Estate Administration Flashcards
1
Q
Basics
A
- Will must be probated within 4 YEARS… unless applicant was not in default (i.e., just now discovered the will), in which case notice must be given to heirs and will can probated for muniment of title ONLY! Letters testamentary CANNOT be issued and NO estate administration can be held
- Jurisdiction: small counties have county courts; mid-sized counties have county courts at law with concurrent jurisdiction (shared with DC); big counties have statutory probate courts with exclusive jurisdiction
- Venue: county in which decedent was domiciled at time of death OR, for nonresident who dies n TX, either (i) county where he died or (ii) county where his principal assets are located at time of death
2
Q
Independent Administration
A
- Authorized under Estates Code when: (i) provided for in the will, or (ii) when all distributees agree (UNLESS probate court finds it is not in the estate’s best interest)
- Independent executor (named in the will) or administrator (appointed by the court) is responsible for (i) being qualified by the court; (ii) files with the court an inventory of estate assets, an appraisement of their value, and a list of claims of the estate); (iii) administers the estate, paying or disallowing creditor’s claims and distributing the net estate without ANY court involvement or supervision
- Powers include” power to sue or be sued, pay or deny claims, set aside family allowance and exempt property, operate a business (that’s a part of the estate) and make distribution of assets
- Power of Sale: if contained in will, real property can be sold irrespective of estate debts; if not, property may be sold only to pay debts and expenses and to satisfy family allowance or other statutory allowances
- Closing estate: (i) file closing report with verified affidavit (full accounting); (ii) file notice of closing with verified affidavit; or (iii) file for declaratory judgment (seeking judicial discharge)
3
Q
Remedies Against Bad Independent Executor
A
Court can remove if:
(1) fails to return inventory and list of claims within 90 days of qualification
(2) misapplied or embezzled estate property
(3) fails to make required accounting
(4) fails to give notice to charitable Bs within 90 days after admitted to probate
(5) guilty of gross misconduct or gross mismanagement
(6) becomes incapacity or sent to prison
(7) becomes incapable of performing because of material conflict of interest
* Interested can demand accounting after 15 MONTHS from administrator’s appointment and EVERY 12 MONTHS after; can demand distribution after 2 YEARS (like show cause)
4
Q
Written Settlement Agreements
A
- All interested persons (executor does NOT count and does NOT need to agree) sign agreement as to how property will be distributed
- All interested parties must be over 18YO
5
Q
Probate of Will as Muniment of Title
A
- Court must find there are no unpaid debts other than mortgage on the homestead (all creditors need to be paid off)
- Effect = establishes ownership rights of Bs named in will
- Can be used to register stock certificates in Bs’ names, collect decedent’s bank accounts, square away land title records, etc.
- Must file affidavit within 180 days after will is probated (certifying terms of will have been fulfilled or what remains to be carried out)
- Court can hear evidence if Bs cannot be ascertained solely by reference to the will and order declaratory judgment construing the will
6
Q
Statutory Heirship Proceeding
A
- ONLY for intestacy
- Fixes amount of heirs’ intestate shares (but heirs discovered later can sue these heirs!)
7
Q
Small Estate Administration by Affidavit
A
- ONLY if intestate estate does not exceed $50k (NOT including homestead or exempt personal property)
- If homestead is ONLY real property in decedent’s estate, title may be transferred (affidavit must be recorded)
- Value of estate (NOT including homestead or exempt personalty) does NOT exceed amount to which surviving spouse or minor children are entitled as a family allowance then no administration is needed
8
Q
Dependent Court-Supervised Administration
A
- 4 steps at every stage: petition, notice to interested parties, hearing and subsequent judicial confirmation
- Sale of real property: (1) file application showing need to sell; (2) hearing is set and notice given to interested persons; (3) hearing is held and court orders a sale, specifying public auction or private sale; (4) property is sold; (5) court affirms sale; (6) representatives gives deed to purchaser
9
Q
Creditors’ Claims
A
Notice requirements are the same for independent and dependent administration:
- Notice by publication: MUST publish in county newspaper within 30 days after appointment
- Permissive personal notice to unsecured creditors: MAY be given to general creditors stating they must present claim within 120 days after receipt, otherwise claim is BARRED
- Personal notice to secured creditors: MUST be given within 2 months after appointment
- DEPENDENT administration only = general creditor must file authenticated claim supported by an affidavit, and administrator must ALLOW or REJECT claim within 30 days (rejection presumed if no action taken) – if rejected, creditor must file suit within 90 days of rejection, otherwise the claim is BARRED
- SECURED creditors: to be paid out of general assets of estate, MUST (i) within 6 months from appointment of rep, or (ii) 4 months after receip tof personal notice (whichever is later) file claim as a MATURED SECURED CLAIM–if encumbered property is sold, creditor has Class 3 claim and Class 8 claim for deficiency judgment if need be–or (default) PREFERRED DEBT AND LIEN–debt is paid according to terms of the note, creditor waives right to collect debt from decedent’s personal estate and creditor must foreclose the mortgage or other lien to satisfy the debt (*preferred if decedent was insolvent because priority re: collateral is preserved as against ALL OTHER CLAIMS)
10
Q
Priority of Claims/Expenses
A
- Class 1: funeral expenses and expenses of last illness, up to $15k, then family allowance
- Class 2: expenses of administration
- Class 3: secured claims, to extent covered by lien (i.e. if creditor filed “matured secured claim”)
- Class 4: child support arrearages reduced to judgment
- Class 5: state taxes
- Class 6: claims for repayment of medicaid assistance paid by state
- Class 7: cost of confinement (TX prison)
- Class 8: ALL OTHER CLAIMS, including funeral, last sickness expenses in excess of $15k
11
Q
Homestead
A
- Urban: max 10 acres (MUST be contiguous; must be used as residence and/or business)
- Rural: max 200 acres (need not be contiguous) or 100 for single person
- Effects of Exemption:
(1) freedom from creditor’s claims during surviving lifetime (with some exceptions for back taxes and stuff)
(2) spouses must join in conveyance of the homestead (even if it’s one spouse’s separate property)
(3) passes at death free of creditors’ claims (even if it goes to other devisee and not surviving spouse or minor child)
(4) spouse is entitled to occupy as long as they chooses; minor child may occupy until age 18; cannot be partitioned until right of occupancy ends (Note: occupying spouse must pay taxes and mortgage interest, but not insurance premiums)
(5) exemption from real property ad valorem taxes - Allowance IN LIEU OF HOMESTEAD = up to $45k
12
Q
Exempt Personal Property Set-Aside and Family Allowance
A
Exempt Personal Property
- Exemption from creditors’ claim is limited to assets wroth $60k per family ($30k for singer person)
- Includes household furnishing, tools, retirement plans, etc.
- Allowance IN LIEU OF EXEMPT PERSONAL PROPERTY up to $30k
Family Allowance
- Surviving spouse, minor children and adult incapacitated children are entitled to $ for support and maintenance for 1 YEAR
- Surviving spouse’s separate property (but NOT CP, nonprobate assets or salary) IS taken into account
- Treated as community obligation and is payable out of CE
- Over and above testamentary gifts and the intestate share
