Probate Court No. 1
Probate Court No. 2
Probate Court No. 3
Probate Court No. 4
Probate Court No. 5
Thank you for taking the time to familiarize yourself with the information in this handbook. The purpose of this handbook is to serve as a reference guide, highlighting specific issues and requirements necessary to administer an estate. We hope the information provided enhances your understanding of this process. Should you be appointed as Executor or Administrator of an estate, this handbook will assist you in serving in such capacity in a thoughtful and competent manner. If you have additional questions or concerns, your attorney and our staff are available to provide assistance.
Throughout this handbook, photographs of Houston’s most iconic and historic places are included to demonstrate the importance of “preserving the legacy of our forebears.” The photography was provided by Abigail Butts and historical facts and details about the properties located in Sam Houston Park were obtained by The Heritage Society at Sam HoustonPark. We would like to express our gratitude to The HeritageSociety for providing this information as well as for their continued work in preserving the memories and relics ofHouston’s most important chapters in history.
The buildings pictured on pages four and five of this hand-book provide a glimpse into the life of early settlers in the greater Houston area. Both Americans and immigrants, all having diverse backgrounds, settled Houston and provided the original stock for the melting pot of cultures it is today.
The Kellum-Noble House, pictured on page five, was built in 1847 by Nathaniel Kellum. It is the oldest residential structure still standing that was constructed in Houston. Remarkably, the structure retains its original brick walls made from clay obtained from Buffalo Bayou. The home features a wrap-around porch and is reminiscent of the Greek Revival style commonly found in Louisiana. The Noble family later acquired the home and in 1851, it was redesigned by Zerviah
Noble and her daughter, Catherine, to become one of the first schools in Houston.
Several historic properties serve as reminders of the large immigrant population that came to Texas in the 19th century.The San Felipe Cottage, pictured on page five and built in1868, illustrates the type of architecture used by German immigrants. Though the house was occupied chiefly by German families, there were also those from England, Ireland, andSwitzerland who lived there over the years. Another striking example of the influence of German and Swiss immigrants in19th century Houston is St. John Church. Built in 1891, the church’s architecture exhibits a local take on the Gothic Revival style that was popular at that time. It was built to accommodate the Evangelical Lutheran congregation of immi-grant farmers who lived northwest of Houston.
In addition to the various immigrant populations settling inHouston, settlers and former slaves came from other parts of the United States to find new homes after the Civil War. The Yates House, built in 1870 and pictured on page five, was constructed by an emancipated slave, Reverend John HenryYates. The home was originally erected in Freedmen’s Town, a Houston community built by former slaves. The timing of this home’s construction is significant because it occurred only five years following the passage of the 13th Amendment, demonstrating the resilience and determination of this community to integrate into society as a free people. The Fourth Ward Cottage, featured on page four, evinces an-other example of Houston’s changing landscape after the Civ-il War. The cottage was originally built by German immi-grants in what later became Freedmen’s Town.
The front cover features the 1823 Old Place which sits inthe shadow of Houston’s modern skyline beneath thecanopy of mature live oaks in Sam Houston Park. It is anexample of early Texas frontier architecture. Also fea-tured is Heritage Plaza is a skyscraper located in theSkyline District of downtown and completed in 1987.
One of the first steps in administering a loved one’s estate is to determine whether he or she had a Will. If your loved one had been working on their estate planning, it is likely that they hired an attorney to help them. This attorney will be able to assist in locating any estate planning documents. If you are unsure whether your loved one worked with an attorney, he or she may have files in their home or office that contain records of meetings and correspondence with a lawyer, or drafts of estate planning documents. It is crucial to locate any Wills that your loved one may have left behind. Most of the time a Will is typewritten and is signed by at least two witnesses. In some cases, a Will may be entirely in the person’s own handwriting. If a Will exists, it may be filed with the court for probate. If a Will is not located, the estate may require administration in absence of a Will.
Application to Probate Last Will and Testament and for Issuance of Letters Testamentary
Once the Will is located, you will need to hire an attorney to file an Application to Probate Last Will and Testament and for Issuance of Letters Testamentary. The Application describes the background of the decedent, states relevant parties, and names the proposed Executor who will begin administering the Estate. In this filing, the applicant also requests the court to issue Letters Testamentary, which are documents that can be taken to banks, insurance companies, and other institutions to inform them that the court has authorized the Executor to handle the affairs of the decedent. A copy of the Will and any Codicils must be filed with the Application. The applicant may set a hearing with the court so that a judge may hear the Application.
Original Will and Codicil
Within three business days of filing the Application to Probate the Last Will and Testament, the original Will must be filed with the clerk’s office. If any Codicils were executed in addition to the Will, the original Codicils must be filed as well.
Proof of Death
In addition to the aforementioned documents, the Proof of Death testimony must be prepared and brought to the court on the date of the hearing. The Proof of Death testimony contains the decedent’s name, date of death, place where the death occurred, domicile, and information about the decedent’s family and marital history.
Hearing
After posting the Application and Will for a minimum of 10 days, a hearing may take place. At the hearing, a judge will determine whether to admit the Will for probate. The judge will hear testimony on the Proof of Death at this time. If the Will is not “self-proved” or if it is a holographic Will (entirely in the testator’s own handwriting), then the court will require additional witness testimony at the hearing. Your attorney will advise you on whether this is necessary. If the judge determines that the Will should be admitted to probate, the judge will sign an Order Admitting Will to Probate and for Issuance ofLetters Testamentary.
Oath and Bond
Once the Order has been signed admitting the Will for probate, the named Executor must sign and file with the court an Oath in order to qualify as an Executor. If a bond is required, the Executor should obtain a bond. Most often, bonds take the form of a surety bond rather than a cash bond. The bond acts to protect the estate assets from any malfeasance of the Executor. Once the Oath has been filed and the bond approved by the court, the Executor is qualified to receiveLetters Testamentary.
LettersTestamentary
Letters Testamentary authorize the Executor to act and manage affairs on behalf of the estate. The Executor will take Letters Testamentary to financial institutions, title companies, and insurance companies to demonstrate that they are the person authorized by the court to handle estate matters.
Sometimes, a Will fails to name an Executor or the named Executor is unable or unwilling to serve. In such cases, the beneficiaries under the Will may collectively designate a person willing and able to serve as an Administrator. When a decedent’s Will is admitted to probate and an Administrator is appointed, the Administrator will receive Letters of Administration with Will Annexed.
Notice toCreditors
Within 30 days of appointment, the Independent Executor must publish a notice to all creditors in a publication circulated within the county where the Will is being probated. This notice gives all creditors to whom the estate owes money the opportunity to claim the debts owed to them. The notice should include theIndependent Executor’s qualification date, address to which the claims should be presented, and the person to whom the claims should be addressed (usually the Independent Executor or an attorney). After publication, the Executor will file with the court an affidavit of the publisher along with a copy of the notice.
Notice toBeneficiaries
Within 60 days of qualification, the Independent Executor must send notice to all beneficiaries listed in the Will by certified mail, return receipt requested, or other qualified delivery method. This notice must include:
• The name and address of the beneficiary;
• The decedent’s name;
• That the decedent’s Will has been admitted to probate;
• That the beneficiary receiving the notice is named as a beneficiary in the Will; and
• The Independent Executor’s name and contact information.
A copy of the Will and the Order admitting the will to probate must be attached to this notice. A beneficiary may this waive notice by filing a waiver with the court.
Affidavit of Notice to Beneficiaries
Within 90 days of appointment, the Independent Executor or the attorney must file an Affidavit of Notice with the court stating that notice has been given to all beneficiaries. This Affidavit must include:
• The name and address of each beneficiary notified of the probate by certified mail or other qualified delivery method;
• The name and address of each beneficiary who filed a waiver of notice;
• The name of each beneficiary whose identity or address could not be determined despite the Independent Executor’s efforts to find them; and
• Any other information necessary to explain the Independent Executor’s inability to give notice to any beneficiary.
This Affidavit may be filed independently or at the same time as filing theInventory, Appraisement, and List of Claims.
Family Settlement Agreements
Family Settlement Agreements are favored under law and enable those interested in an estate to resolve disputes and solve problems associated with the administration of estates. Issues commonly resolved within the context ofFamily Settlement Agreements include: excluded family members, poorly drafted Wills, failure to appoint Executor, undivided interests in property, ambiguous familial relationships, and the questionable testamentary capacity of testator.
An Introduction to Heirship
Heirship proceedings enable the court to declare the heirs of a decedent who dies without leaving a Will or dies leaving a Will which fails to dispose of all of the decedent’s property. The heirship also allocates the share of community property, separate real property, and separate personal property to which each heir is entitled. Though an heirship can be a stand-alone proceeding to pass title, it is most often accompanied by an administration of the estate.
Independent Intestate Administration When a decedent dies without a Will, this is called dying “intestate.” The administration of an intestate estate can proceed as an independent administration or as a dependent administration. The process of administering an estate moves more quickly and is more cost effective in an independent administration because the Independent Administrator can perform his duties without having to spend time and money obtaining the court’s approval for each step of the process.
Application to Determine Heirship
The first step in an heirship is to file an Application for Determination of Heirship.Those who may begin heirship proceedings must be an interested person and include:
• The personal representative of the decedent’s estate;
• A person claiming to be a creditor or the owner of a portion of the decedent’s estate;
• A person representing a person claiming ownership of a portion of the decedent’s estate as guardian or next friend;
• The guardian of an estate for a decedent who was a ward, so long as the proceeding is commenced and maintained in the probate court in which the proceedings for the guardianship of the estate were pending at the time of the decedent’s death;
• A party seeking the appointment of an independent administrator; or
• TheTrustee of a trust holding assets for the benefit of a decedent.
An Application to Determine Heirship must include the decedent’s name, along with the date and place of decedent’s death. In addition, the Application must state the names and addresses of all heirs, as well as each heir’s relationship to the decedent and their interest in the estate. The Application must also delineate whether the decedent died testate, and if so, the disposition of the estate. Finally, the Application will include a general description of all property belonging to the estate or held in a trust, if applicable. Included with the Application must be a verification, signed by the applicant and notarized, stating that all information in the Application is true and correct and nothing has been omitted.
Attorney Ad Litem
With the Application for Determination of Heirship, the applicant should file a Motion for theAppointment of Attorney Ad Litem. The court appoints an Attorney Ad Litem to represent the interests of any heirs whose names and/or locations may be unknown. The court may also utilize such Attorney Ad Litem to represent the interests of any incapacitated heirs of an estate. The Attorney Ad Litem fees are paid by the applicant, but are administrative expenses that can be recovered from the estate.
Service of Citation and Publication
After filing the Application, all known heirs must be served with citation through the clerk’s office by certified mail. Each heir must be served individually if they are 12 years of age or older. If an heir is younger than 12 years of age, the applicant may serve a parent or guardian of the child. If any heirs choose to waive service of citation, they may do so by filing a waiver with the clerk’s office and service will not be required.
Service by publication is required by law in an heirship so that any unknown heirs may be made aware of the proceedings. The applicant will publish a notice in a local newspaper or other publication in the county in which the proceedings are being held, and also the county in which the decedent last resided, if different.
Affidavit of Service and Citation
After each heir has been served or has filed a Waiver of Service of Citation, the applicant will file an Affidavit of Service of Citation or the applicant’s attorney will file a Certification of Notice to Heirs with the clerk. Such affidavit or certification will state that the citation has been published, the name of each person who was served, and the name of each person who has waived service.
Consent of All Heirs
All heirs of a decedent’s estate must agree that the estate will proceed as an independent administration, otherwise, the court will permit only a dependent administration. The heirs must also agree on the appointment of an IndependentAdministrator. So long as the heirs of an estate agree and consent, an estate may proceed as an independent administration with an Administrator of the heirs’ collective choosing. If an heir is a minor child or an incapacitated person, such consent may only be obtained from the Guardian of the Estate of such person. Even then, it is discretionary with the Court as to whether the administration will be dependent or independent.
Application for Independent Administration
An interested person will file an Application for Determination of Heirship and for Letters of Independent Administration. The Application must be verified and will include, among other things, the decedent’s identity, domicile, and date of death, along with a list of all known heirs and the relationship of each heir to the decedent. The applicant will publish a citation in the newspaper to all known and unknown heirs of the estate and the applicant will serve citation on all known heirs or obtain their waivers of service of citation. The court will appoint an Attorney Ad Litem to represent the interests of heirs whose names or locations are unknown.
Heirship Determination
In the absence of a Will, the court will not grant the independent administration until it enters aJudgment Declaring Heirship. When the Attorney Ad Litem is ready to proceed, the court will allow a hearing to be set for the determination of heirship and for the appointment of an
administrator. The applicant will present testimony at the hearing as to the Proof of Death of the decedent. At least two disinterested witnesses will present testimony at the hearing as to the marital and family history of the decedent. The hearing on the Application for Determination of Heirship usually takes place immediately before the appointment of an Independent Administrator.
Judgment and Appointment of Administrator
Upon hearing evidence concerning the marital and family history of the decedent, the court will enter a judgment declaring the heirs of the decedent. If the court determines that administration of the estate is necessary and all heirs have agreed on the appointment of a qualified person to serve independently, it will enter the Order appointing such qualified person as Independent Administrator. Typically, the court will not require an administrator’s bond, provided the heirs collectively request such bond be waived.
Oath and Bond
Once the Order Appointing Independent Administrator has been signed, the named Independent Administrator must sign and file an Oath in order to qualify. In the unusual circumstance that a bond is required by the court, the Independent Administrator will obtain such bond, and upon court approval of such bond, qualify as Independent Administrator. The Independent Administrator may then order Letters of Independent Administration from the clerk.
Letters of Independent Administration
Letters of Independent Administration are letters that authorize the Independent Administrator to act and manage affairs on behalf of the estate. The Independent Administrator will take these Letters to financial institutions, title companies, insurance companies, and others to demonstrate that they are the person authorized by the court to handle estate accounts. Cash and investments will be transferred into an account styled in the name of the estate and the Independent Administrator will have access to invest and distribute these assets as necessary.
Distribution in Texas— Special Rules
Intestate distribution plans are set out graphically in pages 12 and 13 herein. Set out below are special rules to keep in mind when determining the distribution plan of an intestate decedent.
Distribution When Child Predeceases Parent Intestate
In Texas, if some of the children predecease the intestate decedent and at least one child survives the intestate decedent, then each descendant of a child who predeceases the intestate decedent is entitled to a distribution of the intestate decedent’s estate. Each such descendant shares in only that portion of the property to which the parent through whom the descend-ant inherits would be entitled if that parent had survived the decedent. If all of an intestate decedent’s children predecease him, then the grandchildren of such decedent take equal shares.
Who is a Child under Texas Law?
In Texas, for purposes of inheritance, a child is the child of a biological father if: 1) the child is born under circumstances which create a presumption of paternity; 2) the child is adjudicated to be the child of the father by court decree; 3) the child was adopted by the child's father; or 4) the father executed an acknowledgment of paternity. A child described above may inherit from and through his or her paternal kindred. Even if a child does not meet the criteria described above, he or she may petition the probate court for a determination of inheritance rights from a decedent.
By statute, Texas recognizes the doctrine of equitable adoption and adoption by estoppel. Modern Texas courts have held that a child’s knowing reliance on an agreement to adopt is unnecessary as the child’s belief in his or her status asa “child” is enough to support a claim of adoption by estoppel.
Independent Administration
Whether the independent administration is formed pursuant to the probate of a Will or upon the consent of all heirs, the personal representative serving independently must complete important tasks to settle the affairs of the decedent.
Qualification as Personal Representative
An Executor or Administrator is considered the personal representative of the estate of the decedent. After the court signs an order appointing the Executor or Administrator in an independent administration, the person appointed must sign an oath usually within 20 days of the date the court signed the order. Generally, a bond is not required in an independent administration, but if a bond is ordered, the court with state the amount of the bond in the order. The bond executed by an authorized corporate surety must be submitted to the court so that it can be approved within 20 days from the date of the order.
Issuance of Letters Testamentary or Letters of Independent Administration
After the personal representative has signed and filed the oath, and a bond, if required, has been approved, then the court clerk will issue Letters Testamentary orLetters of Independent Administration.
Notices to Creditors
Within 30 days of appointment, the Independent Executor or Independent Administrator must publish a notice to all creditors in a publication circulated within the county where the estate is being administered. Within 60 days of appointment, theIndependent Executor or Independent Administrator will give notice to all creditors known to have a secured claim by certified mail, return receipt requested, or other qualified delivery method. If a claim is filed by a creditor, the personal representative will consult his or her attorney to determine how to handle the claim. The Executor or Administrator should consult his attorney as to the advisability of sending permissive notices to unsecured creditors of the estate. Sending permissive notices to unsecured creditors prompts creditors to present claims within 121 days, lest such claims be barred.
Inventory, Appraisement, and List of Claims
Within 90 days of appointment, the Independent Executor or Independent Administrator must prepare and file an Inventory, Appraisement, and List of Claims or an Affidavit in Lieu of Inventory with the court. This Inventory must include a sworn verification. Preparation of the Inventory is one of the most important duties of the personal representative, as it is the personal representative’s fiduciary duty to beneficiaries to notify them and the court of the assets under administration. The Inventory will be prepared by the personal representative’s attorney and will include:
• All personal property of the estate, a description of the property, and the location of the property;
• All real property that is located in Texas;
• All property owned with others and the percentage interest owned by the estate;
• The characterization of each asset as separate or community property;
• The market value of each item of property on the date of the decedent’s death; and
• All claims that the estate has against others.
Estate debts will not be listed on the Inventory. In addition, real property owned by the decedent outside the State of Texas should not be included on the Inventory. If the Inventory is not approved, the personal representative must file an AmendedInventory. If an accounting must be filed with the court, the Inventory will serve as the starting point for the accounting.
Affidavit in Lieu of Inventory
If the Independent Executor or Independent Administrator wishes to keep financial matters private, or for other valid reasons, such personal representative may file an Affidavit in Lieu of Inventory. To file such Affidavit, there must be no unpaid debts except for secured debts, taxes, and administration expenses at the time the Inventory is due including extensions. The Inventory must be prepared and complete by the time this Affidavit is filed. The Affidavit must state that all debts, except for secured debts, taxes, and administration expenses, are paid and that all beneficiaries have received a verified, full, and detailed Inventory and Appraisement. However, in the following situations, a personal representative is not required to provide an Inventory to a beneficiary unless such beneficiary has made a written request for anInventory:
• The total value of bequests to which the beneficiary is entitled under the Will is valued at $2000 or less;
• The beneficiary has received all bequests to which he is entitled per the Will by the time the Affidavit is due; or
• The beneficiary has waived his right to receive a full, detailed Inventory in writing.
Form 706 Tax Return and Other Taxes
The Independent Executor or Independent Administrator should consult with his or her attorney to determine whether the estate is a taxable estate. Tax returns, including individual and fiduciary returns, may be required for both the decedent and the estate. Form 706 is an estate tax return, and if necessary, must be filed within 9 months of the decedent’s date of death, unless extended. In addition to the decedent’s final personal income tax return, the estate may also have to file an income tax return for the estate, or a Form 1041.
Introduction to Dependent Administration
The dependent administration of an estate usually occurs when a decedent dies without a Will. However, it may also be proper when a Will is probated yet fails to provide for an independent administration and the beneficiaries do not agree on the advisability of an independent administration. In contrast to an independent administration, a dependent administration is much more restrictive and must proceed with the court’s approval on each action taken by theDependent Administrator, with few exceptions.
Another reason to pursue a dependent administration is in certain cases where the estate is heavily indebted. With a dependent administration, the court has much more oversight and there are certain rules and priorities with respect to paying creditor claims which make it more difficult for creditors to collect on their claims. In addition, if an Administrator anticipates that there may be disagreement amongst distributees, a dependent administration may be a better option so that the court is involved and approves the decisions of the personal representative.
Dependent vs. Independent Administration
A key difference between dependent and independent administrations is that the personal representative is required to post bond. Because the personal representative has access to personal property belonging to the estate once the personal representative receives Letters, the bond acts as an insurance policy to ensure that the personal representative performs his duties appropriately.
The most important difference between independent and dependent administrations is that all acts by a personal representative require prior court approval except:
• Paying Taxes
• Paying a bond premium; and
• Insuring property.
The personal representative might wish to prepare a monthly budget to be filed as soon as practicable so that permission for the ongoing, routine expenses for a year maybe sought. Expenses and transactions outside the budget require separate approval from the court. No attorneys’ fees or compensation can be paid without court approval.
Qualification as Personal Representative
A Executor or Administrator in a dependent administration is considered the personal representative of the estate of the decedent. After the court signs an order appointing the Executor or Administrator in a dependent administration, the person appointed must sign an oath usually within 20 days of the date the court signed the order. The bond executed by an authorized corporate surety must be submitted to the court so that it can be approved within 20 days from the date of the order.
Issuance of Letters of Independent Administration
After the personal representative has signed and filed the oath, and a bond, if required, has been approved, then the court clerk will issue Letters Testamentary or Letters of Independent Administration.
Notices to Creditors
Within 30 days of appointment, the Dependent Administrator must publish a notice to all creditors in a publication circulated within the county where the estate is being administered. Within 60 days of appointment, the Dependent Administrator will give notice to all creditors known to have a secured claim by certified mail, return receipt requested, or other qualified delivery method. If a claim is filed by a creditor, the personal representative will consult his or her attorney to determine how to handle the claim. The personal representative should consult his attorney as to the advisability of sending permissive notices to unsecured creditors of the estate. Sending permissive notices to unsecured creditors prompts creditors to present claims within 121 days, lest such claims be barred.
Notice to Beneficiaries (Dependent Administration of a Will)
Within 60 days of qualification, the Executor or Administrator in a dependent administration that involves a Will must send notice to all beneficiaries listed in the Will by certified mail, return receipt requested, or other qualified delivery method. This notice must include:
• The name and address of the beneficiary;
• The decedent’s name;
• That the decedent’s Will has been admitted to probate;
• That the beneficiary receiving the notice is named as a beneficiary in the Will; and
• The Independent Executor’s name and contact information.
A copy of the Will and the Order admitting the Will to probate must be attached to this notice. A beneficiary may waive this notice by filing a waiver with the court.
Inventory, Appraisement, and List of Claims
Within 90 days of appointment, the Dependent Administrator must prepare and file an Inventory, Appraisement, and List of Claims. An Affidavit in Lieu of Inventory is not available in a dependent administration. The Inventory must include a sworn verification. Preparation of the Inventory is one of the most important duties of the personal representative, as it is the personal representative’s fiduciary duty to beneficiaries to notify them and the court of the assets under administration. The Inventory will be prepared by the personal representative’s attorney and will include:
• All personal property of the estate, a description of the property, and the location of the property;
• All real property that is located in Texas;
• All property owned with others and the percentage interest owned by the estate;
• The characterization of each asset as separate or community property;
• The market value of each item of property on the date of the decedent’s death; and
• All claims that the estate has against others.
Estate debts will not be listed on the Inventory. In addition, real property owned by the decedent outside the State of Texas should not be included on the Inventory. If the Inventory is not approved, the personal representative must file an AmendedInventory. If an accounting must be filed with the court, the Inventory will serve as the starting point for the accounting.
Duties of an Executor or Administrator in a Dependent Administration
An Executor or Administrator in a dependent administration is a fiduciary position and is required to act with the utmost care and in the best interests of the estate, while also considering the interests of persons who inherit from or have a claim against the estate. The Executor or Administrator should:
• Only keep enough funds in an estate checking account to pay debts and reasonable administrative expenses. Place all other estate funds in insured accounts inthe name of the estate.
• Obtain court approval prior to any expenditure of estate funds unless it the expenditure was for paying taxes; paying a bond premium; or insuring property.
• Keep all personal accounts separate from any estate accounts or assets.
• Preserve, protect, and insure (if insurable) all non-cash assets of the estate.
• Obtain court permission to move to an other state or be absent from the state for more than three months.
Annual Accountings
The law requires the Executor or Administrator in a dependent administration to account for all transactions and disbursements of estate property. An Annual Accounting is required to be filed each year within sixty days after the anniversary date of the Executor or Administrator’s qualification. The Annual Accounting reports the following information and must be verified and supported with vouchers and official letters from institutions managing cash and investments:
• Claims allowed, paid, or rejected by personal representative;
• Claims developing into a lawsuit and status of lawsuit;
• All property coming into the hands of the personal representative; • Changes in estate property;
• Itemized list of receipts and disbursements;
• Description of property being administered;
• Condition and use of property being administered;
• Cash on hand and description of personal property of the estate;
• Status of tax returns and taxes of the estate; and
• Statement that bond premiums have been paid.
Form 706 Tax Return and Other Taxes
The Executor or Administrator should consult with his or her attorney to determine whether the estate is a taxable estate. Tax returns, including individual and fiduciary returns, may be required for both the decedent and the estate. Form 706 is an estate tax return, and if necessary, must be filed within 9 months of the decedent’s date of death, unless extended. In addition to the decedent’s final personal income tax return, the estate may also have to file an income tax return for the estate, or a Form 1041.
Final Accounting
A Final Accounting is required before the dependent administration may be closed. In addition to providing the same information as an Annual Accounting, the Final Accounting lists the property that each heir or devisee has received, and once filed, the devisees have an opportunity to object if necessary. Once the Final Accounting is filed and approved, the personal representative may file an Application to Close, Discharge, and Release Bond, which essentially ends the personal representative’s duties to the estate. This Application should detail how the estate has been administered and distributed. When the judge signs the Order to Close, Discharge, and Release Bond, the court recognizes that the Dependent Administrator has completed his or her duties, discharges the Dependent Administrator, and releases the bond.
An Introduction to Heirship
Heirship proceedings enable the court to declare the heirs of a decedent who dies without leaving a Will or dies leaving aWill which fails to dispose of all of his property. The heir-ship also allocates the share of community property, separate real property, and separate personal property to which each heir is entitled. Though an heirship can be a stand-alone proceeding to pass title, it is most often accompanied by an ad-ministration of the estate.
Application to Determine Heirship The first step in an heirship is to file an Application for Determination of Heirship. Those who may begin heirship proceedings must be an interested person and include: - The personal representative of the decedent’s estate; - A person claiming to be a creditor or the owner of a portion of the decedent’s estate; - A person representing a person claiming ownership of portion of the decedent’s estate as guardian or next friend; - The guardian of an estate for a decedent who was a ward, so long as the proceeding is commenced and maintained in the probate court in which the proceedings for the guardianship of the estate were pending at the time of the decedent’s death; - A party seeking the appointment of an independent administrator; or - The Trustee of a trust holding assets for the benefit of a decedent.
An Application to Determine Heirship must include the dece-dent’s name, along with the date and place of decedent’s death. In addition, the Application must state the names and addresses of all heirs, as well as each heir’s relationship to the decedent and their interest in the estate. The Application must also delineate whether the decedent died testate, and if so, the disposition of the estate. Finally, the Application will
include a general description of all property belonging to the estate or held in a trust, if applicable. Included with the Ap-plication must be a verification, signed by the applicant and notarized, stating that all information in the Application is true and correct and nothing has been omitted.
Attorney Ad Litem
With the Application for Determination of Heirship, the applicant should file a Motion for the Appointment of Attorney Ad Litem. The court requires this Motion to appoint an attorney to represent the interests of any heirs whose names and/or locations may be unknown. The court may also utilize such attorney to represent the interests of any incapacitated heirs of an estate.
Service of Citation and Publication After filing the Application, all known heirs must be served with citation through the clerk’s office by certified mail. Each heir must be served individually if they are 12 years of age or older. If an heir is younger than 12 years of age, the applicant may serve a parent or guardian of the child. If any heirs choose to waive service of citation, they may do so by filing a waiver with the clerk’s office and service will not be required.
Service by publication is required by law in an heirship so that any unknown heirs may be made aware of the proceedings. The applicant will publish a notice in a local newspaper or other publication in the county in which the proceedings are being held, and also the county in which the decedent last resided, if different.
Affidavit of Service and Citation After each heir has been served or has filed a Waiver of Service of Citation, the applicant will file an Affidavit of Service of Citation with the clerk. Such Affidavit will state that the citation was served, the name of each person who was served, and the name of each person who has waived service.
Introduction to Dependent Administrations The Affidavit will also include copies of all citations that were served and proof of delivery of service. This Affidavit is very important because the court cannot enter a JudgmentDeclaring Heirship until the Affidavit is filed.
The Attorney Ad Litem
The court shall appoint an Attorney Ad Litem in a proceeding to declare heirship to represent the interests of heirs whose names or locations are unknown. The court may expand the appointment of the Attorney Ad Litem to include representation of an incapacitated heir on a finding that the appointment is necessary to protect the interests of the heir. Proceedings to declare heirships most commonly result when a decedent dies intestate, but heirships may be also be used when a will fails to dispose of all property of the decedent or when a Trustee of a trust must determine the heirs of a deceased beneficiary.Though the attorney ad litem in an heirship represents un-known heirs and seemingly reports only to the court and his own conscience, he must represent such clients with tenacity and good judgment.
The Hearing
After the above-listed documents have been accepted by the court, a hearing will be set for the court to determine heirship. For expediency, the court will often combine the heirship hearing with the hearing on the administration of the estate.
For the hearing, the Attorney Ad Litem will contact at least two disinterested witnesses, whose contact information your attorney provides to the Attorney Ad Litem. The witnesses must have personal knowledge of the heirs and family history of the decedent. The applicant’s attorney and the AttorneyAd Litem will question the witnesses at the hearing. After the testimony is complete, and provided the judge has the evidence to support a determination of heirship, the judge will enter a Judgment Declaring Heirship and discharge the Attorney Ad Litem. The applicant should be prepared to pay the Attorney Ad Litem his fees on the date of the hearing. Typical fees range between $500 and $1000.
Intestate Distribution in Texas— Special Rules Intestate distribution plans are set out graphically in pages 12 and 13 herein. Set out below are special rules to keep in mind when determining the distribution plan of an intestate dece-dent.
Distribution When Child Predeceases Parent In Texas, if some of the children predecease the intestate decedent and at least one child survives the intestate decedent, then each descendant of a child who predeceases the intestate decedent is entitled to a distribution of the intestate decedent’s estate. Each such descendant shares in only that portion of the property to which the parent through whom the descend-ant inherits would be entitled if that parent had survived the decedent. If all of an intestate decedent’s children predecease him, then the grandchildren of such decedent take equal shares.
Who is a Child under Texas Law? In Texas, for purposes of inheritance, a child is the child of a biological father if: 1) the child is born under circumstances which create a presumption of paternity; 2) the child is adjudicated to be the child of the father by court decree; 3) the child was adopted by the child's father; or 4) the father executed an acknowledgment of paternity. A child described above may inherit from and through his or her paternal kindred. Even if a child does not meet the criteria described above, he or she may petition the probate court for a determination of inheritance rights from a decedent.
In addition, Texas has long recognized the doctrine of adoption by estoppel. Modern Texas courts have held that a child’s knowing reliance on an agreement to adopt is unnecessary as the child’s belief in his or her status as a “child” is enough to support a claim of adoption by estoppel. A person claiming to be a child under the doctrine of adoption by estoppel inherits only from the decedent purporting to be the child’s parent and not through the parent.
A fiduciary is a person or institution which has a confidential, legal, or ethical relationship with a person or a group. As a result of such relationship, the fiduciary must act in the best interests of the person or group to whom he owes a fiduciary duty. When a person or institution assumes the role of Executor, Administrator, or Trustee, they are entrusted with the care of money or property and owe a host of duties to the beneficiaries on whose behalf they serve.
A fiduciary duty is an obligation to act in the best interests of another party. A fiduciary is held to high standards of loyalty, care, honesty, and full disclosure.
Duty of Loyalty It is the duty of the fiduciary to administer the estate solely in the best interests of the beneficiaries. The fiduciary must minimize or avoid conflicts of interest and hold the interests of the beneficiaries above his own.
Duty not to Delegate
The fiduciary is under an obligation to personally administer the estate and is under a duty not to delegate to others acts that the fiduciary should personally perform, like engaging attorneys and other professionals, opening a bank account, collecting assets, overseeing the management of investments, and approving or rejecting claims. Naturally, the fiduciary may delegate professional tasks such as the preparation of tax returns to a professional.
Duty to Keep and Render Accounts
A fiduciary is under a duty to the beneficiaries to keep full and accurate accounts; and a beneficiary has the right to demand accountings as set out in the Estates Code or under the decedent’s Will.
Duty to Furnish Information
A fiduciary is under a common law duty to the beneficiaries at reasonable times to give complete and accurate information regarding the estate.
Duty to Exercise Reasonable Care and Skill
A fiduciary is under a duty in administering an estate to exercise the same care and skill as a man of ordinary prudence would use in dealing with his own property.
Duty to Take and Retain Control of Estate Property
A fiduciary must use the same care and skill that a person of ordinary prudence would use to preserve estate property.
Duty to Enforce Claims
A fiduciary is under a duty to take reasonable actions to collect claims that are due to the estate.
Duty to Defend
The fiduciary is under a duty to do what is reasonable, under the circumstances, to defend actions by third parties against the estate.
Duty to Avoid Co-Mingling of Funds
The fiduciary has a duty to keep estate property separate from other property, and to properly designate it as estate property. Not only is it the fiduciary's duty to keep the estate property separate from the fiduciary's own property, but also to keep that property separate from other estates or trusts the fiduciary may administer.
Duty with Respect to Investments
Because a personal representative’s primary responsibility is to collect estate assets, pay creditors, and distribute the estate, the personal representative will not typically actively manage investments. The personal representative cannot ignore the investments, however, as he or she does have the duty to preserve estate property. If the assets of the estate require active management in order to preserve value, or when the estate administration will continue for a lengthy time, the personal representative should oversee the management required in a prudent manner.
Duty to Treat Beneficiaries Impartially
When there are multiple beneficiaries of an estate, it is the duty of the fiduciary to deal impartially among the beneficiaries. A fiduciary may face tax elections and other situations that will require careful attention to impartiality.
Duty with Respect to Co-Fiduciaries
Unless the Will provides otherwise, all fiduciaries are under a duty to participate in the estate administration. Therefore, a fiduciary cannot properly delegate the acts required of the fiduciary to co-fiduciaries. It is also the duty of a fiduciary to use reasonable care to prevent other fiduciaries from committing a breach of trust. Pursuant to Texas law, any Executor or Administrator can act alone to bind the estate, except that all Executors must execute any conveyance of real estate. Nonetheless, Co-Executors and Co-Administrators should act in concert whenever possible.
Duty to Treat Beneficiaries Impartially
When there are multiple beneficiaries of an estate, it is the duty of the fiduciary to deal impartially among the beneficiar-ies. A fiduciary may face tax elections and other situations that will require careful attention to impartiality.
Duty with Respect to Co-Fiduciaries Unless the Will provides otherwise, all fiduciaries are under aduty to participate in the estate administration. Therefore, afiduciary cannot properly delegate the acts required of thefiduciary to co-fiduciaries. It is also the duty of a fiduciary touse reasonable care to prevent other fiduciaries from commit-ting a breach of trust. Pursuant to Texas law, any Executor orAdministrator can act alone to bind the estate, except that allExecutors must execute any conveyance of real estate. None-theless, Co-Executors and Co-Administrators should act inconcert whenever possible.
In dependent administrations, Annual Accountings must be filed; and when the administration is to be closed, a Final Accounting must be filed with the court. In addition, in an independent administration, any person interested in an estate may demand an accounting from the personal representative after the expiration of 15 months from the issuance of Letters Testamentary or Letters of Independent Administration. Finally, once an estate has been fully administered, taxes have been paid, and the distributees of the estate are in receipt of estate assets, a personal representative serving independently may seek a judicial discharge via a declaratory judgment and pay from estate assets legal fees, expenses, and other costs incurred in relation to such declaratory judgment. Often, the court will require a full accounting of the estate to be filed before granting a judicial discharge.
When breach of trust arises, the beneficiaries may pursue measures to remedy the breach. Such remedies may include removal without notice, removal with notice, and requiring the fiduciary to be bonded. When a serious breach occurs and the interests of the beneficiaries are damaged, the successor fiduciary or the beneficiaries may seek to be made whole by suing on the fiduciary’s bond, if the fiduciary is bonded, or by seeking recovery from the fiduciary directly.
An Executor or Administrator may be removed by the probate court when:
• The Executor or Administrator cannot be served with notice because their whereabouts are unknown, they are eluding service, or they are a non-resident without a designated resident agent;
• It appears to the court that sufficient grounds exist to believe the Executor orAdministrator has or is about to misapply or embezzle all or part of estate property; or
• The Executor or Administrator:
◆ fails to qualify in the time required by law;
◆ fails to file an Inventory or Affidavit in Lieu of Inventory within 90 days of qualification, unless extended by court order;
◆ fails to file an Accounting if required by law;
◆ fails to file an Affidavit of Notice within 90 days of the Order Admitting Will toProbate stating that the required notice to the beneficiaries has been made;
◆ is proven guilty of gross misconduct or gross mismanagement in the performance of his duties;
◆ becomes incapacitated or is sentenced to a penitentiary; or
◆ becomes incapable of properly performing his duties due to a material conflict of interest.
Harris County Probate Courts 1-4
201 Caroline Street
6th and 7th Floors
Houston, Texas 77002
Probate Court No. 1
Honorable Jerry Simoneaux
Office: 832-927-1401
Fax: 832-927-1400
Probate Court No. 2
Honorable Pamela Medina
Office: 832-927-1402
Fax: 832-927-1432
Probate Court No. 3
Honorable Jason Cox
Office: 832-927-1403
Fax: 832-927-0010
Probate Court No. 4
Honorable James Horwitz
Office: 832-927-1404
Fax: 832-927-1499
Harris County Probate Court No. 5 1115 Congress, Suite 558
Houston, Texas 77002
Probate Court No. 5 Honorable Kathleen S. Stone
Office: 832-927-1405
Probate Department
P.O. Box 1525
Houston, Texas 77251-1525
(713) 274-8585
http://www.cclerk.hctx.net
Harris County Civil Courthouse
201 Caroline, 8th Fl./Probate Dept.
Houston, Texas 77002
205 W. 14th, Ste. 600
Austin, TX 78701
(512) 475-4368
Oversees the certification, registration, and licensing of guardians, court reporters, court reporter firms, pro-cess servers, and licensed court interpreters.
FLB300,Houston, TX 77002
Main: (713) 228-0735 Intake: (713)228-0732
Fax: (713) 228-5826
Email: info@hvlp.org
1500 McGowen, Suite 100
Houston, TX 77004
(713) 974-7691 (Voice)
(713) 974-7695 (Fax)
(866) 362-2851 (Video Phone)
Information on regional offices avail-able at
www.dfps.state.tx.us/
