Whether you have a will or not, your property will still go through the probate court system. A Transfer on Death Deed conveys property outside of probate, allowing for you to avoid incurring court costs. Also, it excludes real property from Medicaid estate recovery.
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The Transfer on Death Deed does not replace a will. The will may still remain an important part of your estate plan especially if you have special bequests or a large amount of personal property. A Transfer on Death Dead covers only real property, like land and improvements, and conveys property outside of probate which allows you to avoid court costs. It is best if your will and transfer on Death Deed are consistent as to who receives your home and land. If your will and Transfer on Death Deed are inconsistent, the person named in the Transfer on Death Deed, not your will, will own your property after your death.
A Small (called SEA for short) can be an affordable way to transfer property to a ’s heirs. You may be able to use an SEA to an estate in Texas if you meet all of the requirements set out in the Texas Estates Code Chapter 205. Some of the important requirements include:Affidavit
- The died without a will.
- The left less than $75,000 in property (not including property and exempt property).
- The assets are worth more than the debts. (Note: When calculating the value of the debts and the assets, do not consider any mortgages or debts secured by exempt property as debts and do not consider and exempt property as assets.)
- The only real property owned by the was ’s property, and the real property will be inherited only by person(s) homesteading with the at the time died – ’s surviving and/or minor child(ren) who resided on property with .
- You are able to locate all of the heirs and all of the heirs will sign the Small (or someone with legal authority will sign on their behalf).
- There is no pending application for appointment of a and no has been appointed by a .
- There is no administration needed.
Exempt property includes the following:
for the use and benefit of the 's surviving and minor children; and
- some of the following categories of property, (up to $100,000 for a family or $50,000 for a single adult) for the use and benefit of the ’s surviving and minor children, unmarried adult children remaining with the 's family, and each other adult child who is incapacitated:
- home furnishings, including family heirlooms;
- provisions for consumption;
- farming or ranching vehicles and implements;
- tools, equipment, books, and apparatus, including boats and motor vehicles used in a trade or profession;
- a limited amount of jewelry;
- two firearms;
- athletic and sporting equipment, including bicycles;
- a two-wheeled, three-wheeled, or four-wheeled motor vehicle for each member of a family or single adult who holds a driver's license or who does not hold a driver's license but who relies on another person to operate the vehicle for the benefit of the nonlicensed person;
- certain livestock and food on hand for their consumption; and
- household pets.
Note: Exempt assets also include the’s pension benefits and IRAs. Insurance benefits are also exempt. Determining which property is exempt can be complicated. Talk with a lawyer if you are claiming any property is exempt and you have questions.
A homestead is a place lived in and owned by an individual (not a company) and includes a:
- separate (stand-alone) structure,
- condominium, or a
- manufactured (mobile) home.
A homestead can be located on owned or leased land, as long as the person that lives in the structure (home) owns the structure.
A homestead can also include up to 20 acres of land, if the land is owned by the person that lives in the structure (home) and the person uses the land for a residential purpose.
For more information on homestead uses and benefits, see Residence Homestead Exemption Frequently Asked Questions at the Texas Comptroller’s website.
This is a person (called an executor or administrator) that is appointed by a to handle duties of the estate.
If thedied with a valid will, the may have designated someone to be his or her (executor) at the time of the ’s death.
Or, the(in this , administrator) might be designated by the decedent’s beneficiaries, heirs, or even a judge. In all cases, the personal representative must be approved by a to have legal authority to act on behalf of the estate.
Estate administration is the legal process where an estate is managed (such as settling claims, paying debt, distributing property) after a is approved by a court.
Some estates do not require administration, but many do.
Tip: If property requires “letters testamentary” or “” to transfer the property, estate administration is required.
When someone dies without a will in Texas, the decedent’s “heirs” are entitled to the property in the estate.
- Heirs are named by the Texas Estates Code Chapter 201.
, according to the law set out in
- Depending on who survives the , heirs can include the ’s surviving , children and their descendants, father and mother, brothers and sisters and their descendants, grandfather and grandmother and their descendants, and other relatives.
- Once a Texas Estates Code Chapter 201.
names the heirs, the heirs’ property share is calculated according to the law set out in
- For a user-friendly guide on Travis County . : Texas Descent and Distribution descent and distribution for decedents that died after September 1, 1993, read this helpful chart published by the
Because a Small Estateform can only be used when someone dies without a will, the SEA form will need to list detailed information on who the heirs are, and what share of property they should get.
Under Texas law, a small must include the following information. Each item below corresponds to a section of the form (which is linked to here).
A. The name of, and facts about, the;
B. That 30 days have passed since thedied;
C. The county where theresided;
D. That the decedent died without a will;
E. That no administration is necessary;
F. The value of;
G. That the estate is solvent;
H. Whether the decedent applied for and received Medicaid benefits (on or after 3/1/2005);
I. The decedent’s estate assets;
J. The decedent’s debts and liabilities.
. The decedent's family history.
L. A list of all heirs and distributees;
M. A sworn signature from each distributee; and
N. A sworn signature from two disinterested witnesses.
It is incorrect to assume that you're acting on your behalf only, thinking that you are the one that needs the . As administrator of a ’s , you represent other interests beside your own. An administrator represents the interests of beneficiaries and creditors. This responsibility to act for the benefit of another is known as a fiduciary relationship. It gives rise to legal obligations and responsibilities that require legal expertise. The lawyer you hire represents you in your capacity as administrator, and helps you account to those to whom you are responsible.
Within 20 days from the date theappointing you, file an of office. If a bond was required in the order, it too must be filed within 20 days. Once you have taken the oath and paid the bond (if ordered), you have “qualified” and you may request one or more .
After thequalifies the administrator, he or she should take possession of all property belonging to the deceased. Any cash received from the estate should be kept in a separate bank account. The administrator pays estate debts and distributes the remaining assets as set out in the will (if there is one), or in line with the court’s findings of heirship.
In addition, the administrator may have to oversee a family allowance sufficient for the maintenance of the ’s surviving , minor children, and adult incapacitated children for one year from the date of death. The Texas Estates Code also allows for certain property to be exempt from creditors. The administrator sets the exempt property aside.
Texas provides for independent administration free ofsupervision. This means that after an independent executor or administrator is approved and an inventory of estate assets (or an in lieu of an inventory) has been filed, the executor or administrator can take care of the administration of the estate without further court involvement or supervision.
The independent executor or administrator can settle with creditors, set aside theand other exempt property, manage the property of the estate, sell assets for payment of debts or taxes, and distribute the remaining estate to those entitled to it. Thus, independent administration avoids the costs and delays associated with a court-supervised estate administration in which the executor or administrator must seek court approval before doing any of these acts. Courts often require that all heirs-at-law agree to an independent administration before an independent administration is permitted.
Within one month after qualifying for (the qualification date is noted on your letter), publish the to creditors of the estate in a local newspaper. Within two months after receiving the letters, send notice by registered or certified mail return receipt requested to all known secured creditors.
You give unsecured , such as credit card companies, under sTexas Estates Code chapter 308.054. This notice will state an unsecured creditor must present their claim before the 121st day after it gets notice. Your lawyer should prepare and mail these notices. Proof of publication and of all notices to real estate creditors should be filed with the county clerk.to
In general, a creditor does not have a personal judgment against the heirs or personal representative of a probate estate. In other words, if the assets of an estate are less than the debts owed, the debts, including the costs of administration, are paid per the Texas Estates Code up to the value of the estate assets.
The estate administration may be closed once the debts known to exist against the estate have been paid, or been paid to the extent permitted by the estate assets, and no further need for administration for the estate exists. There is no time period within which an estate must be closed.
A life estate gives a person the right to live on or use property during the life estate owner’s lifetime or until his or her death. Someone else is the full owner of the property. The person only has an ownership interest in the property as long as he or she is alive. Some people will use a life estate to avoid probate.
The way this works is that the property owner (grantor) has a deed prepared that gives the property to someone else (grantee) when the owner dies. The grantor has the right to live on and use the real property until death. At the grantor’s death the real property automatically goes to the grantee. After the life estate is created, generally the grantor cannot sell the property without the consent of the other person. This kind of deed should only be prepared by an attorney.