Probate—the very word can strike fear in our hearts. When we hear the word “probate,” it conjures up images of lengthy delays, bitter disputes among family members, and airing your “dirty laundry” to the entire world. In reality, probate is not nearly so frightening. Having your questions regarding probate answered comprehensively can go a long way toward alleviating the associated fears. At Jackson, Landrith & Kulesz, PC, we understand how most people view probate. We believe that information is key to helping people get over their fears related to estate planning in general, and we have the experience, skills, and knowledge necessary to impart that information. Whatever your feelings, issues, problems, or questions related to estate planning happen to be, Jackson, Landrith & Kulesz, PC can help you engage in the process, with the least amount of emotional anxiety.
What is Probate?
When a person dies in the state of Texas, leaving behind property that has not been transferred to another person, that property will be distributed via a process known as probate. During probate, a Texas court will legally recognize the passing of the person, then will ensure the individual’s debts are properly paid, and his or her assets are distributed to beneficiaries. The court’s role in a probate process is basically to protect creditors’ interests, as well as the interests of the beneficiaries.
There are two ways the death of an individual could trigger probate: the decedent had no will, and the state will instigate probate proceedings, or the decedent did have a will, and the named executor or personal representative will begin the probate process. State and local court rules will govern the amount of time the executor is allowed to begin probate proceedings, although the general rule is that the executor has a maximum of four years from the date of the death of the individual to file for probate. If the executor fails to file for probate within that amount of time, the same laws that govern the issue if there is no will—the Texas laws of intestacy—will govern the probate and how the assets of the estate are distributed.
How Long Does Probate Take?
Probate can be a lengthy process when the estate is complex, however, for a simple estate, the entire probate process generally takes about six months. If the original will cannot be located or a person or persons contest the will, the process will take much longer. The time it takes to probate a will is one of the primary reasons it is a good idea to set up an estate plan which will distribute some assets outside of probate. These assets could include insurance policies, 401(k) plans, profit-sharing plans, pensions, KEOGHs, or IRAs.
Assets could also be titled in such a way that they would not have to go through probate. If the estate to be probated is worth more than $50,000, there are multiple beneficiaries, or certain beneficiaries are contesting the will, it is absolutely imperative that an experienced Texas probate lawyer is involved in the process. The legal issues associated with such a probate can be very daunting to most people; having solid legal advice can make the process go much more smoothly.
Independent vs. Dependent Probate
Independent administration procedures for probate fall under the “easier” type of probate. The court will appoint an administrator, and that person will submit an inventory of the decedent’s assets, along with any monies owed to the estate. Once the inventory is filed with the court, the administration of the estate will largely continue without court oversight. The vast majority of Texas estates are independently administered. Under Texas law, the person making the will may even include a special provision that allows independent administration of the will.
The second type of administration—dependent administration—includes the Texas court being much more involved in the entire probate procedure. An administrator will be appointed in a dependent procedure, however, every single step of the probate procedure must have court approval. Generally speaking, dependent administration occurs when there are issues surrounding the estate—usually beneficiaries squabbling over the distribution of assets. The goal of dependent administration is to ensure the rights of each beneficiary are properly protected.
Unfortunately, the cost of a dependent administration is significantly higher than for an independent administration. As you might imagine, when every single step requires approval by a Texas judge, the process is not only more expensive, it is a much lengthier process. Depending on the overall size of the estate, going through a dependent administration process can result in thousands of dollars going to administration costs rather than to the beneficiaries.
The Texas Probate Process
The probate process must always be started in the correct jurisdiction—that is, the probate court in the county in which the decedent lived. If probate is filed in the wrong probate court, it could be thrown out, even after all the steps have been followed. The steps for probate are as follows:
- An application for probate is filed;
- Approximately three to four weeks will elapse before the hearing;
- During the wait, the county clerk will post a notice stating the probate application was filed. If there are no contests received, the administration of the will can move forward;
- The will is validated (or, if there was no will, appoint an administrator);
- The Executor will file an inventory of assets and list of claims within 90 days after the hearing;
- An Affidavit in Lieu of Inventory may be filed by the executor with the County Clerk so that the estate’s asset information is not on public record;
- The beneficiaries will be identified;
- The creditors will be notified and given the opportunity to file a claim against the estate;
- If there are contests to the will, or other disputes, these must be resolved by a probate court judge, and
- The assets will be distributed.
If there are contests to the will, the person contesting the will must prove it is invalid, or there is something wrong with it. The will could have been forced due to influence by a third party, the will could have been forged, the will could have been improperly executed, or there may have been more than one executed will. Whatever the problem, the court will have to resolve it before the probate can be completed.
What About Taxes?
Texas has no inheritance tax, which means there are no death-related taxes owed to the state of Texas. There is, however, a 40 percent federal tax on estates valued over $11.4 million in 2019 and $11.58 million in 2020. This means that the vast majority of Texas estates are exempt from federal estate taxes, as well.
Texas does not have an inheritance tax nor a state income tax; therefore, beneficiaries have not state tax burden. This leaves federal income tax and federal estate tax. The executor must file tax returns on behalf of the decedent, which covers the period from Jan 1st, through the date of death of the year the person died. From the beneficiaries’ point of view, inheritance is generally not considered income, although the property inherited could have built-in income tax consequences. Tax issues related to probate can be complex, requiring the assistance of an experienced Texas probate attorney.
Texas Probate Help from Jackson, Landrith & Kulesz, PC
If your loved one has died and you are uncertain whether probate will be necessary—and if so, how to go about the process—having an experienced Jackson, Landrith & Kulesz, PC probate attorney by your side can make a significant difference in the process, as well as the outcome. It is important that the probate process is done properly, or there could be many delays. When you contact Jackson, Landrith & Kulesz, PC, you can have peace of mind, knowing the probate process will go as smoothly and quickly as possible. Contact a knowledgeable probate lawyer from Jackson, Landrith & Kulesz, PC today.