Estate Administration Disputes under Texas Law: Questions & AnswersLee McDonald
Hiring A Texas Probate and Estate Administration Attorney
The role of personal representatives and their legal duties should never be underestimated. If you are a beneficiary and suspect that the personal representative is not conducting their duties sufficiently, we are ready to review the facts of your case and take action. If you are seeking an appointment as a personal representative, the highly qualified attorneys at DallasProbateAttorneys.com can help you execute your duties and avoid litigation.
We have helped clients avoid or minimize disputes by developing a strong estate plan at our firm. However, in other situations, clients come to us when a dispute has already started. When this happens, we strive to resolve issues as efficiently as possible. Either way, our team of highly qualified probate dispute attorneys and estate planning attorneys can advocate for your needs and work to achieve the best outcome.
What Is Estate Administration?
If you have recently lost a loved one, you know that loss is oftentimes accompanied by a lengthy list of tasks. One of these tasks includes closing your loved one’s estate. Ideally, the process is smooth, and you have supportive family members and friends to help you. However, other times, disagreements arise, and families and friends need additional guidance to help them work through disputes.
Estate administration is the process of distributing the deceased person’s property, such as money, cars, or homes, to the deceased person’s beneficiaries. It also includes paying the deceased person’s remaining debts. When you hear the word “estate” in movies, the word is often used to describe a lot of land with large and expensive homes with long driveways, incredible amenities, many vehicles, and multiple generations of family wealth. In reality, estates heavily vary in size, from minimal to considerable assets and debts. In addition, estates can include things that you may not normally think of, such as family pets, second homes in other states, stored boxes of holiday decorations, and family heirlooms of sentimental value.
Because the entirety of a deceased person’s assets and debts are part of estates, the administration process must address everything. Every estate and the people involved are different, so it isn’t easy to create an estimated timeline from start to finish. Typically, the process takes several months.
The Role Of Personal Representatives In Estate Administration
A personal representative, who is called an “executor” when the deceased person had a will or an “administrator” when the deceased person did not have a will, is appointed to administer the estate. The personal representative’s responsibilities can include:
- Probating the will and seeking appointment as executor or administrator;
- Conducting an inventory of the estate’s assets and debts;
- Finding and contacting beneficiaries;
- Ensuring that beneficiaries receive what they are entitled to;
- Paying creditors; and
- Selling or investing assets as required by law or in the best interest of beneficiaries.
Texas law grants personal representatives considerable power and authority to administer these responsibilities. Because of the important role personal representatives play, they are called “fiduciaries.” A fiduciary manages assets for someone else. Serving as a fiduciary comes with particular legal duties, including the duty of care and duty of loyalty to the person whose assets are managed.
Duty Of Care
When personal representatives carry out responsibilities, they must do so the way an ordinary person would care for their estate. This does not mean that personal representatives necessarily need to be exceptionally skilled in any particular area, but all personal representatives must act reasonably and diligently. If you have recently been appointed, consider all the tasks you need to complete. For example, a common responsibility includes taking a complete inventory of all assets and providing an inventory report to beneficiaries and the court. Because inventories can require a lot of effort and time, personal representatives must plan ahead and seek help if needed. Moving slowly or forgetting to submit inventory reports could be considered a violation of the duty of care.
Other common responsibilities include paying outstanding debt, selling a home, providing inheritance money to beneficiaries, or searching for a particular family heirloom. With these examples in mind, your duty of care could include paying all creditors timely, selling the home at a reasonable price and, if needed, with the help of a professional, and ensuring beneficiaries receive their inheritance timely and in the amounts granted to them. If you have been appointed, our team is here to help you address your responsibilities so you can avoid violating the fiduciary duty of care.
Duty Of Loyalty
Personal representatives are required to put beneficiaries and the needs of the estate before personal interests. Common issues arise when personal representatives attempt to gain something from the estate, such as unreasonable payment for time spent during the process, accepting or doing favors for beneficiaries at the expense of others, or withholding information from beneficiaries. Like the duty of care, properly executing the duty of loyalty does not mean that you need to have extraordinary skills in any particular area. It does mean that you act appropriately on behalf of the beneficiaries and close the estate using your best efforts. If you are planning your estate, our team at DallasProbateAttorneys.com can discuss with you all aspects of your estate to consider and help you choose a personal representative fitting your needs.
It is extremely important to understand how the duties of care and loyalty apply to you and their importance in probate and estate administration. Personal representatives who do not adequately perform their duties could face legal penalties.
Knowing When To Take Legal Action
Depending on whether and how your loved one addressed estate planning, estate administration disputes may arise. Common disputes revolve around frustrations between personal representatives and beneficiaries or other interested parties. Disputed issues can include:
- Whether to remove and replace personal representatives;
- Whether a personal representative violated fiduciary duties;
- Whether to sell or keep a jointly inherited asset;
- How to maximize the value of assets;
- Whether to litigate in court or attend mediation; and
- Requesting relief from the court for a personal representative’s wrongful behavior.
Legal Action Against Personal Representatives
When power is used at the expense of another, beneficiaries and other interested parties can hold the personal representative accountable by requesting relief from the court. This is called “standing.” In other words, a third party who is not directly involved in the case cannot file a legal action against a personal representative. However, if you are a beneficiary, you can file a petition with the court and request that the current personal representative be removed and replaced with someone else.
Other forms of relief could include filing a claim against a personal representative for breach of fiduciary duty or failing to comply with court orders timely. Beneficiaries can also request that a personal representative post a bond, a form of insurance against mismanagement of the estate, or obtain a restraining order to protect assets from being disposed or sold. Forms of relief can be appropriate under different circumstances, and each requires its own set of proof.
Unfortunately, unfair actions of personal representatives do not necessarily mean that legal relief is available. For example, if an administrator has an option to sell or keep a car, and you as a beneficiary do not approve of the administrator’s decision, you may not be able to stop the administrator from choosing whether the vehicle is sold. Other times, beneficiaries may disagree with a personal representative’s interpretation of the will. DallasProbateAttorneys.com helps clients narrow their concerns and distinguish legal claims from normal frustration with a personal representative’s decision-making.
Disputes Between Beneficiaries
Although beneficiaries often dispute issues with personal representatives, beneficiaries can argue amongst themselves. Oftentimes, disputes center on whether or how to split jointly inherited assets.
After the personal representative distributes the estate property, beneficiaries may have different ideas regarding what and how the property should be addressed. As a result, sometimes court involvement is required to divide or sell the property. This is called a partition action.
Perhaps you and your siblings have inherited through a will an important and expensive asset, such as a home, land, an antique vehicle, or a family heirloom. If your siblings want to keep an inherited house but you are not interested in maintaining ownership, the simplest solution could be an agreed-upon buyout arrangement. For example, if the home is worth $600,000, your siblings would buy out your share of the home and have your name removed from the title. These agreed-upon arrangements typically do not require court intervention. The same kind of arrangement can apply to other assets, such as the antique vehicle or other personal property.
Not all inherited assets can be addressed so easily, such as jointly inherited land from a will or deed. It is not uncommon for a joint owner to want out of land ownership. In family disputes, one of the beneficiaries may want out due to extreme interpersonal conflict or have a different opinion in how the land should be used. For example, if you believe the land is most useful for farming but your siblings wish to build a home, you could consider a partition of the land. In these actions, a court can consider whether the land should be divided such that you would own an equal portion of the land to use for farming while your siblings would own the other portion for building a home. Rather than one large parcel of land owned jointly, two smaller parcels could be owned separately.
Partition actions can become more complicated when the value of the land as a whole declines when divided into smaller parcels. Courts might weigh the pros and cons of forcing the sale of the entire parcel of land versus partitioning the land into smaller plots for the beneficiaries who wish to keep the land. Because of the strong value to allow landowners to keep their land, courts typically make every effort to avoid a complete forced sale of an entire land parcel.
Related disputes can occur when there is disagreement over the management of recently inherited land, including maintenance, taxes, and use of the land. In addition, beneficiaries often dispute the value of the land upon resale or the amount of the asset that each beneficiary received.
Knowing your beneficiaries’ desires for valuable assets can help you plan your estate and avoid interpersonal conflict among your beneficiaries. The experienced team at DallasProbateAttorneys.com is highly qualified to explain how you can go about issues relating to partition actions.
Resolving Disputes Using Mediation And Litigation
Believe it or not, probate and estate administration cases can generate heated discussions over whether mediation should be attempted or whether the parties should litigate disputes. Texas law does not require parties in probate and estate administrations to participate in mediation or other forms of Alternative Dispute Resolution (ADR) unless the court orders it. Outside court direction, parties cannot be forced into mediation. In some estate litigation cases, all parties in a dispute will agree to try mediation. In other cases, some parties may express interest in mediation, while others believe litigation will be the only effective method to resolve outstanding probate disputes.
Parties who do not wish to try mediation are apprehensive for many reasons, such as a lack of interest in compromising or the potential for few or no settlement agreements. It is true that compromise is difficult and that mediation can end without any resolutions. However, mediation is a very popular and successful method used by an estate litigation attorney to resolve many probate and estate disputes.
Benefits Of Mediation
Although litigation in court may be the best or only option, mediation has benefits that the courtroom cannot provide.
- Confidential. Mediated discussions generally cannot be disclosed to the court whether the parties come to a settlement.
- Lowers Costs In Less Time. Mediation is typically cheaper than litigating a dispute in court because there are far fewer court filings and attorney hours spent preparing for and attending court. In addition, because mediation typically lasts a half to a full day, parties can both work through issues and come to an agreement in far less time than it takes to litigate issues.
- More Control. Although compromise is often involved, mediation empowers parties to determine outcomes rather than giving that authority to a court.
- Informal and Candid. Mediation provides a more relaxed environment than courtrooms, and parties can speak more freely without the procedural requirements and formal pleasantries required for court appearances.
- Flexible. Courtrooms are adversarial in nature, but mediation allows attorneys to advocate for their clients in a “give and take” atmosphere.
With numerous success stories and experience in mediation, DallasProbateAttorneys.com’s estate litigation lawyers have helped clients come to partial or complete settlement agreements. However, every case and attorney client relationship is different, and we can help you decide whether mediation or other forms of ADR is appropriate for your case. Contact a probate litigation lawyer today for more information.
Estate Administration Disputes For Unmarried Partners And Step-Children
There are occasional situations where well-meaning individuals hope to join an ongoing probate or estate administration, only to learn that they have few options available to them. These situations are very unfortunate and are often preventable with estate planning. Common examples include partners in unmarried but committed relationships and stepparents who wanted to provide for their partners or stepchildren but failed to do so. These circumstances arise when the deceased partner or stepparent did not create a will, will alternative, or did not name their partner or stepchildren in an existing will.
Long-term partners and stepchildren are typically left without legal options in the above circumstances. Their ability to participate in probate or estate administration processes is typically severely limited or nonexistent. While disputes of any kind are undesirable, probate and estate administration processes exist to ensure that any and all interested parties have a time and place to make their voices heard. Estate planning helps ensure that stepchildren and long-term partners are given those opportunities.
There are numerous options available to ensure that long-term partners and stepchildren are cared for in estate planning, such as wills and will supplements (called a “codicil”) that identify specific assets and grant them to named partners and stepchildren. Non-probate alternatives include setting up a trust account, designating a partner or stepchild as beneficiaries on a life insurance policy, conveying a home to them on a Transfer on Death Deed, or using joint bank accounts.
If there is no estate plan at the time of death, DallasProbateAttorneys.com can discuss the circumstances of your case and determine options available to you.
Hiring A Texas Probate Attorney
If you have not planned your estate, our attorneys are ready to guide you through important decisions and explain how the law would apply to your wishes for the future. Ideally, probate, trust, and estate litigation could all be prevented with an iron-clad estate plan, and sometimes that happens. Even under the best of circumstances, however, probate and estate administration can bring out the most challenging parts of personalities and aggravate familial relationships to the point where disputes just happen.
If any of this is familiar to you, our team at DallasProbateAttorneys.com is uniquely suited to help you prevent further unnecessary litigation. Because our team focuses on estate administration, probate, and estate planning, we know what Texas probate courts expect from attorneys and families, and we are very familiar with the applicable laws and procedures. Above all else, we know that these kinds of disputes are some of the most emotionally charged in the legal field, and our clients want them to end as quickly as possible. We are ready to advocate for you when you are. Please get in touch with our law firm at (972) 991-7700 or contact us online.
Taking Legal Action Against Personal Representatives In Texas
If you recently lost a loved one, you may be involved in addressing the deceased person’s assets and outstanding debts. This estate administration process is led by a personal representative, sometimes called an “executor” or “administrator.”
Whether your role is beneficiary, personal representative, or another interested party, the process can be stressful. For beneficiaries, stress can arise when they believe the personal representative is not fairly or accurately carrying out the estate. Sometimes personal representatives are simply carrying out the deceased person’s wishes or doing their best to address outstanding debts, and beneficiaries may have to live with those decisions whether they are fair or not. Other times, personal representatives are not acting in ways that serve the estate’s best interest. When this happens, beneficiaries may have a legal claim against the personal representative.
Whether the deceased had a will or not, the personal representative appointed must abide by legal duties called “duty of loyalty” and “duty of care.” Under Texas law, the duty of care requires a personal representative to care for the estate’s assets and debts in the way a sensible person would care for his own assets and debts. To carry out the duty of care, personal representatives must be open and honest with their knowledge of an estate, listen to beneficiaries’ concerns and requests, keep detailed records, make smart investment decisions, and timely act with decision-making and distributing assets.
The duty of loyalty requires a personal representative to act in the best interests of the beneficiaries, avoid conflicts of interest, receive reasonable payment for their role, and avoid making profits from business dealings in the estate.
For example, consider a situation where several siblings are all beneficiaries of their parent’s estate, but one serves as the estate’s personal representative. Even if the sibling-appointed personal representative is on bad terms with one or more of the other siblings, the personal representative is legally obligated to consider their interests rather than use the executor position as a way to slight or exclude a sibling. This also means that the personal representative cannot favor one sibling over others or use another sibling’s estate disbursement to gain something. This could include inheritance money to obtain a personal bank loan or collecting unreasonable payment from the estate. Situations where an executor personally benefits at the expense of the estate are often called “self-dealing.”
Claims Against Personal Representatives For Violating Their Duties
If you are currently at odds with a personal representative you believe is not carrying out their duties, our team of highly qualified probate and estate administration attorneys at DallasProbateAttorneys.com can help you determine whether you have legal options.
There are a few things to keep in mind when you consider a personal representative’s actions. First, ask yourself whether your thoughts and feelings towards the personal representative’s actions result from interpersonal conflict. In other words, it is important to know whether your frustrations are more related to the person or their actions. Often times both are involved, and our team is ready to help you sort through the unique facts of your case.
Claim For Removal
Removal of a personal representative is a common legal claim available to beneficiaries. Our team has successfully petitioned to remove personal representatives from their positions and appoint another person to finish estate administration. Under Texas law, courts, beneficiaries, or other interested parties can seek removal of an executor for several reasons, including:
- Failing to make and submit an accounting to the court, like asset records or inventory lists;
- Proven guilt of gross mismanagement/misconduct during the administration process;
- Incapacitation or jail time; and
- Material conflict of interest.
Courts can also remove personal representatives if they fail to provide the court with qualifications for their appointment or provide the initial documentation listing the estate’s assets and any creditor claims against it.
Claim For Additional Bond Or Setting Bond
Bonds are sometimes a requirement placed on a personal representative. Bonds serve as a kind of insurance against a personal representative’s wrongful behavior, including fraud, theft of money or other assets, and misrepresentation of facts. The bond amount is often dependent upon the size of an estate.
If an administration does not require a bond, the law allows beneficiaries to file a claim and request that the personal representative obtain one. If the court grants the request, the personal representative is responsible for applying for and purchasing the bond. Should there be wrongful conduct, the bond company reimburses beneficiaries for the amount due. The bond company can then pursue the personal representative for the amount owed. Whether you are planning your own estate or are considering filing a claim in court, bonds are an important consideration in estate administration.
Injunctive Relief: A Method For Preventing Wrongful Conduct
If you are a beneficiary and you want to prevent a personal representative from doing something, a claim for injunctive relief could be right for you. Injunctive relief, a common remedy used in many types of law, can order a personal representative to refrain from acting if doing so would be harmful to you in some way. For example, suppose a will leaves you an expensive antique car, and the personal representative is trying to sell it. In that case, an order providing injunctive relief could prevent the executor from selling the vehicle.
There are different types of injunctive relief. For example, temporary restraining orders, or TRO, immediately and temporarily prevent a personal representative from doing something, such as wrongfully selling an asset that is in dispute. Unlike other forms of injunctive relief, a court can grant a TRO without giving the personal representative a chance to provide a defense. However, a TRO typically lasts only 14 days. At that time, the executor will have an opportunity to defend the prohibited act.
Another form of short-term injunctive relief, called a temporary injunction, requires the same kind of proof as a TRO. However, the personal representative has an opportunity to attend a hearing and defend the action. If the temporary injunction is granted, the personal representative cannot act until a full trial addresses the issue. The court determines whether the personal representative is permanently prohibited at the trial, called a “permanent injunction,” from the action.
Hiring A Texas Probate Attorney
Personal representatives have considerable authority over estate administration, and their actions directly impact the outcome of a beneficiary’s inheritance. If you are a beneficiary and are concerned about a personal representative’s actions, please call the estate litigation attorneys at DallasProbateAttorneys.com at (972) 991-7700 or contact us online for a consultation.
Texas Law And Unmarried Partners In Estate Planning and Administration
If you are in a long-term, committed relationship and have shared expenses, a home, or other assets, it is worth paying special attention to how you and your partner have provided for each other when the other dies. Texas does not provide the same legal protections for unmarried partners as it does for married couples. Therefore, if you and your partner are unmarried, it is important to know how the law would likely apply to you with and without a will.
Passing Without A Will In Texas
Dying without a will can significantly impact the partner who is still living. Texas intestate succession laws describe what happens with an estate when someone dies without a will. These laws describe what happens when someone dies with or without a spouse. If your partner did not have a will, a court will decide what happens to your partner’s estate as if your partner did not have a spouse. When there is no spouse, the court will look for other descendants who could inherit your partner’s property.
Individuals first in line to be descendants include children or possibly grandchildren. If your partner died without children, your partner’s parents and any siblings are next in line to inherit the estate. If there are no parents or siblings, the law looks next to grandparents and their descendants (think aunts, uncles, and cousins). If your spouse has no remaining descendants, the state of Texas takes the estate. Even if you know your partner would have wanted all personal possessions and important assets to go to you, probate courts are unlikely to consider that.
Claims For Unjust Enrichment
If you and your partner have assets that you both purchased or improved, such as a home, car, land, or personal property, you may have a claim for unjust enrichment. This kind of claim is based on the concept of fairness. Unjust enrichment requires the following proof:
- A formal, written contract does not exist between you;
- The estate’s acquisition of the property would be at your expense;
- The party (your partner’s estate) who benefited from the property is unjustly enriched.
Because this kind of claim is difficult to prove, our team of estate litigation lawyers at DallasProbateAttorneys.com can evaluate the facts of your case and help you develop a proper claim.
Proper Estate Planning Can Protect You And Your Partner
If you and your partner have wills or other non-probate assets such as life insurance policies, joint bank accounts, trusts, or Transfer On Death Deeds, intestate succession laws are unlikely to apply to your estates. A will allows you and your partner to provide for each other specifically, such as a home, vehicle, contents in a safe deposit box, and money. If desired, you can appoint each other as executors so that you both play a large role during the estate administration process. Then, when it comes time to submit one of the wills to probate court, you and your partner can find peace knowing that the other will be left with protections.
Hiring A Texas Probate Attorney To Effectively Manage The Probate Process
DallasProbateAttorneys.com is a team of highly qualified probate and estate planning attorneys who have successfully guided unmarried couples in their estate planning and administration process. Please contact DallasProbateAttorneys.com at (972) 991-7700 or online for a consultation when you are ready.
Jointly Inherited Property: How Texas Addresses Disputes Between Beneficiaries
After the deceased person’s will has been probated or a probate court determines heirs, the personal representative distributes assets to beneficiaries. Often, beneficiaries get along well, and they easily accept what they are due under the will or intestate succession laws. Other times, beneficiaries have had an interpersonal conflict for several years, and that can heavily impact their interest in sharing jointly inherited property in the short or long term. Even without interpersonal conflict, shared inheritances can be subject to considerable debate about asset worth and whether to sell or split property.
Sibling Disputes Over Jointly Inherited Land
Although anyone who has inherited property with another person can have disputes, sibling disputes are particularly common.
Consider a family farm of 200 acres that you and your four siblings inherited from an uncle. You and your siblings were each granted one-fifth of the land. You live out of state and do not have much interest in owning land, but your siblings plan to farm the land and pass it to their own children someday. If you had your choice, you would sell your share of the land and enjoy the proceeds.
In these situations, often, siblings can all agree to buy out the share of that sibling who does not want to retain ownership. If all siblings agree to this arrangement, then all have what they want from the land. But unfortunately, not all individuals with joint ownership can arrive at agreements so easily.
Perhaps instead of selling your share, you instead wish to build a home. Because your siblings believe the land would be better used for farming, a dispute begins over what to do with the land. After months of arguing, you decide that you want to keep your share of the land but no longer share ownership with your siblings. Irritated by your desire, they decide that the entire plot of land would be better off if it was all sold together. A partition action is commonly used to address disputes like these.
Filing A Partition Action In Texas
A partition of land must be fair and equitable. Generally speaking, courts favor parties retaining land ownership if possible. A partition action can begin in a county where any part of the property is located. After filing, the court will evaluate whether the land can be divided without materially impairing its overall value. If it can, it is called an “in-kind” partition. If it cannot, it is referred to as a partition by sale. Because your siblings wish to sell the land in its entirety, they must prove that a land sale is in the parties’ best interest and preserves the value of the land as a whole. You must prove that dividing the land is fair and equitable.
Suppose you can prove that dividing the land is fair and equitable. In that case, the court appoints neutral third parties, likely a realtor, to review the land and report findings on the best way to partition the land. All parties are given time to object to the report. If no objections are made, the land is partitioned if a judge approves the report. If objections are made, the court must hold a trial on the objections and decide.
Hiring A Texas Probate Lawyer
If you or a loved one is facing a dispute over inherited land, contact the highly experienced attorneys at DallasProbateAttorneys.com for guidance on the proper path forward. To schedule a consultation with one of our highly qualified attorneys, please call us at (972)-991-7700 or online for a free consultation.