Wills and Probate

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Wills and Probate

At the Law Office of Joaquin & Duncan, L.L.C., we assist Texas residents in the preparing of estate plans, in the probate of wills, and the administration of a decedent’s estate.  Our attorneys can assist you in preparing a “Texas Wills Package” that includes a Simple Will, a Statutory Durable Power of Attorney, a Directive to Physician (Living Will), a Medical Power of Attorney, and a Designation of Guardian, all at an affordable price.

Wills  A will is a legal document that allows the person making the will (the testator) to direct and control the distribution of his or her property upon death.  In Texas, any person over the age of eighteen and of sound mind may make a will.  Each will is a unique and personal document that depends on the person’s own wishes.  However, Texas law provides certain requirements for the execution, revocation, and modification of wills.  Our attorneys can help you draft your will so that your assets are distributed according to your wishes, in an economical and efficient manner, while ensuring that it complies with state law.

There are three things every Texas will should contain:

1.   A provision for the estate to be probated by an Independent Executor;
2.   A provision eliminating the need for the Executor to post a bond; and
3.   A self‑proving Affidavit.

Independent Executor:  An independent executor is free to administer your estate according to your wishes with a minimum of court supervision and legal expense.  Naming an Independent Executor streamlines and simplifies the probate proceeding.

Eliminating the Executor’s Bond:  Texas law allows the testator to waive the posting of a bond by the Executor.  Waiving the bond for the Executor will save both time and money in the long run.

Self-Proving Affidavit:  A properly executed will should contain a “self‑proving” affidavit, meaning it will not be necessary to produce a witness in court to prove the will was executed with the required formalities.  This may be important if the witnesses to the will are deceased or cannot be found at the time of probate.  If the will was self‑proven, only the executor needs to give testimony at the probate hearing.  If the will is not self‑proven, a witness to the will must also testify at the hearing that the will was executed as required by law.

OTHER IMPORTANT DOCUMENTS

Statutory Durable Power of Attorney  This power of attorney grants to another person (your agent) the authority to manage your personal property, real estate, and/or finances if you become disabled, incapacitated, or for any other reason.

Directive to Physician’s (Living Will)  The Directive to Physician (also known as a Living Will) allows any competent adult to instruct his or her physician to withhold or withdraw artificial life-sustaining procedures in the event of a terminal condition.

Medical Power of Attorney  This power of attorney allows your designated agent the power to make health care decisions for you if you are unable to make them.

Designation of Guardian  Guardianship declarations for adults allow you to specify a person who would manage your day to day care of you and your property if you ever become incompetent.  Guardianship declarations for minors are typically included in a will, but can also be done as an individual document.

WHY YOU SHOULD HAVE A WILL?

If you die intestate (without making a Will), you do not get to choose who  receives your probate assets.  That decision is left to the applicable portions of the Texas Probate Code.  If you die intestate, the persons who inherit from you depends on whether you are married or single, whether you have children, and several other factors. It also may depend upon the type of property.  In addition, if you die without a will in Texas, your estate may incur additional and unnecessary legal expenses and delays in probate court.

On the other hand, if you do have a valid will upon death, your property can pass in the manner that you determine, in a simple and cost effective fashion.

Having a Properly Drafted and Executed Will Allows You To:

  • name the person who will act as executor of your estate;
  • specify that your executor serves without a bond;
  • provide for the independent administration of your estate;
  • make specific gifts of your property to the individuals or charities that you want to receive your property;
  • name guardians of your minor children in case of the death of you and your spouse; and
  • set up a trust for the benefit of your minor children, delaying their receipt of the property until they reach a certain age, determined by you.

Having a will, alone, does not mean probate is unnecessary.  Although having a properly drafted and executed will makes the probate process simpler, probate may still be required for assets in the deceased’s name alone.

What Is Probate?

Probate involves identifying and inventorying the deceased person’s (the “decedent”) property, accounting and appraising the property, and then paying taxes and creditors with the estate assets.  Probate also includes the process of transferring legal title of property from the estate of the person who has died to his or her proper beneficiaries.  For example, if a person dies owning real estate, that person’s name needs to be removed from the real estate title and transferred to the name of the heirs.  Probate also refers to the process of proving the existence of a valid will or determining and proving who the legal heirs are if there is no will.

Texas is one of the easiest states in which to perform a probate.  Where certain requirements are met, Texas law provides alternative methods to distribute an estate, including one for small estates and one for estates where the only asset is real estate.

In Texas, small estates may even avoid a formal probate when the total assets are less than $50,000 (excluding the homestead and other exempt property), no petition to appoint a personal representative is pending or granted, and thirty days have elapsed since the decedent’s death.  This method is available when the decedent died without a will, and allows the heirs to collect assets by using an affidavit that is filed with the court.  If the affidavit is approved, it is recorded as an official public record.  However, this method only allows the transfer of title for real estate that was the decedent’s homestead.

If the person’s only asset is real estate, and there are no outstanding debts (other than debts secured by real property), the will can be probated as a “Muniment of Title.”  This method can be much less expensive and quicker than any other type of probate.  The effect of the muniment of title is to give legal authority to all persons who have any dealings with the estate to deal directly with the persons named in the will.  Unfortunately, this process exists only in Texas and most attorneys and financial institutions outside of Texas will not be familiar with it.  This could present problems if the decedent owned assets outside of Texas.

Normal Steps In a Texas Probate Proceeding

While each probate proceeding is unique, the following is a brief summary of what the process involves, assuming that the original, properly drafted and executed will is available to be probated.

  1. The original will is delivered to an attorney by the executor named in the will or another interested party;
  2. The attorney will file the original will with an Application for Probate of Will and Issuance of Letters Testamentary;
  3. The County Clerk will issue citation (or notice) and post notice at the courthouse that the Application for Probate of Will has been filed;
  4. After this notice has been posted for 10 days, the attorney will call the court and arrange a hearing date;
  5. The attorney and the named executor will go to the court hearing where the facts of death are proven.  If the will was self-proven, only the executor needs to give testimony.  If the will was not self-proven, a witness to the will must also testify at the hearing that the will was executed as required by law;
  6. When the judge approves the Application for Probate of Will, the executor will be administered the Oath of Executor;
  7. The Letters Testamentary are then issued by the Court.  Letters Testamentary are documents authorizing the executor to act for the estate and are the proof to others that the executor has been qualified by the court;
  8. A Notice to Creditors will be prepared by the attorney and sent to a newspaper for publication within one month after receiving Letters Testamentary;
  9. Within four months after receiving Letters Testamentary, the executor will give notice of issuance of such Letters to (a) mortgage companies and others with recorded claims against the estate of the deceased; and (b) other persons having outstanding claims against the estate if the executor has knowledge of the claim;
  10. The executor, with assistance from the attorney, will prepare an Inventory, Appraisement and List of Claims showing the assets of and claims against the estate as of the date of death.  The inventory will be filed with the court within 90 days after the executor is qualified by the court;
  11. A final federal income tax return for the year the deceased died must be filed by April 15 of the following year;
  12. Federal estate taxes must be paid if the estate is large enough (see chart below);
  13. If any creditors make a claim on the estate, the executor must, within 30 days, either accept or reject the claim or any part of it;
  14. The estate will be disbursed as provided for in the will; and
  15. New titles will be filed for any real estate, cars, boats and other titled property.

Estate Tax Exemption

In 2001, after ten years of debate, Congress passed legislation that will repeal the federal estate tax, a tax imposed on the assets left by the nation’s wealthiest residents.  The full repeal, however, will not take place until 2010 ‑‑ and in 2011, the estate tax will come back unless Congress votes to extend the repeal.  Currently, the estate tax affects only people who die leaving a taxable estate of more than $2 million.  The estate tax threshold will continue to rise until 2010, when the tax will be repealed.

Year Estate tax exemption
2005 $1.5 million
2006 $2 million
2007 $2 million
2008 $2 million
2009 $3.5 million
2010 Estate tax repealed
$1 million

TRUSTS  A trust is used to hold legal title to property for the benefit of one or more persons.  Many types of trusts can be created under Texas law, including living trusts (revocable trusts), testamentary trusts (under your will), and charitable trusts, to name a few.

Do you need a trust?  The answer is “maybe.”  Trusts are usually helpful where there is a need to safeguard and manage assets during your lifetime due to incapacity.  These trusts must be created prior to this incapacity if it has affected your mental capacity.  Secondly, trusts can be used to provide an income stream to minor children and young adults after your death.  These types of trusts can be incorporated into your will, and do not take effect until your death.  Third, trusts can be critical in avoiding estate taxation if your estate is big enough to be at risk for estate taxes.  However, there is no Texas estate or inheritance tax.  In most cases, the cost of setting up a trust far exceeds the cost of preparing a will.  Therefore, creating a trust in Texas simply so you can avoid probate is usually not cost-effective and often unnecessary.