A common misconception is that having a will means an estate automatically avoids probate.
In Texas, that is not necessarily the case. A will tells the court and the family how a person wanted certain property to be distributed after death, but the will may still need to be admitted to probate before it can be used to establish a beneficiary’s right to property. Texas law specifically provides that, with limited exceptions, a will is not effective to prove title to or the right to possession of property disposed of by the will until the will has been admitted to probate.
That does not mean every asset owned by someone who had a will must go through probate.
For example, life insurance or retirement accounts with named beneficiaries, certain payable- on-death accounts, and property held with rights of survivorship may pass directly to the designated beneficiary outside of probate.
In some cases, a family may also be able to use a more limited probate procedure instead of a full estate administration.
The right approach depends largely on what the person owned, how those assets were
titled, and whether there are debts or other issues that require an executor to administer the estate.
What Does a Will Actually Do?
A will is a legal document that states how a person wants certain property handled after death. It may also name an executor—the person who the decedent has selected and appointed to manage and administer the estate—and contain instructions about how the estate should be administered.
But simply finding a signed will does not necessarily give the named executor immediate authority to access bank accounts, sell estate property, or distribute assets.
Probate is the court process through which a judge determines whether a will should be legally recognized and who will be appointed to have the authority to administer the estate.
Does a Will Automatically Transfer Property?
Usually not.
Texas law distinguishes between the ownership interests that arise at death and the ability to use a will as legal proof of title or possession.
Under the Texas Estates Code, property devised by a valid will generally vests in the
beneficiaries at the person’s death, subject to the administration of the estate and other provisions of law.
At the same time, the Texas Estates Code states that a will generally cannot be used to prove title to or the right to possession of property until it has been admitted to probate.
Perhaps more importantly, banks, title companies, and other third parties often will not release funds or allow the sale of property based simply upon a will; they will often require something from the probate court confirming that the person asking for the funds or trying to sell a property on behalf of an estate actually has the authority to do so.
When Is Probate Usually Necessary Even If There Is a Will?
Probate may be needed when the deceased person owned assets in their name alone that do not have another legal mechanism for transferring ownership.
Examples include:
• A home or other real estate titled solely in the deceased person’s name
• Bank or investment accounts without a payable-on-death or transfer-on-death beneficiary
• Vehicles or other titled property in the decedent’s name
• Business interests like interest in a partnership
• Personal property that needs to be formally distributed
• Money or property owed to the deceased person
Probate may also be necessary when an executor needs legal authority to take actions for the estate such as collecting assets, dealing with creditors, handling tax matters, or selling property.
As outlined below, in some of these situations a more streamlined administration process such as a muniment of title or small estates affidavit may be used where the estate is otherwise simple and uncontested.
What Assets May Pass Without Probate?
Some assets are considered non-probate assets because they pass according to a beneficiary designation, contract, or ownership arrangement rather than under the will.
Common examples include:
Life Insurance
If a life insurance policy has a valid living beneficiary, the proceeds generally pass directly to that beneficiary rather than through the probate estate.
Retirement Accounts
Retirement accounts with designated beneficiaries generally pass according to the beneficiary designation on the account.
Payable-on-Death Accounts
A bank account with a valid payable-on-death beneficiary can generally be paid directly to the named beneficiary after the account holder dies.
Transfer-on-Death Arrangements
Certain property may be subject to a transfer-on-death designation, including securities accounts and, when the legal requirements are satisfied, real estate transferred through a Texas Transfer on Death Deed (TODD).
Texas law provides that qualifying real estate subject to a TODD transfers to the designated beneficiary at the owner’s death, assuming very specific statutory requirements are satisfied.
Property With Rights of Survivorship
Jointly owned property may pass directly to the surviving owner when the ownership documents include a valid right of survivorship.
Life insurance, retirement funds, payable-on-death bank accounts, certain financial assets, and qualifying survivorship property are examples of assets that may pass without probate.
Case Study Example: Why a Simple Will Might Still Need to Be Probated
Consider a parent who dies with a valid will leaving everything equally to two adult children.
The parent owns:
• A house titled solely in the parent’s name
• A checking account with no payable-on-death beneficiary
• A retirement account naming the two children as beneficiaries
• A life insurance policy naming the two children as beneficiaries
The retirement account and life insurance proceeds may generally pass directly to the named beneficiaries without going through probate.
The house and checking account, however, may need to be handled through the probate process because they were owned solely by the parent and do not have another mechanism for transferring ownership.
In that situation, the existence of the will helps determine who should receive the property, but the family may still need the court to admit the will to probate.
The exact result will always depend on how the property is titled and the specific facts of the estate.
Does Probate Always Mean a Full Estate Administration?
No.
Texas has more than one way to probate a will, and some estates may qualify for a more limited streamlined procedure.
One option is probating a will as a muniment of title.
With a muniment of title, the court admits the will to probate but generally does not appoint an executor or administrator to conduct a traditional administration. The court’s order can then serve as authority for transferring property to the beneficiaries named in the will.
This procedure may be appropriate when there is a will but no need for a formal administration.
It is often particularly useful when real property needs to be transferred, and the estate does not have unpaid debts other than certain debts secured by real estate.
A muniment of title is still a probate proceeding. It is simply different from a traditional probate administration involving an executor or administrator.
Whether it is available depends on the estate’s particular circumstances.
What About a Small Estate Affidavit?
A Small Estate Affidavit is another simplified procedure available under Texas law, but it generally is not an option when the person left a will.
A Small Estate Affidavit is intended for certain intestate estates—meaning estates where the person died without a will—and is subject to additional requirements regarding the size and nature of the estate.
This distinction is important because families sometimes hear the phrase “small estate” and assume that a small estate with a will automatically qualifies.
The appropriate procedure depends on more than the dollar value of the estate.
How Long Do You Have to Probate a Will in Texas?
Texas generally requires a will to be admitted to probate within four years after the person’s death, unless the applicant can establish a statutory exception.
The Texas Estates Code states that a will generally may not be admitted after the fourth anniversary of the testator’s death, unless the applicant proves that they were not in default for failing to present it sooner.
Families should not treat four years as a recommended waiting period.
Waiting can create practical problems, particularly when property needs to be sold, financial accounts need to be accessed, or ownership needs to be established.
If a will has been found, it is helpful to determine relatively early whether probate will be necessary.
How Do You Know Whether an Estate Needs Probate?
The short answer is that you should seek the advice and counsel of an experienced probate attorney in your area to advise you. Before meeting with the lawyer, you should create a list of everything the person owned and determine how each asset is titled.
At the first meeting with your lawyer, if possible be prepared to answer or at least have some information on the following:
• Is there a valid will?
• What property was owned solely in the deceased person’s name?
• Does the estate include real estate?
• Do bank accounts have payable-on-death beneficiaries?
• Do investment and retirement accounts have named beneficiaries?
• Is any property owned with a valid right of survivorship?
• Is there a Transfer on Death Deed?
• Are there debts or creditor claims that need to be addressed?
• Does someone need legal authority to sell or manage estate property?
Sometimes an estate may contain mostly non-probate assets and require little or no probate administration. In other cases, even one significant probate asset—such as a house titled only in the deceased person’s name—can create a need for court involvement.
How We Can Help
If a family member or other loved one has died and you are unsure what to do next, Noel L. Stout and Allison White of Almanza, Blackburn, Dickie & Mitchell LLP can help identify which assets may require probate and determine which probate procedure may apply to the estate.
To discuss your Texas probate matter, contact ABDM at (512) 474-9486.
