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When people hear talk of the probate process, they may cringe and have an idea that probating a will or going through an estate administration if someone dies intestate (without a will) should be avoided at any cost.\u00a0 Fortunately for those of us who live in Texas, the probate process is not nearly as onerous as it may be in other states.\u00a0 Thus, while there may be situations to seek out an alternative to the probate process, it is certainly not a goal that exists for every estate.\u00a0 Indeed, in many circumstances, going through the probate process or an estate administration may well be the cheapest and most efficient way to settle an estate.<\/p>\n
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Photo by Paul Schattenberg<\/em><\/p><\/div>\n That said, there are a number of alternatives to probate that may be available in certain situations.\u00a0 This blog post will highlight the most common probate alternatives for those involved in agriculture.\u00a0 For additional information, click here<\/a> for a podcast I recorded with Stephanie Bradley Fryer.\u00a0 For additional information on alternatives to probate, click here<\/a> for a podcast I recorded with James Decker.<\/p>\n Muniment of Title<\/strong><\/p>\n My friend and estate planning attorney, James Decker, refers to a muniment of title as “express lane probate.”\u00a0 It is not necessarily an alternative to probate, but a different–simpler–approach to the probate process.\u00a0 This option may be ideal in circumstances where a person owned limited property such as a house or one tract of land and where there is no debt other than that secured by a real estate note.\u00a0 Importantly, a valid will is required in order to utilize probate as a muniment of title.<\/p>\n The probate of a will as muniment of title is governed by the Texas Estates Code Chapter 257<\/a>.<\/p>\n Essentially, a muniment of title transfers title to property as directed by the decedent’s will without having an administration, meaning there are no Letters Testamentary issued by the court and no Executor appointed.\u00a0 In order to qualify for a probate as muniment of title, a court must determine that a valid will exists and should be admitted to probate, and either (1) the estate does not owe any unpaid debt, other than any debt secured by a real estate lien or<\/span> (2) there is another reason that there is no necessity for administration of the estate.\u00a0\u00a0See\u00a0<\/em>Texas Estates Code Section 257.001.<\/p>\n An application for the probate of a will as a muniment of title including a number of required details must be submitted to the probate court.\u00a0 See<\/em> Texas Estates Code Section 257.051.\u00a0 Once an Order admitting a will to probate as a muniment of title is granted, this is sufficient authority for persons to purchase, transfer, or otherwise transfer assets in accordance with the will.<\/p>\n Small Estate Affidavit<\/strong><\/p>\n When a person dies intestate with an estate value of less than $75,000 (excluding the homestead and exempt personal property), a small estate affidavit may be a valid alternative to probate.\u00a0 This can be a useful option for persons who die intestate with the majority of their estate consisting of their homestead and non-probate assets like transfer on death accounts or other accounts with designated beneficiaries.\u00a0 Importantly, the small estate affidavit is only an option if the homestead is the only real property owned by the decedent and the property is to be inherited only by the decedent’s spouse or minor children.\u00a0 These requirements make the situations in which the small estate affidavit can be used fairly limited.<\/p>\n The small estate affidavit will allow the person’s estate to be distributed without the appointment of a personal representative.\u00a0 Small estate affidavits are governed by Texas Estates Code Chapter 205<\/a>.<\/p>\n In order to qualify to utilize a small estate affidavit, the following requirements must be met: Importantly, note that the value of the estate is determined not on the date of death as is usually the case, but the date of the affidavit being executed.\u00a0 Additionally, the $75,000 asset limit does not include the person’s homestead, exempt property, or non-probate assets (such as retirement accounts or other accounts that will pass via contract to designated beneficiaries rather than by probate).\u00a0 For rural land, the homestead may be up to 200 acres per family or 100 acres per single person.\u00a0 See<\/em> Texas Property Code Section 41.002.<\/span>\u00a0 Personal property up to $50,000 per single person or $100,000 per family that will be used for the use and benefit of the decedent’s spouse, minor children, unmarried adult children, or incapacitated children is excluded from the estate value calculation.\u00a0 See <\/em>Texas Property Code Section 42.001.\u00a0 There are a number of types of property that may be included under the definition of personal property including home furnishings, farm or ranch vehicles and implements, tools and equipment used in a trade or profession, jewelry, two firearms, and specific numbers of various species of livestock.\u00a0 For more details, see\u00a0Texas Property Code Section 42.002.\u00a0Lastly, keep in mind that non-probate assets are not counted toward the estate value, so were a person to have beneficiary designations or transfer on death accounts for all financial accounts, these would not be included when determining the value of the estate with regard to the $75,000 limit.<\/span><\/span><\/p>\n Do note one important limitation–the only real property that may be transferred pursuant to a small estate affidavit is the decedent’s homestead.\u00a0 See<\/em> Texas Estates Code Section 205.006.\u00a0 That transfer may only be made to the decedent’s spouse or minor children; if anyone else is receive an interest in the homestead, a small estate affidavit is not a viable option.\u00a0\u00a0See<\/em> Texas Estates Code Section 353.051.<\/p>\n Affidavit of Heirship<\/strong><\/p>\n An affidavit of heirship may be an option in both situations where the person died with a will or died without a will (“intestate”).\u00a0 The affidavit of heirship is essentially the sworn statement of someone with knowledge regarding the surviving relatives of and property owned by the decedent.\u00a0 This is not an option where there may be unknown heirs.\u00a0 It may be useful in situations where real property is the only asset.\u00a0 These affidavits will likely not be options for estates with bank accounts or other financial assets as financial institutions are unlikely to recognize the affidavit of heirship since it is not executed by the probate court.<\/p>\n Affidavits of heirship are not based on statutory authority, but there is a statutory form for drafting an affidavit of heirship found in the Texas Estates Code Section 203.002<\/a>.\u00a0 The form essentially identifies the person executing the affidavit, the deceased, the relationship between the two, and then sets forth the family members of the decedent including spouse, children, parents, siblings and any property owned by the decedent.\u00a0 The affidavit is filed with the County Clerk to be filed in the property records, rather than with the probate court.\u00a0 The affidavit may be executed by anyone with knowledge of the facts set forth in the affidavit, but depending on circumstances, there may be situations where a disinterested person to execute the affidavit may be necessary.\u00a0 For example, title companies often require that two disinterested persons execute the affidavit.<\/p>\n Deeds Transferring Property Outside of the Probate Process<\/strong><\/p>\n I also want to mention that there are deed options that would result in the transfer of property outside of the probate process.\u00a0 These include Transfer on Death Deeds, Life Estate Deeds, and Lady Bird Deeds (aka Enhanced Life Estate Deeds).\u00a0 Each of these deeds must be executed before the death of the owner and will result in automatic transfer without the need for probate once the death does occur.\u00a0 For more information on Transfer on Death Deeds, click here<\/a>.\u00a0 For more information on Lady Bird Deeds, click here<\/a>.\u00a0 For additional information on Transfer on Death Deeds and Lady Bird Deeds, click here<\/a> for a podcast episodes with Garrett Couts.<\/p>\n","protected":false},"excerpt":{"rendered":"
\n(1) 30 days have passed since the death;
\n(2) No petition for the appointment of personal representative has been filed or granted;
\n(3) The value of the estate assets, excluding the homestead and other exempt personal property, on the date of the affidavit do not exceed $75,000;
\n(4) The affidavit setting forth family members, estate assets, known liabilities, and distributees of the estate;
\n(5) The judge approves the affidavit; and
\n(6) The distributees (people receiving assets) comply with the statute.<\/p>\n