Estate Administration Flashcards
Independent Administration
A will may name independent executor, and provide that no action shall be held in the courts other than probate of the will, and filing an inventory and lost of claims of the estate.
- Most TX estates administered without court supervision or involvement (like trusts)
- Authorized when provided for in the will or if all distributees agree (but if independent executor is named in the will, court cannot veto)
Independent Executor
Can do, without court order, anything a dependent administrator under court supervision could authorize to do with court order.
Independent Executor’s Duties
Within 90 days inventory must be filed, an independent executor can file an affidavit in lieu of an inventory stating all debts have been paid to preserve privacy.
Ind executor must prep full inv an give a copy to the beneficiaries
Accounting upon demand within 15 months after probate on demand and 12 months after last accounting was rendered (contrast with will 12 months)
Interested party can petition for distribution of estate 2 years after independent executor is appointed
Removal of Independent Executor
May be removed by court ex parte without notice and hearing if cannot be served w/process or sufficient grounds to believe has misapplied or embezzled estate funds
Independent executor may be removed after notice and hearing if fails to qualify by posting a bond, file inv w/in 90 days, make an accounting on demand, fails to give notice to beneficiaries w/in 60 days or affidavit thereon w/in 90 days, guilty of gross misconduct or mismgmt, becomes incompetent, material conflict of interest.
Personal Representation
(executor if named in will or administrator if court appointed), within 120 days after appointment must:
• Post fiduciary bond within 20 days
• Public notice of administration in newspaper within 1 month
• File inventory within 90 days
• Give notice to named beneficiaries within 60 days after appointment of personal rep
• Must file certificate that notice to beneficiaries was given within 90 days.
Small Estate Administration
By affidavit if decedent died intestate and the value of the probate estate and the value of the probate estate is less than $75K. Affidavit serves same function as letters testamentary granted to an executor. Party w/affidavit can collect decedent’s assets by furnishing a copy of the affidavit.
Temporary Admin / Compensation
Can’t Exceed 180 days / 5% in, out rule
Notice Requirements (Same for Independent and Dependent Administrations)
Notice by publication (must be in county)
Permissive personal notice to unsecured creditors (personal rep may give personal notice by registered or certified mail creditors having claims for money stating that the creditor must present the claim w/in 120 days after receipt of notice; otherwise claims are barred)
Personal notice to secured creditors (within 2 months after being appointed, personal rep must give personal notice by registered or certified mail to secured creditors w/valid liens)
Dependent admin (a general creditor must file an authenticated claim supported by an affidavit w/probate court or administrator. Must then write a memo allowing or rejecting the claim w/in 30 days. If claim disallowed, creditor must file w/in 90 days after it is rejected. Else, claim is barred.)
Order of Priority for Liquidating Estate (consider homestead exemption and personal property set aside)
Claims against an estate are paid in following order of priority:
• Secured creditor w/preferred debt and lien—takes 100% of foreclosure sales proceeds
• Funeral expenses and expenses of last illness, up to $15K
• Federal income taxes
• Family Allowances
• Admin Expenses
• Secured claims, to extent covered by lien
• Child support arrearages
• State taxes
• Claims for repayment of med assistance paid by state
• Cost of confinement in TX prison
• All other claims, incl funeral/last sickness in excess of $15K.
But if estate insolvent: (i) residence may qualify for homestead exemption; (ii) furnishings, car, cattle, etc. up to $100K qualify for exempt personal property set aside. Special limit as to jewelry cannot exceed $25K (25% of $100K)
If estate is solvent, exempt property set-aside is only temporary. If insolvent, then permanent and the spouse gets to keep the property.
Homestead Exemption
Urban not to exceed 10 contiguous acres w/out regard to value of improvements. Must be as a residence and/or business.
Rural 200 acres (non-contiguous) without regard to value of improvments
Protections: Both spouses must join in conveyance or mortgage of homestead property. Free from creditors’ claims except for:
Purchase money mortgage lien/property taxes on the homestead itself/federal tax liens/mechanic’s liens for improvement on the homestead/equity loan (second mortgage) for up to 80% of the value of the equity.
Passes free from creditor’s claims if owner survived by spouse or minor child. Exemption attaches even though homestead passes to someone other than the spouse or child.
Probate Homestead
Probate homestead: right to occupy homestead rent-free (just pay property taxes) for life, or for so long as she occupies it as a homestead, in favor of surviving spouse or minor child (until age 18). Exclusive right of occupancy terminates if no longer homestead or turns 18.
Homestead Allowance and allowance in lieu of exempt personal property
Available to surviving spouse and minor children:
• $45K allowance in lieu of homestead or $30K allowance in lieu of exempt personal property
Family Allowance
Provide support for surviving spouse and minor children and incapacitated whom decedent had duty to support during period decedent’s assets are in probate administration.
• Permissible allowance—amount needed for support for 1 year
