be a person who is diligent and task-oriented, in general. If you are in a position where you are creating a will, you should be certain that the person you are selecting to be your executor agrees to fill that role and is competent in these ways.
Filing a petition to probate the will
The primary responsibility will be to file a petition with a probate court to have the will administered. If you act as the executor for a loved one's will, you should file for probate in the county where your loved one passed away. The probate court may sound unfamiliar to you since it is not frequently discussed in the legal community. Simply put, a probate court is a court in which a judge will supervise the process of transferring your loved one's property to the beneficiaries of the will. Depending on the circumstances of your case, that supervision may be more or less stringent than others.
It may surprise you, but the court will not take your word for it that your loved one has passed away. Proving that they have passed away means waiting for a death certificate to be prepared. The judge will need you to submit the death certificate for review before beginning the probate process in earnest. Once you have been able to prove that your loved one has passed away after a short hearing, then you will be able to begin the process of probating the will.
The judge will decide whether you have the authority to act as the executor of the will. As long as you are mentally competent to do so and are named the executor in the will, this is likely a formality that will have to be dealt with. You will then be placed in charge of administering the will and estate. As the executor of the estate, you will be able to access bank accounts and other private information to follow through with the deceased person's wishes.
Gather up the property and prepare it for disbursal to beneficiaries
There are two parts to a person's estate: their property and their debts. Debts will need to be paid out of the property included in a person's estate. Any property left over is free to be disbursed according to the terms of the person's will. You will likely need to complete an inventory of the assets your loved one had, including real estate, vehicles, personal property, and financial accounts. Any insurance that is in place for the property will have to be maintained through the end of the probate process, or at least until the property is disbursed according to the will.
A tricky part of the process occurs if the loved one has a business that has to be managed after their passing. Setting aside the possibility that they had a business transition agreement with an employee already in place, there may be instructions as contained in their will that you need to be familiar with. These instructions could involve handling payroll for the company, how to handle the transition itself at the business, or other responsibilities like this.
Hiring an attorney to represent you to guide you in these parts of a case is what an experienced estate planning and probate attorney does for a living. For instance, the probate attorneys with the Law Office of Bryan Fagan not only have knowledge of probate law but have worked with clients getting divorced who also own businesses. In this way, our attorneys have a unique perspective on this subject that you will not find elsewhere. We offer free of charge consultations six days a week in person, over the phone, and via video, so today is the day to reach out to one of our lawyers.
Often, the will of your business owner-loved one may include provisions to create a trust to run the business in their absence. If not explicitly stated in the will, you may need to request permission from the court to do so. A trustee would be named who is charged with making decisions for the business according to the clearest understanding of your loved one's will.
Finally, you need to consider the location of your loved one's property when executing upon their will and estate. For example, let's suppose that your loved one owns property in Texas and other states. While the Texas probate court is the property venue to handle matters related to Texas real estate, it cannot issue orders or allow you to follow through on anything related to the real estate located in other states.
For the property located in another state, you will need to file a petition to probate the will as to that property in the state where the property is located. This means that the likelihood of your having to incur some additional costs increases dramatically as a result. Most executors can take those expenses directly out of the property as contained in the will. Once you do this, you should make sure to pay any creditors to whom your loved one owes money before sending out property according to the terms of the will.
Think about taxes and debts before you think about property
While we are on the subject, even though your instinct will be to make sure the beneficiaries of the will get the property promised under the will, you should tap the breaks on that for a moment. Specifically, you are responsible for making sure as many of your loved one's creditors are paid in full before distributing property out to beneficiaries. There is no getting around this fact. While you may be able to negotiate or reduce a debt downward, you will need to pay as many of the creditors as possible.
Those creditors will be made aware of the probate process and provided sufficient notice to stake their claim to whatever debts they are owed. At that point, the judge would decide what order the debts should be paid in if your loved one has insufficient property in their estate to pay all the creditors outright. Once you and the court have verified that each debt is correct, the judge will go about ensuring that the bills are paid.
Another less than fun topic to discuss in conjunction with probating a will is paying the taxes owed by the estate. If you have not done so, a tax return will need to be filed for your deceased loved one and their estate. If your loved one were married in the prior year, you would need to work with their spouse to confirm how best to go about filing- jointly or separately. You are responsible for filing taxes but are not responsible personally for the debts of the estate. You should not sign anything as an individual wherein you promise to pay any debt of your loved one.
Finally, there are the rather mundane issues of notifying Social Security of your loved one’s passing, their health insurance, credit cards, banks, etc., of their passing. In the tumult of their passing, you may not even have considered these issues. However, you need to tie up any loose ends of your loved one's estate, even if they seem insignificant in the immediate period after their death.
How to get the property to the correct beneficiary
Finally, once all the bills and taxes are paid, you need to make sure that the property contained in the will is distributed to the correct beneficiary. This can be easier said than done in situations where your loved one's beneficiaries are hard to locate. Many times, the death of a person causes relatives to come out of the woodwork to make themselves available for the distribution of property. Some of these folks may be distantly related to the individual who has passed away but is simply throwing their hat into the ring if any excess property needs to be distributed.
Other times, you will need to go through some effort to locate beneficiaries who are not close at hand. You may need to perform online research to find leads as to where people are. Once you successfully track these folks down, you can provide them with an update on the case and inform them of the will's contents. If a certain property is not accounted for in you will follow state probate law on distributing it. The judge will likely assist with this step.
Once all property is distributed and all debts are paid, your work is still not done. You will need to motion the court to close the estate and remove the executor's responsibilities from you. While being an executor is a serious responsibility, it is also a great honor. You can do much to honor the life of your friend by following their instructions and wishes and fulfilling your obligation to the best of your ability.
There is nothing wrong with admitting that you need assistance in this regard. You likely have a career, family, hobbies, and other responsibilities of your own. Rather than spend an extended period concerning yourself executing the will, it is a great idea for you to contact an experienced family law attorney. A lawyer can not only help guide you in the estate fulfillment process but can offer you perspective on your role and what is coming next in your case.
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 and probate attorneys offer free-of-charge consultations six days a week in person, over the phone, and via video. These consultations are a great way to learn more about estate planning and probate matters and how your family may be impacted by filing a probate case in Texas. I appreciate your interest in our law practice, and we hope you will join us again.
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