Texas is known among the legal community as a state with a very efficient process for helping people close out the estate of someone who has died.  This is not true in many other states – if you die – the fun has just begun.  (no offense California!)

Just a thought!

Before you die, leave a will.  Without a will, Texas gets to choose where it all goes and how!  You might not like what happens . . .

After the family loses someone

Here is what you do when the family has lost someone.

This is tailored a bit for Texas:

1. Get a Lawyer’s opinion. As soon as possible, get a lawyer’s opinion of the situation.  It can be tough when the grieving process is in full swing to really worry about this, but most legitimate lawyers doing this kind of work will give a quick review without too much cost.  You get what you pay for generally. A more experienced attorney might cost more, but during this time, when the family is posed for a fight, riding through the probate process in a limo is better than peddling on a bike (i.e. a cheap lawyer).  And a really good lawyer might find a way to avoid a family squabble that wastes money.

2. Notify probate court.  In Texas, a lawyer is required to file probate in most cases. If the will named you as executor, or you feel you are the proper person to handle the estate if there is no will, then you must file the will (if available) and petition at the probate court to be officially recognized as executor or administrator.  If there is no will, the heirs must petition the court to be appointed administrator.  There is a good Nolo discussion on the various flavors of probate here: http://www.nolo.com/legal-encyclopedia/texas-probate-an-overview.html   It isn’t recommended to get too caught up in all these variations, just get an experienced lawyer that can find the simplest way to get it all completed.  Texas does probate right – compared to most states at least.

2.  Inventory the assets and identify all debts.  You will need to compile a list of everything the decedent owned as well as the debts against the estate. Take control of the assets to prevent loss.  Get legal advice prior to paying the debts.  Some debts are owed before others, such as funeral costs are owed before consumer debt generally.  And if you pay a debt out of your own pocket, you might not get it back!

3.  Open a checking account.  Usually it is advisable to open a checking account on behalf of the estate to pay bills and taxes.  Check with the lawyer of course.

4.  File tax returns.  You must file a final income tax return for the decedent.  If the estate has any assets that earn interest, you must file an income tax return for the estate.  If the estate exceeds $5.12 million, you will need to file a federal estate tax return within nine months of the date of death.

5.  Distribute property.  After creditor claims are satisfied and bills paid, you will need to distribute the remaining property to heirs.

6.  File a final account.  A final account with the probate court in order to close out the estate is necessary sometimes.  Texas recently passed a law that allows for an affidavit (letter to the court) to be used instead of a full accounting — which basically says that all bills are paid and everyone got their share of the estate.  And essentially yes, that everyone agrees with it.

There is a lot more involved but this should get you started.  Probate can takes months and even sometimes more than a year.  But with a good lawyer, it can be made as painless as possible – while keeping the family together we hope.