What Texas Residents Need to Know About Inheritance Law

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Welcome to the fastest and easiest way to find out about Inheritance Law in Texas.

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This site will provide you with tips and tools and checklists that you can use in Texas to transfer property at death as quickly and affordablbly as possible. 

Six Things to Keep In Mind About Texas Inheritance Law

Here are 6 things to keep in mind about probate and transferring property at death:

1. Much of your property never goes through probate or your will

You may not realize that, if your bank accounts or other accounts have a named beneficiary on file with the financial institution, that account will never pass through your will and will bypass the probate process. 

Many estates can avoid probate altogether, because assets will go to named beneficiaries because they are held as pay-on-death or  joint tenancy accounts, or in retirement accounts with a named beneficiary or life insurance, or the assets were held in a living trust, and whatever is left is small enough to fall under a state's small estates limit.

Property That Avoids Probate in Texas

If you are a beneficiary or a joint owner "with right of survivorship" (WROS), you can typically claim the asset by dealing with the financial institution directly, and provide them with a death certificate and proof of your identity as a beneficiary.

• Retirement Accounts: How to inherit an IRAs and other retirement accounts in Texas.
• Life Insurance: How to inherit life insurance.
• Joint Tenancy w/Right of Survivorship (JTWROS): How to inherit joint tenancy property.
• Pay on Death and Transfer-on-Death Financial Accounts (POD) & (TOD): How to inherit payable-on-death or transfer on accounts in Texas.
• Transfer-on-Death Deeds (TODDs): TODDs are a low cost alternative to a living trust as a simple way to transfer real estate at death without probate, the same way you would a financial account. Learn if transfer-on-death deeds are avaialble in Texas.
• Living Trusts: Property held by a living trust does not pass through probate, but only if property ownership was correctly transferred to the living trust once it was set up. 

2. Probate is governed by state law and is handled by the county court where the deceased person resided or owned property

• How Probate Works in Texas: Get an overview of how probate works, and whether your estate may be able to bypass the procedure entirely.

If you haven't done so already, make sure you enter the zip code or at least select the state and county of residence for the person who died, to learn about the probate law and probate court procedure for that state and county.

PROBATE COURT

Camden, TX Probate Court Finder: Get details about Polk County probate court. 

(You are currently looking at information for Camden, TX. Click here for information about Probate Court for Polk County.)

If the Deceased Owned Property In More Than One State

If the deceased person owned property in more than one state, "ancillary probate" proceedings may be required in those other states, depending on how the property was owned. These extra hurdles can be avoided by some simple planning ahead.

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3. Simplified Texas Probate Procedures May Be Available to Transfer Property Quickly

For property that did not have a beneficiary designation or was not in a living trust, there may be "simplified probate" procedures or "small estate affidavit" procedures in Texas for transferring certain kinds of property at death, which can avoid the cost and time of a full-blown court-supervised probate proceeding.

SHORTCUTS:

Small Estate Procedures in Texas: Many states allow simplified procedures for small estates and certain kinds of property which can be transferred by a simple affidavit procedure if the value of the estate falls under a certain limit.

Property Transfer Affidavits: Most states have quick procedures for transferring property valued less than a certain amount, if all the heirs agree.

In Texas you can use an Affidavit if the entire estate, not including homestead and exempt property, is worth $75,000 or less and there's no Will.  A probate judge must approve the Affidavit. Can be used to transfer homestead, but no other real estate. There is a 30-day waiting period.

Tex. Est. Code 205.001-008.

You can use a summary probate procedure if the value of the property doesn't exceed what's needed to pay family allowance and certain creditors.

Tex. Est. Code 354.001.

"Independent administration" is available, regardless of value of estate, it is requested in the Will or all inheritors agree to it.

Tex. Est. Code 401.001 and following.

Texas offers simpler procedures available for smaller estates. The two most common options are:

1. Small Estate Affidavit: This is a simplified probate process that can be used when the value of the deceased person's assets, excluding real estate, is $75,000 or less. The deceased person must have had a valid will, or if they did not have a will, they must have died intestate (without a will) and met certain other criteria. The person who is entitled to inherit the property can complete a small estate affidavit and present it to the holder of the property (such as a bank or other financial institution) to transfer the property to them. Texas Estates Code § 205.001-205.008.

2. Muniment of Title: This is a court order that can be used to transfer title of property when the deceased person had a valid will and there are no outstanding debts or liabilities other than those secured by liens on real property. This process does not involve the appointment of an executor, and can be used when the value of the estate, excluding real estate, is $75,000 or less. Texas Estates Code § 257.001-257.010.

It's important to note that these simplified procedures may not be appropriate or available in all cases, and the specific requirements and procedures may vary depending on the circumstances. It's always a good idea to consult with an experienced probate attorney to determine the best course of action.

Sources:

• Texas Estates Code: https://statutes.capitol.texas.gov/SOTWDocs/ES/htm/ES.205.htm
• Texas Estates Code: https://statutes.capitol.texas.gov/SOTWDocs/ES/htm/ES.257.htm

 

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4. Even if there's no will, someone needs to start the probate process when someone dies

Regardless of the size of the estate, someone needs to start the probate process within a certain period after someone dies. If you were named the executor in the will, you are that person.

If there is no will, or no executor was named in the will, the court will appoint someone to be responsible for filing the necessary documents to complete the process of paying debts and taxes and funeral expenses from the estate and distributing property to beneficiaries.

If you are a beneficiary of a small estate, you may be able to claim your inheritance with a simple affidavit. (If there is no will,  beneficiaries are determined by the "intestate succession" laws in the state where the person is a resident.) 

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Wills & Intestacy

• Wills: What are they? Do I need one? What if someone dies without one?
  • Naming an executor.
  • Appointing guardians and property managers for minor children
  • Specifying how debts should be paid
• No Will? Who Inherits if a Spouse or Parent Dies Without a Will in Texas

5. Death & Taxes: Most estates do not need to file an estate tax return, but there are other kinds of year-end taxes to be paid when someone dies

Unless an estate is worth more than $13,610,000, it will not need to file a Federal estate tax return.

• What taxes need to paid when someone dies?
• Texas Estate Tax: Whether or not Texas has an inheritance or estate tax
• Tax ID Number: How to get a federal tax identification number for an estate or trust
• Which Taxes Need Filing? What taxes need to be filed after someone has died
• Capital Gains: One way the rich get richer is the so-called "stepped-up basis" on inherited property. Learn how capital gains are calculated on inherited property.

6. Creditors and taxes must be paid before you can inherit assets

• The estate always must pay taxes before any other creditors can get paid. 
• Debts that are secured by property, like mortages, are called secured debts, because if someone doesn't pay the loan, the lender can take the property. If you inherit a house, you also inherit the mortgage.
• Unsecured debts, like credit cards, don't work that way -- as a beneficiary you are not responsible for that debt,
• But the estate needs to pay all known creditors before distributing property to beneficiaries and heirs. Otherwise, a creditor can come calling to get paid back from estate assets, even after they've been distributed.
• Most states have some sort of protection from creditors in the form of a “family allowance” and/or a homestead exemption. 

 

Questions a Texas Probate Lawyer Might Ask, and Why

In Texas, probate is the court-supervised process of administering a deceased person's estate. A probate lawyer can be instrumental in navigating this process, and one of their first steps will be asking you a series of questions. Understanding the purpose behind these questions can help you gather the necessary information and ensure a smooth probate process.

1. Do you have a copy of the deceased's will?

Relevance: A will is a legal document outlining how the deceased wishes their assets to be distributed after death. Texas follows the Texas Estates Code, specifically Chapter 251, which outlines the legal requirements for a valid will. Having a will streamlines the probate process and ensures your loved one's wishes are followed. In the absence of a will, the state distributes assets according to intestacy laws (Texas Estates Code §201.101 et seq.).

2. Did the deceased live in Texas at the time of death?

Relevance: Probate jurisdiction is determined by the deceased's residency at the time of death. Texas Estates Code Chapter 32 establishes that a decedent's domicile (permanent residence) determines the appropriate county court for probate proceedings.

3. What type of assets did the deceased own?

Relevance: The nature and value of the estate determine the type of probate process needed. Texas Estates Code §§401 and following outline different probate options depending on the estate's size and complexity. For example, smaller estates with minimal assets may qualify for a simplified probate process.

4. Do you have an estimate of the total value of the estate?

Relevance: The estate's value helps your lawyer determine the appropriate probate procedure and potential costs. Texas Estates Code §202.003 establishes a threshold for filing a small estate affidavit, a simplified probate option for estates under a certain value.

5. Are there any outstanding debts owed by the estate?

Relevance: Creditors have claims against the estate before beneficiaries receive any inheritance. Texas Estates Code Chapter 205 outlines the process for paying estate debts. Your lawyer will need to identify and prioritize these debts to ensure proper settlement.

6. Who are the beneficiaries named in the will, if any?

Relevance: The will identifies the individuals or entities who will inherit the estate's assets. Texas Estates Code §201.003 defines who can be a beneficiary in a will. If there is no will, Texas intestacy laws dictate who inherits (Texas Estates Code §201.101).

7. Is there an executor named in the will?

Relevance: The executor is the person responsible for managing the probate process, including gathering assets, paying debts, and distributing inheritances. Texas Estates Code Chapter 206 outlines the appointment process for executors. If the will is contested, the court may appoint someone else.

8. Are there any potential disputes among beneficiaries?

Relevance: Disputes among beneficiaries can complicate probate. Texas Estates Code Chapter 256 addresses will contests and other probate litigation issues. Your lawyer can advise on resolving these disputes or represent you in court if necessary.

Additional Considerations:

• Life Insurance: Life insurance proceeds generally bypass probate, going directly to the named beneficiary (Texas Insurance Code §1143.051).
• Joint Ownership: Assets owned jointly with right of survivorship typically transfer automatically to the surviving owner, avoiding probate (Texas Estates Code §131.101).
• Minor Children: If minor children inherit assets, a guardianship may be required to manage those assets on their behalf (Texas Estates Code Chapter 245).

By understanding the purpose of these key questions, you can be well-prepared to navigate the Texas probate process with your lawyer's guidance. Remember, this article provides a general overview, and you should always consult with a qualified Texas probate attorney for specific legal advice regarding your situation. 

General Considerations