Probate and Alternative Attorneys in San Antonio

Tax and Probate Law in Texas

If the decedent had a Last Will and Testament, ideally, that Will contains provisions allowing the Executor to serve

A probate attorney will prepare and file an application for probate informing the court of the death, the nature of the Will, and of the fact that you are asking to become Executor. The application and the original Will are then filed with the County Clerk’s probate office, where a case number and a hearing date are assigned.

The law requires that notice be posted by the Sheriff or the Constable, informing the public of the pending probate and the date it will be heard by the court. Any interested party may examine the Will at the clerk’s office and may file appropriate responses (but Will contests are actually quite rare). The notice is posted so that the first hearing date possible is on the first Monday following the expiration of ten days after the date of filing.

When the day for the court hearing arrives, the attorney and the applicant (pending Executor) appear in court. Testimony is taken regarding the Will’s validity and the fact of the decedent’s death. The court determines whether it has jurisdiction, and whether venue is proper (i.e., is this the right court to be hearing the case, or should it be in a different county?).

The pending Executor must establish by the testimony the attorney will prepare that he/she is not disqualified from serving – which means that he/she is not a convicted felon, is not incapacitated, is a resident of the state of Texas and is not “unsuitable.” In the Bexar County probate courts, all that evidence is reduced to writing in the form of an affidavit which is signed in open court by the Executor swearing the information is true. In other counties (some with less hectic dockets) the Judge may take verbal testimony under oath regarding those issues.

When the Judge is satisfied that all requirements of law have been met, an Order is signed that admits the Will to probate and activates the Executor’s authority by appointing the applicant. If the Will waived bond as well as supervision of the Court, the Order will also dispense with bond and designate the process as

The law also requires that a notice be published in a local newspaper announcing the Executor’s appointment. The notice also tells the public that anyone with a claim against said estate must present it in a timely manner.

The Executor, with the attorney’s help, must then prepare and file (within 90 days) for the court’s approval an “inventory, appraisement and list of claims.” The purpose of the inventory is to allow creditors to see the extent of the estate’s assets, so they can decide whether bringing a claim is worthwhile. It also helps the heirs know what to expect, and is used by the IRS when an estate tax return is required.

Some people die without debt, and some owe money on credit cards, auto loans, mortgages, etc. Any secured debtor (like a mortgage company) must be given a written notice from the Executor. If there are unsecured creditors (like credit card issuers) the Executor has a choice of whether to notify them directly or to wait for them to submit a claim. When notice is sent to an unsecured creditor that creditor has 4 months to file an official claim or the debt is barred from collection.

Any claims that are submitted by creditors must be accepted or rejected by the Executor. A claim that is barred by the statute of limitations would be rejected. Any creditor whose claim is rejected by the Executor may file suit in the probate court to have the court rule on the validity of its claim. If the creditor wins, the claim must be classified and paid along with the other valid debts.

If there is clearly enough money in the estate to pay all the claims, they must be paid in full. If the estate does not have adequate funds to pay everyone in full, they are categorized into eight different classes. Class 1 claims are paid first, class 2 next, etc. When several creditors all have the same class (like credit card issuers) they are each paid a proportion of the amounts owed from the estate’s available funds.

Assets that remain after debts and taxes are cleared will then be distributed to the devisees named in the Will. A new law effective in September 2007 requires that all heirs named in the Will receive prompt notice that the Will has been probated. An older law requires that any charities named in the Will also be notified of the probate.

Hopefully the Executor can distribute assets promptly, but sometimes the process of paying claims and clearing taxes can take months. When estate taxes are an issue, the tax return is not even due for nine months and the accountant or attorney may not settle the tax issues for several additional months. However, in most non-taxable estates the heirs receive their inheritances promptly and the Executor’s job is done.

PROBATE ALTERNATIVES

In addition to the traditional probate process, our firm has used other tools such as a Family Settlement Agreement, Small Estate Affidavit, and Affidavit of Heirship to distribute or transfer assets of the deceased without going to court. Whether one or more of these options is suitable requires consultation regarding the size and nature of the estate and, sometimes, the types of assets involved. In general, smaller estates are more likely to qualify for alternative distribution methods. Also, an estate that owes more in debt than assets (an estate that is “upside down”) typically is not a good candidate for alternative resolutions.