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Estate and Probate

Paying (Less) for Probate: 3 Alternatives to Estate Administration

By February 13, 2020
3 Alternatives to Estate Administration

Probating a decedent’s estate in Texas, using a traditional administration, can be an expensive and time-consuming process. Luckily, Texas provides alternatives that can resolve an estate without the requirements of an administration, potentially saving you lots of time and money. The catch is that you must meet very specific requirements in order to utilize them. You also have to make sure that the particular alternative you choose works best for your situation.

Here are three commonly used alternatives to traditional administration:

1. Muniment of Title

When probating a will as a Muniment of Title, instead of appointing a personal representative to distribute the assets of the estate, the court treats the will itself as the proof of title to the property. For example, assume a decedent passes away leaving a will giving everything to their child, with the only notable asset being the decedent’s home. If a Muniment of Title is used, the combination of the will and court order would act as the deed transferring the home to the child without the need to appoint a personal representative to do so.

Generally, in order to qualify for a Muniment of Title: (1) the decedent must have left a valid will; (2) the decedent cannot have any debts other than liens attached to property (e.g., a mortgage); and (3) there is no need for a traditional administration. An important thing to note is that some financial institutions are wary of using a Muniment of Title to release funds to the beneficiaries named in the will. Check with the financial institution before committing to a Muniment of Title to be sure that they will accept it.

2. Small Estate Affidavit

If a decedent does not leave a will, a Small Estate Affidavit can be used to distribute estate assets to decedent’s heirs. Using this alternative, the heirs are entitled to the assets that exceed the estate’s known liabilities and debts (excluding those relating to the homestead and other exempt property). For example, assume a decedent dies with $50,000.00 in nonexempt assets and has $10,000.00 worth of debt. Using a Small Estate Affidavit, the heirs would be entitled to the $50,000.00 less the $10,000.00 in debt, resulting in $40,000.00.

Generally, in order to qualify for a Small Estate Affidavit: (1) thirty days must have passed since decedent’s death; (2) no petition for the appointment of a personal representative is pending or has been granted; and (3) the value of decedent’s estate assets, excluding their homestead and other exempt property, must not exceed $75,000.00. Be sure to pay close attention when transferring title to real property. A Small Estate Affidavit can only be used to transfer title to a decedent’s homestead. If they owned additional real property, other probate measures would need to be considered.

3. Affidavit of Heirship

An Affidavit of Heirship is a document sworn to by disinterested witnesses that include information regarding a decedent’s heirs and can be used to show evidence of title ownership. For example, if a decedent died without a will, an Affidavit of Heirship could be recorded in the real property records to give evidence to prospective title companies identifying the heirs that inherited from the decedent under Texas law when no will was left. The title company can then rely on this evidence when working with the heirs to convey the property.

An Affidavit of Heirship is generally used when a decedent leaves no will and does not include the requirements of a Small Estate Affidavit. However, it is important to note that the Affidavit of Heirship is only evidence of title and does not transfer title. In fact, the evidence only creates a presumption of title after being recorded for five years. Additionally, since an Affidavit of Heirship is only as good as the person who swore to it, some title companies are reluctant to rely on them when determining title issues. Although usable, these tend to be one of the more unreliable probate alternatives.

If you are lucky enough to meet the requirements for these probate alternatives, you will likely find yourself spending much less time and money than with a traditional administration. Don’t forget to think about these alternatives when deciding how to handle a decedent’s estate – your wallet will thank you!