Estate administration is the legal process that is required before the assets in the estate of decedent can be legally transferred to others. To initiate the process, a petition must be filed in the probate court in the county that has jurisdiction over the matter. Typically that would be the county where the decedent was a resident. For example, if the decedent was a resident of Tarrant County at the time of their death, the probate case would need to be filed at the probate court in Fort Worth. Both the Texas Estates Code (Tex. Est. Code § 21 et seq. ) and the local probate court rules must be understood and adhered to throughout the process.
The probate process in Texas can be complicated, requiring strict adherence to Texas probate law as well as the rules of the court. There are two name goals for the process: paying the decedent’s debt and transferring title of the decedent’s property to beneficiaries as directed in the decedent’s will, if any, or as directed by Texas law. At the end of the administration process the estate can be closed.
While the probate court oversees estate administration, the executor or administrator is responsible for managing the process. “Executor” is the term used when the decedent left a will. “Administrator” is the term that is generally used when there is not will. Both an executor and an administrator are personal representatives. To serve as personal representative, the person must file a petition with the probate court. If approved, the court will issue the petitioner “letters.”
Those who are eligible to apply to receive letters include the person named as executor in the decedent’s will, an independent administrator designated by all of the beneficiaries, or an interested person. Tex. Est. Code § 301.051. A personal representative will not have the authority to perform their duties and act on behalf of the estate until their petition for letters has been approved by the probate court.
Responsibilities of the Personal Representative
While the probate court has jurisdiction over probate matters and oversees the estate administration process, the personal representative is responsible for the day-to-day administration tasks required to settle the decedent’s estate. These activities include the following:
Notifying creditors. In addition to transferring the decedent’s assets to others, the other primary goal of estate administration is to ensure that the decedent’s debts are paid. Within a month after appointment, the personal representative must notify creditors by publishing a notice and within one month after appointment, the personal representative must mail a notice to known creditors. Tex. Est. Code § 308.051.
Inventorying and appraising probate assets. One of the first jobs of the personal representative is to collect and to take control over estate assets. The personal representative has 90 days to prepare an inventory of estate assets and file it with the court. The inventory must include all estate real property located in Texas and all estate personal property regardless of where it is located. The inventory must also indicate which property, if any, is community property. In addition, the inventory must include the fair market value of each asset as of the date of the decedent’s death. Tex. Est. Code § 309.051. A list of claims must be included with the inventory of assets.
Pay estate debts, expenses, and taxes. The next step is the payment of debts. Within 30 days of receiving a claim, the personal representative must accept or reject it. The personal representative is required to pay valid debt as long as there is enough money in the estate to do so.
Distributing estate assets. It might be surprising that asset distribution comes at the end of the process. Because paying estate debt is a priority of the administration process, assets cannot be distributed until all other estate obligations have been met such as payment of creditors and expenses and the court has given approval.
If there is a will, it guides how the assets are to be distributed. If not, Texas law of intestate succession guides asset distribution. Tex. Est. Code § 201.001 et seq.
Another part of the estate administration process is managing disputes that develop along the way. Parties to probate disputes can be beneficiaries, heirs, claimants, guardians, trustees, and personal representatives. While many disputes are settled out-of-court through negotiation, some disputes must be settled through litigation before the probate court judge. Probate disputes often involve:
- Will disputes. Disagreements over whether the will is valid or disagreements over how to interpret terms of the will.
- Guardianship disputes. Disagreements over who should serve as guardian to minor children or actions of the guardian.
- Contested heirship. Right to inherit may need to be determined by the court.
- Fiduciary removal. Alleged breach of fiduciary duty may result in demands for removal.
Generally, probate disputes must be resolved before asset distribution. Thus, they can delay the process.