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Probating a Will

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What happens in an Independent Administration


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Letter to Friends and Clients

The document below is a letter to our best friends and clients explaining the general process of probating a Will in Texas. It is intended to provide information for clients so that they gain an understanding the process of probate as it relates to preparing estate planning documents. Generally speaking, this document addresses issues associated with an intermediate or complex estate in an Independent Administration including funding of a trust or bypass trust and the filing of IRS Form 706. We discuss an Independent Administration here for several reasons. First, an Independent Administration is among the least costly of all available probate procedures in Texas. Next, it requires the least amount of Court supervision. Finally, it is the most commonly used procedure in Texas. Many other proper probate procedures may be used in other estates such as Probate as a Muniment of Title.

Dear Friends and Clients:

The general process for probate in Texas is simple and, in context to the size of any certain estate, is not costly. In this letter, we outline and discuss each major step of an Independent Administration and include a basic description of what needs to happen at each step. Additionally, this letter provides a basic treatment of estate taxes and bypass trusts. However, this document does not discuss alternative procedures, will contests, litigation, and procedures that may be employed to obtain a Will from a safe deposit box or from another person.

During any major illness and certainly after your death, your spouse, close friend, child or other person named as an Executor in your Will should hire a Lawyer. Hiring a lawyer will save valuable time and money. Your Executor should avoid wasting your time with any sort of self-help or what may be commonly referred to as pro se representation – purchasing self-help forms, scanning and re-printing forms, or copying forms from the internet. Even in cases where an Executor successfully files paperwork and sets a hearing to probate the Will with the clerk of court, most judges simply refuse to entertain such a proposal. Some judges even regard it as the unauthorized practice of law and will require a knowledgeable lawyer to complete paperwork, set hearings, and present evidence, motions, and orders.

Even with lawyers, judges, and other authors warning about pro se practice, we see it routinely attempted as we sit with our clients in the courtroom. We have seen people approach the judge’s bench and be turned away. Additionally, family members or heirs have tapped me on the shoulder and asked did they have to have a lawyer? The only thing that I can do at this point is say when the clerk or judge calls your name or case, briefly explain your situation. Except for rare and limited circumstances, judges do not allow the probate of a Will without a lawyer – all of the paperwork and filing fees, travel, and other works completed by your executor may be in waste. Sometimes, the entire procedure to this point must be repeated. Simply, let your Executor know – do not use any form of self-help!

Hiring an experienced lawyer is the key to the smooth and cost effective probate of a Will. A knowledgeable lawyer can talk with your executor and explain the process required to probate a Will and administer an estate. If your Will creates a Bypass trust or other Trusts to implement a tax plan, manage property of your children, or for other reasons consideration should be given to the attorney’s experience handling trusts. An experienced lawyer will guide your Executor through the steps that are required in the probate process.

Because the process starts with a Will, your Executor will need to know where your original Will is stored and have access to it. If your executor does not have access to a safe deposit box where the Will is stored, the lawyer can help him have the Will deposited with the Court. This process begins with the attorney preparing and filing a Motion and Order to open a safe deposit box and have important instruments found there delivered to the Court. This is a fairly simple process, and we have been successful in filing and obtaining an Order and inspecting the contents of a safe deposit box all during the course of the same day. Because the court order delivered to a bank requires the bank to send a Will directly to the court, your lawyer should ask the bank to make a photocopy of the Will without removing any staples or manuscript covers.

While many Wills are stored in safe deposit boxes, the executor’s knowledge of the location of your original Will cannot be overemphasized. Not only can the lack of such knowledge result in unnecessary and costly searches, but there should be only one original! If, by some chance, the attorney or any other self-help procedure used to prepare the Will allowed it to be executed in multiple originals, each original must be located and filed with the Court. Many professionals such as you are accustomed to executing business contracts in what are legally referred to as “multiple counterparts” for convenience and so that each party to the contract receives an original. We routinely prepare documents for our business clients in this manner. However, A Will is not a business contract and should not be executed in multiple originals. Any lawyer or self-help source that suggests executing multiple originals of a Will should not be followed. The failure to file all originals of a Will can result in a ruling by the court that denies probate of the Will.

After obtaining the Will, your executor will need to deliver it to his attorney and provide a few basic background facts to prepare papers with the court. In the event that the executor delivers an original to the attorney, he should receive a Receipt. Most of these facts should be well within your executor’s knowledge or available from documents such as an original Death Certificate. The attorney will use this information and any applicable documents to prepare an Application for Probate and Issuance of Letters Testamentary, which must be filed with the court along with all originals of the Will. This Application can normally be completed on two pages and describes certain facts about you, your Will, and your estate.

After preparing the Application and discussing it with your Executor, the Attorney will file it or cause it to be filed with a court of competent jurisdiction. A court of competent jurisdiction means the correct or proper court. Generally speaking, this court is the probate court or county court that hears probate matters in the county where you were residing when you passed away. When the Application is filed it must be accompanied with a Filing Fee, which, in the Harris County Probate Courts, is currently $158 for an Independent Administration. The Clerk will provide a filing receipt which shows the court docket number, fees paid, and provides a return date for the Notice and Citation. After completing the filing receipt, the Clerk sends the Application other county staff who prepare a Notice and Citation. The Notice and Citation will be posted in a special location at the courthouse and returned to the Clerk after the return date or about 10 days following the filing date. After the Notice and Citation have been posted for slightly more than a 10-day mandatory waiting period, your executor’s lawyer will set a hearing to have the Will admitted to Probate and to have a named person in your Will appointed as executor of your estate. Your attorney in the interim should notify your Executor of the hearing date and prepare him for what will happen at the hearing.

After preparing for the hearing, your Executor goes to court. At the hearing, the lawyer will ask your Executor questions under oath and in front of the Judge’s bench. Near the end of the hearing, the Attorney will present an Order to the Judge. That day or very near thereafter, the judge will sign the Order and your Will is admitted to probate and the Executor is appointed. To avoid delays and extra costs, immediately following the hearing, your attorney should also have the executor take and sign an Oath before the clerk. In addition to signing the Oath, the Executor will sign a document often referred to as “Proof of Facts” containing his testimony. Immediately upon leaving the court room, the Lawyer should take the executor to the Clerk of Courts Probate Department and order Letters Testamentary, which are normally mailed within the week. Once the Executor receives Letters Testamentary, he may proceed with collecting the assets of the Estate.

Many deadlines run from the date of the hearing where your Executor was appointed by the court to serve in this important fiduciary capacity. First, within 30 days after your executor qualifies, her lawyer will prepare a statutorily required Notice to Creditors and arrange for it to be published in a paper of general circulation in the manner prescribed by law. This important notice is designed to let your creditors know where they can file claims to recover money they may be owed. Regardless of whether there are actually any creditors, this notice must be published! Even if no creditors respond to this notice, your Executor may desire to send a “permissive notice” to creditors that will serve to bar them from ever otherwise attempting to collect money from your heirs or your estate and its beneficiaries.

At this point, the true administration of your estate begins with locating, identifying, and valuing all of the assets of your Estate. Locating and identifying assets can be the most time consuming and costly part of the process of administering an estate. Because of the innate difficulty in determining all of your assets we have prepared a free estate planning document in Microsoft® Word that you may download and edit to detail all of this information. As a general rule, the more well-organized your assets are, the easier it is for the lawyer and your Executor to complete the process.

Up to the point where your executor receives Letters Testamentary, the lawyer will have been responsible for most of the work. With the Letters Testamentary, a transition may be necessary especially in estates that only required a basic level of planning. However, the executor may desire that the attorney continues to assist with the search to determine the nature and size of your estate and assists your Executor in the administration. If so, your Executor should be assured of the tasks that he wishes the Attorney to complete and that the lowest cost staff is used to complete these tasks. If you have a well-prepared record and supporting documents for the assets and liabilities of your Estate, the process will be simplified and save your estate a great deal of administration time and expense.

With all of your assets identified and valued, your executor and his lawyer will complete the final paperwork that must be file with the Court in an Independent Administration. This final step is the filing of an Inventory, Appraisement, and List of Claims (“Inventory”) of your estate. Most lawyers regard the filing of the Inventory as the final step in an Independent Administration. The Inventory must be filed within 90 days of the date that your Executor qualified. In complex estates or estates where there is no compilation or organization of property as would otherwise be listed in an estate records template more than 90 days may be required. Additionally, if your estate is valued near or over the applicable exemption equivalent, the inventory should be completed on the applicable schedules of IRS Form 706. This method of preparing the Inventory should prevent any confusion or transposing of values for taxation purposes. If so, your executor’s lawyer should file a motion with the Court for an extension of time to file the Inventory. When the lawyer files the Inventory, he will present an Order to the Judge for approval of the Inventory. When the Judge signs the Order, the Executor, generally, does not need any other court approval for the administration of the property of your estate. If the Inventory seems complex, don’t worry; it is not as detailed as you may think. It is simply a listing all of the assets that passed under your Will. The inventory may not include everything you own at death for several reasons. First, Inventories do not include any real property located outside of Texas. Second, unlike property passing under your Will, some property such as bank accounts, life insurance proceeds, annuities, retirement plans, and IRA’s may pass by a governing contract or beneficiary designation.

After the Inventory is filed, the judge will sign an Order filed as part of the Inventory. Generally, from this point forward nothing requires court approval, provided that your Will contained a provision for the creation of an Independent Administration. Upon the approval of the Inventory, the dependent nature of the administration is terminated and your Executor has the power to deal directly with the property listed on the Inventory.

When your Inventory is filed, your Executor should know the extent and value of your gross estate for estate tax purposes. An estate tax return may have to be filled and certain properties may need to be appraised. No matter what, if your estate exceeds the equivalent exemption amount, currently $2 million in 2006, your Executor will be required to file a federal estate tax return nine months of your death, unless an extension of the time to file and/or pay is granted. Should your Executor fail to file a return and pay the taxes, he can be personally liable. Appreciating that death tax rates are currently about 50% of the amount over the applicable exemption amount, you can see the benefit of using the tools to reduce the value of assets and remove assets from your estate that we outline in basic, intermediate, and complex estate planning to avoid these taxes.

Many issues can impact the size of your estate and the need to file an IRS Form 706. Common examples include changes in the applicable law and life insurance proceeds. Currently, the estate tax exemption equivalent is $2 million for the year 2006 and increases thereafter, but reverts back to $1 million in 2011. With regard to life insurance, unless you have created an Irrevocable Life Insurance Trust, significant life insurance proceeds may be included in your estate that may cause it to be taxable.

In 2006, because your estate presumably consists of only half of your and your spouse’s combined assets, an estate tax return would not be required unless together, you have assets exceeding $4 million. Special rules apply in calculating the size of the estate and the manner in which property is held may have a dramatic effect on the size of an estate and lead to unintended tax consequences. Nonetheless, if the value of your gross estate exceeds the applicable exemption amount an estate tax return must be filed even if no estate taxes are owed by your estate. Additionally, your Executor may be required to file income tax returns for your estate.

If your Will creates a bypass trust to avoid or minimize the impact of estate taxes, your executor, his CPA and financial advisors, along with his lawyer, will need to determine which properties to place in trust. To protect the estate, your Executor, and to document the transactions of the estate for use in any IRS audit, we prepare an Estate Closing Memorandum, Estate Distribution Agreements, Partition Agreements, and Funding Schedules for Trusts. Assuming that you and your spouse only own community property, one-half of the value at your death would be available to fund the Trust, subject to deductions for expenses and administration, and non-testamentary transfers that occur as a result of other contracts and beneficiary designations. Rarely is it necessary or desirable to divide ownership of all property between the Trustee and your surviving spouse to fund trusts. Instead, as a general rule, it is often more desirable to have certain items producing income or having other tax benefits solely owned by your surviving spouse and growth assets placed in the trust to the extent that this is possible. As final note, the process of funding the bypass trust can be a bit time-consuming and most certainly requires competent financial advice.

With regard to personal items or personal effects including art, jewelry, clothes, and things such as automobiles are concerned, they will be distributed as provided in your Will or as provided in a memorandum allowed by your Will. Often, we provide for complex estates that the Testator, person preparing the Will, may draft a separate Memorandum to dispose of these types of personal property including any precatory wishes with regard to that property. If your Memorandum includes precatory wishes or desires, your Executor will decide the extent to which these wishes should be carried out.

In summary, this document has explained the process required for Independent Administration of your estate. For practical purposes it has outlined that your Will was admitted to probate and other documents were filed with the Court such as an Inventory, and based upon other requirements your trusts were funded and a Estate Tax Return was filed. According to your Will, your surviving spouse or other persons designated in your Will receive the property that you have gifted to them. If your Will established a Bypass trust, it will have been funded and your surviving spouse will receive income and principal, pursuant to the terms of the trust.

We hope that you find this information clear, concise, helpful and not overbearing with technical complexity. If you have questions or require additional information, please contact us at 713-861-8300.


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Copyright 2006 The Overton Law Firm, P.C.
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