Where There’s No Will, Is There A Way?
by Barkley T. Miller and J. Ellen Bennett
When handling a decedent’s estate where there is no will (intestacy) or where there is a will which fails to distribute all of the estate or perhaps fails to appoint an executor (partial intestacy), will you be able to find a legally effective way to proceed with such an estate? You will, but only after carefully reviewing the estate and applying legal procedures appropriate for the family dynamics involved.
First, examine estate assets and look for beneficiary designations and survivorship provisions. Under the Texas Probate Code (TPC), non-probate assets such as joint ownership accounts with right of survivorship, annuities, and life insurance death benefits payable to a third party other than the estate, are not assets subject to the jurisdiction of a probate court.
Next, rigorously examine the estate’s debts and determine whether the estate is solvent, the current status of estate indebtedness and the types of debts, such as secured or unsecured, federal or state tax issues, etc.
After reviewing available asset and debt documentation, assess whether the decedent’s family is capable of working with you and with one another in a probate proceeding. Choosing the right probate procedure to fit your case facts often depends upon whether all interested parties can put aside interfamily conflict during the probate process.
The court-created independent administration procedure (TPC §145(e)) requires that all estate distributees agree to having the estate administered largely free of court control and to designate an independent administrator who is willing and able to so serve. In this connection, the independent administrator may be required to post a bond, so a financially solvent personal representative is a must.
On the other hand, dependent administration is the only viable probate option when it appears that a decedent’s family is dysfunctional. The court supervises and closely controls the dependent administrator’s actions. The dependent administrator must post bond. The obvious downside is that if no family member or friend is bondable, the court will appoint an attorney, often proving costly for the estate. The upside, however, is that there is a large degree of protection from creditors due to the technical and often onerous legal procedures required by law.
If there is no necessity for administration, three alternate probate options are: affidavit of heirship, small estate affidavit, and a proceeding to determine heirship.
The affidavit of heirship (TPC §52, §52A) option is available in narrow circumstances only, usually to transfer real estate; it does not allow administration of any property. The affidavit of heirship procedure may run the risk of omitting an heir, so exercise caution. Moreover, all heirs and two disinterested witnesses must sign the affidavit, so family agreement is important. On the plus side, the affidavit of heirship not only avoids the four year statute of limitations period from death applicable to administration procedures, but an affidavit of heirship that has been on file for five years or more in the deed records is prima facie evidence of heirship.
The small estate affidavit (TPC §137) is similarly available in narrow circumstances. Estate assets cannot exceed known estate liabities, not including liabilities secured by homestead and exempt property. Also, the value of the entire estate, not including homestead and exempt property, cannot exceed $50,000. Family agreement is necessary: the small estate affidavit must be signed by all distributees and two disinterested witnesses. The small estate affidavit can be used to transfer title to real property only if the real property is the decedent’s homestead and is the only real property in the decedent’s estate.
A proceeding to determine heirship (TPC §48) is an option to consider regardless of whether there is a necessity for administration. All heirs, including unknown and purported heirs, must be joined in the action. The proceeding may be brought by a personal representative of the estate, an estate’s secured creditor, an owner of at least part of a decedent’s estate or the guardian of the estate of a ward. An attorney ad litem will be appointed to represent unknown heirs, which is also the case in any intestate estate requiring administration.
Although an intestate or partially intestate estate presents many legal and familial issues, including heavy documentation requirements up front, your careful legal analysis of such a case will result in finding theright way for your client in the absence of a fully valid will.