Thứ Năm, 9 tháng 6, 2005

Why Dying Without a Will is More Costly in Texas

In my June 8, 2005 post, I mentioned how property owned by a Texas resident passes when he dies without a Will and warned that without a Will, you are allowing the State to determine who receives your assets at your death.

The dangers of dying intestate are not limited to the distribution of your assets. It is more expensive and troublesome to administer an estate where there was no Will than one where even the simplest of Wills was created. The reason has to do with the dual hearings that must be had to appoint an administrator for the estate and the possibility of a "dependent" administration.

Where there is no Will, Texas law dictates who the heirs will be. But in order for that law to be binding on banks, brokerage houses, and real estate title companies, an heirship proceeding must be held by the local probate court (or where there isn't a probate court, the county court at law). This proceeding is for the purpose of a judge legally declaring the proper heirs so that all the parties know their rights to the estate assets.

Why is this more expensive than the normal probate of a Will? Well, in all Texas heirship determinations, the probate court is required by law to appoint an attorney ad litem to represent the interests of all unknown heirs at law. Thus, not only are the heirs paying for the attorney that is representing the estate, they are also paying for the attorney ad litem, whose costs can run anywhere from $400 to $700, depending on how much work the ad litem has to do to track down all the possible heirs. An ad litem is not required where the Decedent had a valid Will.

In addition, the estate attorney has to publish a notice in a local newspaper to give proper notice to all the potential heirs of the Decedent. Depending on the local paper, this cost can be anywhere from $100 to $200. Again, this publication is not required where there was a valid Will.

The biggest problem with not having a Will is that it subjects the estate to what is known as a "dependent" administration, rather than an "independent" administration. Texas is one of the few states that has independent administration of estates, where the executor named in the Will can operate freely of court supervision, which saves time and legal expenses. The executor does not need approval to sell property, pay expenses, or distribute assets. The executor also does not need to post a bond (assuming the Will waives that requirement). In a dependent administration, however, the probate court supervises every activity of the administrator, and the administrator must file requests with the court for approval to do anything related to the estate assets. Further, the administrator is required to file an accounting with the court showing how every penny of the estate is spent. While in theory this seems like a good idea, it is extremely expensive and time-consuming and can drag out the administration process out for months. The administrator will also be required to post a bond equal to or exceeding the value of all the estate assets.

While all the distributees of the estate can agree on an independent administration, and even the waiving of a bond, if there are any minor distributees, almost all probate courts in Texas will decline to appoint an independent administrator because the goal is to protect the interests of any minors.

In a future post, I will discuss the special problems associated with minors receiving property in Texas through inheritance or under a Will without it passing in trust, and why guardianships are as big a problem as dependent administrations. The moral, of course, of all of this is that just because you do not have a lot of assets does not mean you do not need a Will. The simplest of Wills can help avoid the delays and costs associated with intestacy and provide for a smooth transition of your estate to your loved ones.

Không có nhận xét nào:

Đăng nhận xét

Bài đăng phổ biến