This article provided you with a checklist of provisions to be included in every Texas Will. Included in the checklist was the recommendation you designate your executor serve independent of court supervision. This designation is so critical under Texas Law that I decided to devote this months installment to a discussion of the difference between independent and dependent administration of an estate.
The administration of an estate is the process of marshalling (i.e. gathering) all of the assets owned by a decedent, settling the claims of creditors of the decedent (i.e. paying debts and expenses), and distributing the property of a decedent to his or her heirs and beneficiaries. Under an independent administration the estate representative carries out these responsibilities without court supervision or involvement. Under a dependent administration the judge of the court where the estate is pending is charged by law with the duty of making sure the estate representative carries out these responsibilities in compliance with orders of the court.
In Texas an independent administration is the preferred form of administering an estate and a dependent or court supervised administration
is something to be avoided. There are only two situations that come to mind where a dependent administration may be advantageous:
- where an estate is insolvent or potentially insolvent; or
- where significant conflicts exist between the named estate representative and beneficiaries of the estate.
An independent administration typically involves only one brief appearance before the court. The estate representative then goes about the business of collecting assets, preparing an inventory of property for the court, evaluating and paying claims of creditors, and distributing property of the estate. The court assumes the estate representative is performing his or his statutory duties and does not supervise the actions of the estate representative. No formal accountings are required to be filed with the court unless requested by beneficiaries of the estate.
With a dependent or court supervised administration the court is actively involved in virtually every aspect of the estate. The estate representative cannot pay debts, sell assets or distribute property without first requesting permission and having the court enter an order authorizing the requested action. Formal accountings reporting all activity of the estate are required by law to be filed with the court. Dependent administrations are more complex proceedings. This translates to increased attorney fees, increased expenses in the form of filing fees and bond premiums, and a more lengthy process in completing the business of the estate.
Other than the two situations referenced above, there is no reason to subject your estate to a process, which is going to take longer to complete and cost more money. Most dependent or court supervised administrations result when a person dies without a will. However, in my practice I have frequently encountered wills that do not provide for an independent administration. Typically these wills have either been self-prepared, or they are foreign wills prepared in another state in which the testator once resided and then moved to Texas without executing a new will.
There are many phrases that can be utilized in a will to create an independent administration. To be on the safe-side make sure the language of your will includes at least one of the following phrases:
- I appoint (name of estate representative) to serve as independent executor of this will and my estate;
- I direct that no proceedings shall be had in any court with respect to the settlement of my estate other than the probating of this, my last will and testament, and the filing of an inventory, appraisement and list of claims of my estate as required by law; or
- I direct that my executor shall serve free of court supervision.
|Probate Attorney, Gregory G. Heffelfinger
The loss of a family member is a difficult enough situation. Compound that loss with the stress of having to deal with courts, banks, insurance companies, retirement plan administrators, and creditors and the situation may seem overwhelming. Some simple planning can greatly reduce the stress and make an overwhelming situation at least manageable during this difficult time. I often tell my clients that if they never have to see an attorney for any other reason, they should at least see an attorney to have a will prepared. In my opinion, with very few exceptions everyone needs a will.
While planning for death is something none of us like to think about, the consequences of procrastinating and having no will or estate plan may place an even greater emotional and financial burden on your family. Below, you will find some helpful information. The information presented is not intended to take the place of your attorneys counseling and recommendations, but rather is intended to provide you with some nuts and bolts information in a very readable format.
|About Gregory G. Heffelfinger
Gregory G. Heffelfinger is an attorney who has practiced law in Houston, Texas since 1983. He is a member of the of the State Bar of Texas, State Bar of Michigan, and licensed to practice before the United States District Court for the Southern District of Texas. Since 1983 Mr. Heffelfinger has provided legal counseling in wills, probate and estate planning to families utilizing the services of Earthman Funeral Directors.
Mr. Heffelfinger can be reached via email or call him at (713) 722-7163.