TO WIL LOR

NOT TO WIL L

T E X A S Y O U N G L A W Y E R S A S S O C I A T I O NA N D T H E S T A T E B A R O F T E X A S

"To Will Or Not To Will" has been preparedto inform the public of what happens legally tothe property of a person when he or she dieswith a will or without a will. The Texas YoungLawyers Association seeks to make Texas resi-dents aware of how the law (the Texas ProbateCode) affects them and their families. Thishandbook is not a substitute for the advice of alawyer, but instead is designed to assistTexans in learning about their legal rights.

Revised and Updatedby

Texas Young Lawyers Association

© 1986, 1991, 1994, 1996, 1999, 2000, 2002, 2004, 2010Texas Young Lawyers Association

TO WIL LOR

NOT TO WIL L

Table Of Contents

YOU CAN'T TAKE IT WITH YOU ..................................1

DYING INTESTATE(WITHOUT A WILL) .............................................2Distribution of Community Property .....................3Distribution of Separate Property ........................4

DISADVANTAGES OF DYINGWITHOUT A WILL................................................7Undesired Results ..............................................7Costs and Delays ...............................................9

CHILDREN AND INTESTACY .....................................10Adopted Children .............................................10Illegitimate Children ........................................10Stepchildren ....................................................11Children of the Half-Blood ................................12After-Born or After-AdoptedChildren.........................................................12

EXECUTING A WILL TO ACHIEVEDESIRED PROPERTYDISTRIBUTION .................................................12What A Will Can Do ..........................................12Requirements for Execution ..............................13Oral Will .........................................................14Handwritten (Holographic) Will .........................15Typewritten (Formal) Will .................................16Will Revisions ..................................................17Nonprobate Assets ...........................................18Tax Considerations ...........................................19

PROBATE OF WILLS ...............................................20

ESTATE ADMINISTRATION .......................................21Independent Administration ..............................22Muniment of Title ............................................23Small Estate Affidavit .......................................24Collection of Final Paycheck ..............................25Informal Family Settlements .............................25

DIRECTIVE TO PHYSICIANS ANDFAMILY OR SURROGATES(LIVING WILL) ................................................26

POWERS OF ATTORNEY ..........................................27

CONCLUSION........................................................29

You Can't Take ItWith You

Death affects people in many ways. Itnever is timely. Death confronts the familywith bereavement, with the need toreadjust emotionally and financially, andoften with an unknown future. Death isnot only a personal issue but a legal one aswell. A death certificate must be issued,and the estate of the deceased individual(the decedent) must pass to others.

An estate consists of the property, bothreal and personal, which the decedentowns at the time of death. Real propertyincludes land and improvements locatedon the land. Real property also includesoil, gas, and other mineral interests.Personal property is all property otherthan real property, including cash andbank accounts, clothing and personaleffects, household furnishings, motorvehicles, stocks and bonds, life insurancepolicies, and government, retirement, oremployee benefits.

Upon death, title to the decedent'sproperty passes immediately to the benefi-ciaries under the decedent's will or to theheirs-at-law if the decedent died without awill. However, there must be an actualtransfer of ownership of the property byproving the will in court or, if there is nowill, by having a court determine who arethe decedent's heirs. The purpose of courtinvolvement is to protect the rights of thefamily, those entitled to receive property,and the creditors of the decedent's estate.

Therefore, although title to propertypasses immediately at death, the assets ofthe estate are subject to the control of the

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executor or administrator of the estate forthe purpose of settling the debts of andclaims against the estate. After the pay-ment of debts and claims, the remainingassets are distributed to the decedent'sbeneficiaries or heirs-at-law. If the dece-dent died with a legally valid will, thenhis or her property is distributed accord-ing to his or her wishes as expressed in thewill. On the other hand, if the decedentdied without a will or if the will isdeclared invalid, the estate is distributedto the decedent's heirs as determinedunder Texas law. The decedent's heirs maynot be the persons to whom the decedentwished for his or her property to pass.

Dying Intestate(Without A Will)

In Texas, property is characterized asseparate or community. Separate propertyis that which is owned before marriage oracquired during marriage by gift or inheri-tance. Damages awarded during marriagefrom a personal injury lawsuit, exceptdamages representing the loss of earningcapacity, also are separate property.Community property is all property, otherthan separate property, which is acquiredby either spouse during marriage. Thus,there can be separate real property, sepa-rate personal property, community realproperty and community personal proper-ty. When a person dies without a will, thelaw determines who are the heirs, andassets are disposed of according towhether they are community or separateproperty.

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Distribution ofCommunity Property

Community property, whether real orpersonal, is distributed in this manner:

1. If the decedent is survived by a spouseand children (or descendants ofdeceased children):

• If all surviving children and descen-dants of the deceased spouse are alsochildren or descendants of the sur-viving spouse, all of the communityproperty passes to the survivingspouse.

• If any surviving child or descendantof the deceased spouse is not also achild or descendant of the survivingspouse, the deceased spouse's one-half of the community property pass-es to his or her children (and thedescendants of any deceased child),and the surviving spouse retains theone-half of the community propertyhe or she owned prior to the otherspouse's death. However, the surviv-ing spouse has the right under Texaslaw to use and occupy the homesteadduring his or her life and may havethe right to use or own certain itemsof personal property that are exemptfrom creditors' claims.

• Example 1: Husband (H) dies with-out a will. H is survived by Wife (W)and by his three children (A, B, andC). A, B, and C also are the childrenof W. In this case, all of the communi-ty property passes to W.

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• Example 2: Same as Example 1,except H is survived by a child (D)who is not also a child of W. Now,A,B,C, and D share equally in H'sone-half of the community property,and W simply keeps the one-half ofthe community property that sheowned prior to H's death. To illus-trate, let's apply this rule to a com-munity bank account with $1,000 init. The $1,000 is distributed as fol-lows:

W: $500 (Many people incorrectlythink that W gets the entire$1,000.)

A, B, C, and D: Each receives $125(1/4 of $500)

• Example 3: Same as Example 1,except W has a child (E) by a priormarriage. E is alive at H's death. All ofthe community property still passes toW. It does not matter that W has chil-dren who are not also H's children.

2. If the decedent is survived by a spousebut not by any children or descendants,all of the community property passes tothe surviving spouse.

3. If the decedent is not survived by aspouse, all property is separate propertybecause the community estate termi-nates at the death of the first spouse. Thefollowing section discusses the intestatedistribution of separate property.

Distribution ofSeparate Property

The distribution of separate property ofa person who dies without a will depends

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on whether it is real or personal property.Separate property is distributed in thismanner:1. If the decedent is survived by a spouse

and children (or descendants ofdeceased children), then subject to thesurviving spouse's rights with respectto the homestead and exempt personalproperty:

• Separate personal property passesone-third to the spouse and two-thirds to the children (and thedescendants of deceased children).

• Separate real property passes to thechildren (and the descendants ofdeceased children) subject to a lifeestate in one-third of the property infavor of the surviving spouse. Thismeans that the surviving spouse isentitled to use one-third of the realproperty during his or her lifetime,and upon his or her death, the chil-dren (or descendants) will have fulltitle to the separate real property ofthe decedent.

2. If the decedent is survived by a spousebut not by any children or descendants,then subject to the surviving spouse'srights with respect to the homesteadand exempt personal property:

• All separate personal property passesto the spouse.

• Separate real property passes one-half to the spouse and one-half to thedecedent's parents or collateral rela-tives, such as brothers and sisters ortheir descendants. If no parents,

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brothers, sisters, or their descendantssurvive, then all separate real proper-ty passes to the surviving spouse.

3. If only children or their descendantssurvive, all separate personal and realproperty passes to the children or theirdescendants.

4. If both parents survive, but not thespouse or children or children's descen-dants, all separate personal and realproperty passes one-half to each parent.

5. If only one parent and brothers or sis-ters survive, separate personal and realproperty passes one-half to the surviv-ing parent and the remaining one-half isdivided equally among the brothers andsisters or their descendants. However, ifno brothers or sisters or their descen-dants survive, then all separate proper-ty passes to the surviving parent.

6. If no spouse, children or children'sdescendants, or parents of the decedentsurvive, all separate property is dividedequally among the decedent's brothersand sisters or their descendants.

7. If none of the above relatives survive,then all separate property passes gener-ally to the decedent's grandparents. Ifno grandparents survive, the law pro-vides for distribution of separate prop-erty to more distant relatives.

In Texas, no matter how remotely relat-ed one is to a person who dies without awill, potentially he or she is an heir-at-law.Notice that the decedent's property passesto the State of Texas only if none of his orher heirs, including very remote heirs(such as uncles, aunts, or cousins), are liv-ing. Indeed, the State rarely benefits fromthe estate of an intestate decedent.

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Examine the rules above to see howyour community and separate propertywould be distributed if you died without awill. Would the persons you desire toreceive your property actually receive it?

Disadvantages Of DyingWithout A Will

If a person dies without a will, the lawdisposes of his or her property. The publicpolicy of statutes governing the intestatedistribution of property is to provide forthe orderly distribution of property atdeath. The law does not play favorites, sothe distribution is determined by howclosely the heir was related to the dece-dent, not by the nature or quality of anyrelationship between the heir and thedecedent. Dying without a will may trig-ger undesired results and unexpectedcosts and delays.

Undesired ResultsBecause one usually has an idea of how

he or she would like his or her property topass to others, undesired results can ariseif he or she dies without a will. Dyingwithout a will risks that the property willnot be inherited as the decedent wished.

For example, very often one spousemay prefer to leave everything to the sur-viving spouse who will provide for andtake care of the children, but this may nothappen if there is no will. If a person dieswithout a will survived by a spouse andchildren, including one or more childrenwho are not also children of the survivingspouse, the surviving spouse receives only

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his or her one-half share of the communityproperty, perhaps including the familyhome. Further, under these circumstances,the surviving spouse inherits only one-third of any separate personal propertyand only a life interest in one-third of anyseparate real property. If there is any ani-mosity between, for example, the surviv-ing spouse and the deceased spouse's chil-dren by a prior marriage (who are now co-owners of property), conflicts or disputesmay arise. Surely this is not what thedeceased spouse wanted.

Another example of unintended resultsof dying without a will relates to the treat-ment of lifetime gifts to heirs. Texas lawpresumes that a gift to an heir is not anadvancement of his or her inheritance.This may present a problem where a par-ent with two children makes a lifetime giftof a sizeable part (say, one-half) of theestate to one child (perhaps to help thechild start a business or purchase a home)with the understanding that the gift is anadvancement of his or her inheritance. Ifthat parent then dies without a will and isnot survived by a spouse, the remainingone-half of the estate is divided equallyamong the two children. The child whoreceived the lifetime gift in effect takesthree-fourths of the total estate, and theother receives only one-fourth instead ofone-half, unless an advancement of the onechild's inheritance can be proved in court.

If the most special people in a person'slife are not among those who would be hisor her heirs-at-law, they will not share inthe estate if he or she dies without a will.If an unmarried person dies without awill, friends and roommates will inheritnothing. Thus, a devoted friend, who per-

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haps cared for the decedent for years, willnot inherit property, no matter how unfairit might seem, unless the friend is provid-ed for in the decedent's will. Also, withouta will, property cannot pass to a charitableorganization, no matter how committedthe decedent was to its purpose.

In Texas, there is no forced heirship. Inother words, a parent is not required toleave property to his or her children.However, one cannot disinherit heirs if heor she dies without a will. Under the intes-tate distribution statutes, property maypass to undesired heirs instead of thosethe decedent would have chosen.

Costs and DelaysDying without a will can tie up assets

for an undetermined period of time. Acourt proceeding often is required todetermine who are the heirs, although incertain limited circumstances it may bepossible to clear title to the assets withoutan heirship proceeding. An administrator,who may be responsible to the court forsettling the estate, may have to beappointed. The administrator may berequired to post a bond to insure that theduties are performed properly. Theadministrator's duties include locating theheirs, inventorying the assets, classifyingand paying off debts of and claims againstthe estate, and distributing the property tothe heirs.

Transfer of ownership of some of theassets by legal documents, such as deedsand certificates of title, may be necessary. Ifthe estate cannot be settled amicably, thecourt will resolve the disputes. Because ofcongested dockets, court proceedings oftenare slow. Legal fees and court costs may

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begin to mount. Depending on how diffi-cult it is to divide the property and whetherthe heirs agree on the value assigned to it,court proceedings could be so lengthy andcostly that the estate is depleted. The bot-tom line is that dying without a will coststime and money and causes frustration forthe family of the decedent.

Children And Intestacy

Adopted ChildrenThe inheritance rights of adopted chil-

dren are protected when a parent dies with-out a will. Under the Texas Probate Code,an adopted child is treated the same as anatural born child. Therefore, the adoptedchild can inherit from his or her adoptedparents and vice versa. The adopted childcan also inherit from his or her natural par-ents, but the natural parents cannot inheritfrom the child if the child dies without awill. This is an important considerationtoday when often an adopted child seeksand discovers the identity of a natural par-ent and then establishes a relationship withthat parent. It should be noted that an adultwho is adopted may not inherit from his orher natural parents and vise versa.

Illegitimate ChildrenAn illegitimate child (one born out of

wedlock) can inherit from his or her naturalmother and vice versa when either dieswithout a will. By contrast, the illegitimatechild cannot inherit from the natural fatheror the father's family members who diewithout a will, except upon the occurrenceof one of certain specified events, including:

1. The father consents in writing to be

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named as the child's father on thechild's birth certificate.

2. Paternity is established in a paternitysuit brought generally before the child'stwentieth birthday.

3. The father legally adopts the child.4. The father voluntarily signs a written

notarized statement of paternityacknowledging that the child is his.

5. After the child's birth, the father marriesthe biological mother and either signs awritten acknowledgment of paternity,consents to be named and is named asthe child's father on the birth certificate,or is obligated under a written volun-tary promise or by court order to sup-port the child.

6. After the father's death, the probatecourt determines that the father was thechild's biological father.

This means that even if a father main-tains ties with his illegitimate child, thatchild will not inherit from him if he dieswithout a will, except under limited cir-cumstances such as those discussed above.

StepchildrenThe stepchild does not inherit from a

stepparent who dies without a will becausehe or she is not considered to be legallyrelated to that stepparent. This is unfortu-nate where the stepchild was raised by anatural parent and/or a stepparent. Astepchild can inherit from a stepparent whodies without a will only if the stepparentadopted the stepchild or if the stepchildproves in court the existence of a written ororal agreement to adopt which was not exe-cuted. This latter method often is usedwhen foster parents do not adopt a child

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even though they had an agreement withthe natural parent(s) that they would adopt.

Children of the Half-BloodHalf-blood children share the same nat-

ural mother or father, but not the sametwo natural parents. A half-blood childinherits only half as much as a wholeblood child. For example, if a decedent'sonly heirs are a half-blood brother or sisterand a whole blood brother or sister, thehalf-blood heir takes one-third of the estateand the whole blood heir takes two-thirds.However, if all of the heirs are half-blood-ed heirs, then each will take a whole share.

After-Born or After-Adopted ChildrenAfter-born or after-adopted children are

children who are born to or adopted by aperson after he or she executed a will inwhich such children were not providedfor or mentioned at all. After-born or after-adopted children in this situation inheritonly under limited circumstances, so it isbest to execute a new will or an amend-ment to the existing will to provide for theafter-born or after-adopted children.

Executing A WillTo Achieve Desired Property

Distribution

What A Will Can DoA testator is a person who leaves a will

in force at his or her death. A will is a legalinstrument which states how the testator'sproperty is to be distributed at death. Avalid will avoids many of the problems

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that may arise from dying without a willand allows a person to leave property tothe persons he or she desires. In additionto naming the recipients of the testator'sproperty, the will also designates the indi-vidual(s) who will manage the propertyand care for minor children. In largerestates, the will often contains provisionsthat minimize estate taxes.

A will can also set up a trust, a methodby which property is held by one party(the trustee) for the benefit of another (thebeneficiary). To establish a trust, the testa-tor transfers property, with the specificintent to create a trust, to the trustee whomanages and administers the property forthe benefit of named beneficiaries. A testa-mentary trust arises under a will andbecomes effective when the testator dies. Atrust is an effective way of managing prop-erty for the benefit of minor or incapaci-tated persons or persons who are inca-pable of managing their own financialaffairs. A trust also is useful to prevent aspendthrift child from immediately spend-ing his or her inheritance by preserving thefunds for the child's education or otherimportant needs. Further, a trust may beused to protect the child's inheritance fromthe claims of his or her creditors becauseproperty placed in a trust generally maynot be reached by a beneficiary's creditorsuntil it is distributed to the beneficiary.There also are many other legitimate rea-sons to create a trust in a will.

Requirements for ExecutionFor a will to accomplish any or all of

these results, it must have been properlysigned. Texas recognizes three kinds ofwills:

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1. oral;2. handwritten (holographic); and3. typewritten (formal).To execute any of these wills, the testa-

tor must meet the following requirements:

1. is at least 18 years of age, is or hasbeen lawfully married, or is servingin the armed forces;

2. be of sound mind at the time of exe-cution;

3. not be unduly or fraudulentlyinduced (forced or deceived) to makethe will; and

4. have testamentary intent (presentintent to bequeath property at death).

Additional requirements as notedbelow must be met for each type of will.

Oral WillAn oral will applies only to personal

property. Gifts of land and improvementson it cannot be made through an oral will,since transfers of title to real propertymust be in writing. Further, an oral will isvalid only if made by the decedent in hisor her last illness and at home, exceptwhere he or she is taken sick away fromhome and dies before returning home.

If the value of the personal property ismore than $30, there must be three ormore credible witnesses to the oral will. Inaddition, an oral will cannot be probated(proved in court) more than six monthsafter death, unless the testimony or sub-stance of it was reduced to writing withinsix days after making the will.

If these requirements of an oral will arenot met, the decedent's property passesaccording to the laws of intestacy. From

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the information above, you can see thatthe law greatly restricts the use of an oralwill. Therefore, such a will should not berelied upon for disposing of property.

Handwritten (Holographic) WillUnder the Texas Probate Code, a valid

handwritten will must be wholly in thehandwriting of the testator and signed byhim or her. It does not need to be witnessedand can be written on anything, includingstationery. Typewritten words may not beincorporated into the will. The wordingmust reflect a present intent to dispose ofproperty at death. The words, "This is mylast will and testament," generally are suffi-cient to show testamentary intent.

While executing a handwritten willsounds easy enough, problems can arisefrom its interpretation, especially whenwritten by a lay person. If the instrumentdoes not dispose of all of the decedent'sproperty, the undisposed property willpass according to the statutes regardingintestate distribution. If the handwrittenwill disposes of more property than thetestator owns, complications may arise.

Remember, a spouse has only one-halfof the community property to give to any-one because the other spouse owns theremaining half. If a will attempts to giveall the community property to one ormore persons, the surviving spouse isplaced in the awkward position of havingeither to accept whatever bequests aremade to him or her in the will or torenounce the entire will and instead claimhis or her one-half community share.

If the bequests in a handwritten will arenot written in clear language, then it maybe necessary for the court to construe the

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meaning of ambiguous terms. As a gener-al rule, the less clear the language and themore property and heirs involved, themore likely the will may be contested incourt. Contesting a will is usually a verylengthy and costly process and may resultin defeating the testator's intent.

Further, if the handwritten will does notcontain the proper language allowing theexecutor to serve without court supervi-sion and waiving bond, the executor maybe required to obtain court approval ofmany actions and to post an executor'sbond. This causes unnecessary delays andexpenses in administering the estate.

For these reasons, although a handwrit-ten will is better than an oral will, the bestapproach is to have an attorney prepare atypewritten (or formal) will.

Typewritten (Formal) WillA typewritten will sometimes is

referred to as a formal will. A well-draftedtypewritten will is more apt to carry outthe decedent's intent. Although a type-written will may be prepared by a lay per-son, an experienced attorney should draftthe will.

For a typewritten will to be valid, itmust meet these requirements:

1. be signed by the testator or anotherperson at his or her direction and inhis or her presence;

2. be attested by two credible witnessesabove the age of 14; and

3. be signed by the witnesses in thepresence of the testator.

A beneficiary under a typewritten will

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should not serve as a witness to the execu-tion of the will because this may precludethe beneficiary from receiving any proper-ty under the will.

Will RevisionsExecuting a will that stands up in court

is only one aspect of "getting your affairsin order." After execution, the originaldocument should be safeguarded so that itis not lost, destroyed, or mutilated, whichmight result in complications in probatecourt as to the proof of its contents.Further, a will should be updated whenthere are changes in the testator's heirs,property, or marital status. This can beaccomplished by executing a properamendment (a codicil) to modify the exist-ing will or by canceling (revoking) theexisting will and then executing a newone. It is not advisable to update a will bywriting or making changes on it becausesuch revisions may be totally ineffective.

Be aware that a will can also be can-celed to some extent if the testator isdivorced after making the will. In such acase, gifts to the ex-spouse in the will, aswell as appointments of the ex-spouse asexecutor or trustee, are void and will notbe recognized. Similarly, an ex-spousewho was designated during marriage as abeneficiary under the decedent's life insur-ance policies generally is not entitled tothe life insurance proceeds upon the dece-dent's death. A temporary order issued bya divorce court prohibiting a party to apending divorce case from changing his orher will until the divorce is final is unen-forceable.

The subsequent marriage of a single tes-tator will not cancel his or her will. If a

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person who signs a will before marriagewishes to give all or any portion of his orher property to the new spouse, he or sheshould sign a new will. Otherwise, theproperty will pass according to the provi-sions contained in the will that was signedbefore marriage, and the new spouse willreceive no portion of the deceasedspouse's property.

Nonprobate AssetsOnly property owned by the decedent

at death can be disposed of by a will. Awill cannot dispose of "nonprobate assets"-- assets which pass at death other than bywill or intestacy. The principal types ofnonprobate assets include property pass-ing by contract, property passing by sur-vivorship, and property held in trust.

Property passing by contract includeslife insurance proceeds, IRAs, andemployee benefit plan proceeds, such asthe proceeds payable under a pension,profit-sharing, or employee retirementplan. These assets pass outside the will tothe persons named by the decedent in theappropriate beneficiary designations.Thus, it is important to periodicallyreview the beneficiary designations withrespect to these type of assets and toupdate them as necessary.

Property held by the decedent andanother person as joint tenants with rightof survivorship or in a pay on deathaccount passes outside the will directly tothe survivor. Survivorship assets typicallyinclude certain types of bank accounts,certificates of deposit, stocks and bonds,and certain savings bonds issued by theUnited States Government, such as SeriesEE savings bonds.

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Another category of property that pass-es outside of probate is property held in atrust for the benefit of the decedent. Thetrust may have been created by the dece-dent during his or her lifetime for proper-ty management purposes or by someoneelse, such as a parent of the decedent.Trust assets pass under the terms of thetrust rather than under the terms of thedecedent's will.

It is important to determine the extentof one's nonprobate assets when planningthe disposition of one's property at death.If a substantial portion of the assets arenonprobate assets that do not pass underthe will, even a well-drafted will may beinsufficient to carry out the testator'sintent in disposing of his or her property.

Tax ConsiderationsDepending upon the value of the dece-

dent’s property, a will may be necessary toavoid, minimize, or defer federal estate andstate inheritance taxes. These taxes gener-ally are imposed if the value of the dece-dent’s property exceeds the limitationimposed by the law at the time of the dece-dent’s death, reduced by the amount of anylifetime taxable gifts. The limits imposed bylaw are: $2,000,000 from 2006 until 2009;and $3,500,000 in 2009. Current law statesthat the estate tax will be repealed in theyear 2010 but reinstated in the year 2011.The value of the property that can be trans-ferred tax free will be $1,000,000 at thattime. For these purposes, the decedent’sproperty includes his or her separate prop-erty and one-half of all community prop-erty. Life insurance and other nonprobateassets are considered in determining thevalue of the decedent’s property unless cer-

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tain steps were taken during life to preventsuch assets from being subject to estate taxat death (e.g., placing life insurance in atrust).

The highest federal estate tax rate was50% in 2002 and is scheduled to decline by1% each year until 2007 when it becomes45%. It is possible that the estate tax ratecould become 55% in 2011. Thus, withoutproper planning a significant portion of thedecedent's property may go toward thepayment of death taxes rather than to thedecedent's intended recipients. Estate plan-ning techniques are available to minimizedeath taxes and, in the case of a marriedindividual, to defer payment of any taxesuntil after the death of his or her spouse.The ability to take full advantage of suchtechniques is not possible without a will.

Probate Of Wills

Whether you have a handwritten ortypewritten will, its validity must beproved in court. This procedure is knownas probate, and it generally must takeplace within four years after death.

To probate a will, it must be establishedin court that the will meets the require-ments of execution (see earlier discussion)and that the will was not canceled orrevoked. Additionally, unless the will is"self-proved," proof of a handwritten willrequires the testimony of two witnesses tothe testator's handwriting and proof of atypewritten will requires the testimony ofone of the attesting witnesses.

A self-proved will is one that hasattached a specific form of affidavit con-taining certain required statements which

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is executed before a notary public at thetime the will is signed or anytime there-after but before the testator dies. A stan-dard notary acknowledgment alone isinsufficient to make the will "self-proved."A self-proved will is admitted to probateon the basis of the self-proving affidavitand there is no need to call witnesses.

A will that is not proved in court isdenied probate. In this event, the deceden-t's property passes to his or her heirs as ifhe or she died without a will. Again, thisfurther emphasizes how important it is toexecute a will which meets all legal require-ments so that property will pass as the tes-tator wishes. After proving the validity of awill, the next step in the probate process isthe administration of the estate.

Estate Administration

Estate administration is the manage-ment and settlement of an estate by a per-sonal representative approved by thecourt. Estate administration may not benecessary when the decedent's estate is sosmall that no action is necessary to distrib-ute the property to the beneficiaries orheirs. However, estate administration isrequired in most other circumstances.

Estate administration involves the fol-lowing steps:

1. collection of the decedent's assets;2. payment of debts and claims against

the estate;3. payment of estate taxes, if any;4. determination of heirs if the decedent

died without a will; and5. distribution of the remainder of the

estate to those entitled to it.

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If the will names an individual to carryout these duties, he or she is called anexecutor. If the court appoints such a per-son because the will does not name anexecutor or the decedent died without awill, that person is called an administrator.Either way, the executor or administratorhas to be approved by the court and haslegal obligations and duties to the courtand those who receive property from theestate. If the executor or administrator actsimproperly, he or she may be held liablefor any resulting damages and his or herappointment may be terminated by thecourt.

In Texas, there are several differentmethods of administering an estate, someof the more common of which are dis-cussed below.

Independent AdministrationTexas is one of the states that provides

for independent administration -- adminis-tration free of court supervision. Thismeans that after an independent executoror administrator is approved and an inven-tory of estate assets is filed with the court,the executor or administrator can simplytake care of the administration of the estatewithout any further court involvement orsupervision. The independent executor oradministrator is free to settle with credi-tors, set aside the homestead and otherexempt property, manage the property ofthe estate, sell assets for payment of debtsor taxes, and distribute the remainingestate to those entitled to it. Thus, indepen-dent administration avoids the costs anddelays associated with a court-supervisedestate administration in which the executoror administrator must seek court approvalbefore doing any of these acts.

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A testator can provide for independentadministration of his or her estate byinserting in the will a clause such as thefollowing:

"I appoint _______________________ asindependent executor of my estate toserve without bond, and I direct that noaction shall be had in the county court inrelation to the settlement of my estateother than the probating and recording ofthis will and the return of the statutoryinventory, appraisement, and list of claimsof my estate."

If the decedent did not provide forindependent administration in the will butall distributees under the will agree to it,independent administration may be creat-ed upon court approval. If the decedentdied without a will, independent adminis-tration may be created when all heirsagree. Although a court usually permitsindependent administration, it has thepower to deny the request. If the courtdenies independent administration, manyof the actions of the executor or adminis-trator will require court approval, result-ing in unnecessary costs and delays inadministering the estate.

Muniment of TitleIf there is no need for the appointment of

an executor or administrator and the onlyreason for probating a will is to clear title toproperty, a will can be admitted to probateas a muniment of title. Under this proce-dure, there is no executor or administratorappointed. It is a somewhat more simpli-fied method of administering an estatethan the traditional formal administration.It is generally used only when there are nodebts of the estate to be paid and no other

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actions that require the appointment of anexecutor or administrator.

Small Estate AffidavitWhen someone dies without a will, one

possible alternative is the Small EstateAffidavit.

If the value of the estate, excluding thehomestead, exempt personal property, andnonprobate assets, does not exceed$50,000, no formal administration is neces-sary if the heirs file an affidavit with thecourt showing that they are entitled toreceive the property of the estate. As men-tioned, the values of the homestead andexempt personal property are not includ-ed in the $50,000 figure. Up to 10 acres ofland with improvements qualifies as anurban homestead of a family or singleadult person regardless of its value. Up to200 acres with improvements for a familyor up to 100 acres with improvements fora single adult person qualifies as a ruralhomestead regardless of its value. Exemptpersonal property includes items of tangi-ble personal property valued at up to$60,000 per family or $30,000 per singleperson. The law specifies the extent towhich certain types of personal propertyare exempt. For example, there is no limitup to the maximum on household furnish-ings, tools, or clothing, but only twofirearms are exempt.

In sum, the small estate affidavit is notnecessarily limited to small estates, andmay be a useful alternative to a formaladministration in certain estates where,for example, the residence and nonprobateassets comprise the majority of the estateand the remaining assets are valued at lessthan $50,000.

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In addition to the $50,000 ceiling, thesmall estate affidavit procedure is avail-able only if the assets of the estate, exclud-ing the homestead and exempt personalproperty, exceed the known liabilities ofthe estate.

One limitation on the small estate affi-davit is its general ineffectiveness to trans-fer title to real property. The small estateaffidavit is effective to transfer title to ahomestead if the homestead is the onlyreal property in the estate. However, if theestate contains any real property otherthan just the homestead, the affidavit willnot clear title to any of the real property,including the homestead.

Collection of Final PaycheckThe Probate Code provides for a rela-

tively quick and inexpensive procedurefor a surviving spouse to collect the finalpaycheck of the deceased spouse by affi-davit of the surviving spouse when thereis no administration pending of thedeceased spouse's estate. This procedure isuseful where the only asset of the estate isa final paycheck.

Informal Family SettlementsInformal family settlements are permis-

sible where the estate is small and consistsonly of personal property, such as personaleffects and household furnishings, but gen-erally not where the estate includes bankaccounts, stocks, and bonds. If a motorvehicle is involved, a new certificate of titlemay be applied for by filing an affidavit ofheirship with the county tax assessor'soffice.

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Directive ToPhysicians And

Family or Surrogates(Living Will)

Texas law allows any competent adult,by signing a Directive to Physicians andFamily or Surrogates (or "living will," as itoften is called), to instruct his or herphysician to withhold or withdrawartificial life-sustaining procedures in theevent of a terminal or irreverisible condi-tion. The directive takes effect only afterthe patient's physician determines that thepatient is terminally ill and that death isexpected within six months without appli-cation of artificial life-sustaining proce-dures.

The form and contents of the directiveare prescribed by Texas law. The directiveshould be in writing, signed by thepatient, and witnessed by two competentadults. One of the witnesses cannot be theperson designated to make a treatmentdecision for the patient, related to thepatient by blood or marriage, the patient'sheirs, the attending physician or anemployee of the physician, a person whowould have a claim against the patient'sestate upon his or her death, or anemployee of the patient's health care facili-ty who is providing direct care to thepatient or who is involved in the financialaffairs of the facility. In lieu of signing inthe presence of witnesses, the patient maysign the directive and have the signitureacknowledged before a notary public.

The directive may include a designation

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of another person to make a treatment deci-sion for the patient if the patient is comatose,incompetent, or otherwise mentally orphysically incapable of communication.

If you desire that your life not be artifi-cially prolonged in the event of a terminalillness, you should consult with an attorneyto have a directive prepared for you. It mayalso be desirable to inform your physicianof your wishes and to provide him or herwith a copy of the directive. Failure to signa directive may result in disagreementsamong your family in carrying out yourwishes with respect to terminating artificiallife-sustaining procedures.

Powers Of Attorney

A power of attorney is an instrument bywhich one person (the principal) grants toanother (the agent) the power to performcertain acts on his or her behalf. Two typesof powers of attorney are common in theestate planning field, namely the medicalpower of attorney and the durable powerof attorney.

The medical power of attorney grantsthe agent the power to make health caredecisions for the principal if he or she isunable to make them. The agent may exer-cise his or her authority only if the princi-pal's attending physician certifies that, inthe physician's opinion, the principal lacksthe capacity to make health care decisions.The principal can revoke the power ofattorney at any time, orally or in writing,and regardless of the principal's mentalstate. The medical power of attorney maybe signed by two witnesses, one of whichis not:

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1. the person designated as agent;2. related to the principal by blood or

marriage;3. an employee of the principal’s health

care facility who is providing directcare to the principal or who is involvedin the financial affairs of the facility;

4. the principal’s attending physician oran employee of the physician;

5. the principal’s heirs; or6. a person who would have a claim

against the principal’s estate upon hisor her death.

In lieu of signing in the presence of thewitnesses, the principal may sign the med-ical power of attorney and have the signa-ture acknowledged before a notary public.

The second type of power of attorney isthe durable power of attorney. This instru-ment grants authority to a designatedagent to manage the principal's propertyon his or her behalf. It can be distinguishedfrom the medical power of attorney whichrelates to health care decisions rather thanto decisions concerning the management ofproperty. The principal can either grant theagent one or more specific powers or grantthe agent all of the powers listed in thepower of attorney form. In addition, theprincipal can elect to have the power ofattorney become effective immediatelyupon signing it or only upon the principal'sfuture disability or incapacity. The durablepower of attorney must be notarized, but itneed not be witnessed.

The forms of both the medical power ofattorney and the durable power of attorneyare prescribed by statute. You should con-sult an attorney if you desire to have eitherof these documents prepared for you.

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Conclusion

If you die without leaving a will, yourisk that your property will not be distrib-uted as you desire. Even when the heirs atlaw are the same as you would haveselected yourself, there is no advantage toletting the law take its own course. Theadvantage lies in dying with a will. With awell-drafted will you can avoid legal pit-falls, name an executor of your estate,name a guardian for your minor children,establish trusts, minimize estate tax lia-bility, and minimize probate-related costsby providing for independent administra-tion. Although a will can be challenged incourt, the grounds for contest in Texas arefew, and the law favors carrying out thedecedent's intent.

Executing a will is not as complicated oras expensive as you might think. You areencouraged to talk with an attorney aboutwills, trusts, and estate administration andto have a will prepared by the attorney. Ifyou decide not to use an attorney, at leastthis handbook should give you a generalidea of what will happen to your propertyif you die without a will.

If you desire that your life not be artifi-cially prolonged in the event of a terminalcondition, you should consider signing aliving will. You should consult with anattorney and your physician to under-stand the full impact of the living will.

Finally, you should consult with anattorney regarding the advantages of sign-ing a medical power of attorney and adurable power of attorney.

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Prepared as a Publ i c Serv i ce by the

Texas Young Lawyers Assoc ia t ion

and Dis t r ibuted by the State Bar of Texas

For Addi t iona l Cop ies P lease Contac t :

Pub l i c Informat ion Depar tment

State Bar of Texas

P.O. Box 12487

Aust in , Texas 78711-2487

(800) 204-2222, Ext . 1800

www.texasbar . com

For more informat ion

on wi l l s and advanced planning, p lease

contac t Texas Young Lawyers Assoc ia t ion at

(800) 204-2222, Ext . 1800

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