Dax Pueschel Associate Attorney, Blizzard & Zimmerman, P.L.L.C.
SUMMER 2019 ISSUE FAMILY LAW MATTERS
I. A Family Member Dies Unexpectedly & Without a Will: What Next?
A. Time is of the Essence The tragic and almost absolute truth about life is that we will all experience a family member’s death at some point. When that happens, thoughts of investigating potential claims of the estate are usually the farthest things from a person’s mind. The human part of us is often so grief-stricken with shock from the death—especially an unexpected death—that pursuing claims and adhering to a statute of limitations (time limits to make a claim) are not only foreign concepts but may even be inconceivable.
But life goes on, and with it, so do the responsibilities of navigating the business aspects of a loved one’s life. With that in mind, nothing is more important than setting aside time to prepare services for the deceased, to grieve, to assist other family members, and to process what happened. The amount of time needed will differ according to the circumstances, but one should allow as much time as possible to process the effects of the death before starting an estate investigation and disposition.¹ Plus, it usually takes a few days before a death certificate is even available, and without it virtually nothing can be accomplished.
B. Locate the Death Certificate The first order of business is to obtain original death certificates for the deceased. The death certificate is the key document requested by most entities before speaking about or transacting estate-related business. Usually, the funeral provider will furnish as many death certificates as requested by the family. You should request multiple originals because most entities require, or at least prefer, an original.² The time it takes to get the certificate can depend upon the circumstances of the death.
C. Exercise Due Diligence Waiting can be difficult for some, while others take comfort in feeling like they cannot do anything. But it is important to combat that thought. When someone unexpectedly dies and does not leave a will, there is usually uncertainty going forward. It is important for family members or the appointed representative to begin investigating the deceased’s financial situation as quickly as possible. The mortgage payment, utility bills, and other related expenses of the deceased do not automatically stop after death. While sometimes overwhelming, one of the best ways to investigate is to go through the person’s most recent mail. One can also consult with family members and close friends who knew of the deceased’s business affairs. Often times, one can gather enough surface-level information from those two inquiries to begin making a list of which matters to tackle first.
As the deceased’s financial situation takes shape, one should begin contacting any providers or entities to advise them of the death and request any obligations be suspended or postponed until after an estate administrator is appointed. Taking this kind of initiative not only shows good faith, but it also communicates that the deceased’s obligations are important to their descendants. After all, with no will, and thus no executor automatically appointed, no legal action or administration can occur without court intervention and appointment. The sooner you act, the more likely you are to succeed in properly and efficiently addressing all of the obligations and potential claims of the deceased’s "estate." An estate is essentially all of the decedent’s property, possessions, money and valuables owned at the time of his or her death.
D. Secure Professional Advice (Lawyer/CPA) While waiting on the death certificate, and after conducting the initial investigation discussed above, the responsible person(s) should seek out a reputable probate attorney and a Certified Public Accountant ("CPA"). Most individuals are not familiar with the legal system’s complexities, so it is vital to secure services from professionals who will give sound advice regarding your circumstances. Hiring legal counsel is worth the cost because an attorney will not only provide guidance going forward, they are better equipped to appraise the situation objectively, without the emotional toll of a loved one’s death.
Once hired, an attorney will take inventory of the information gathered in your preliminary investigation and provide counsel to prioritize matters. Many of these decisions will be driven by the time in which estate claims must be filed—referred to as statutes of limitations—or the claims could be lost forever.³An attorney advocates for their clients, meaning he or she has a duty to keep their client’s best interest in mind, and seeks to handle all matters in the most efficient and effective manner.
A CPA is necessary if recommended by your attorney, or if the deceased’s financial situation is beyond your capability to manage. Regardless, if you are the individual whom the court will likely appoint as administrator, it is probably a good idea to hire a CPA anyway. This will ensure that financial matters commonly associated with probate, such as tax filing requirements and deadlines, are not overlooked. A CPA, like your attorney, will help you navigate estate disposition to ensure the estate is not paying unexpected charges. A CPA can also prevent undiscovered problems from cropping up later.
Hiring an attorney or a CPA provides much needed objective advice and direction. It also frees your time to pursue personal obligations and estate administration where your participation is critical. Not many people can drop everything in their lives to probate an estate, especially one without a will. Trying to handle life’s stressors, plus the deceased’s estate, is a tall-order and may interfere with the grieving process. This article does not delve into the grieving process, but it is recommended you consider professional help from a personal counselor as well.⁴
E. Communicate with Heirs Communication is key in human relationships, but the added stress of a loved one’s death can make family relationships and interactions even harder. Heirs are the survivors of a family member who dies without a will.⁵ Positive communication with the other heirs improves the healing and grieving process, but it is equally important to provide each other much needed information and assistance regarding the decedent’s estate. If you are the court-appointed administrator, you need to communicate every step you take on behalf of the deceased’s estate to the heirs. Not only does this let the other heirs know what is going on, but it can also avoid future conflict. Such conflicts are often avoidable if individuals clearly communicate their actions, feelings, and motivations. Death is a highly emotional event, and transparency with family is often critical to avoiding the potential pitfalls of a communication breakdown. Most individuals become more secure when they are involved in a stressful situation if they are included in the process. Finally, communication with heirs also opens the door for delegation, assistance, brainstorming, and emotional support.
II. The Probate Process
A. Filing the Probate Case Probate proceedings encompass a broad range of estate-related matters, including the administration, disposition, transaction, and facilitation of a decedent’s estate.⁶Claims can include decedent debts, taxes, liabilities, and the incidental expenses related to facilitating the disposition of the estate.⁷ A prudent and experienced attorney will know when and where to file estate claims based on a specific county’s court structure; the case will commence once the matter is filed in the appropriate court.⁸ Regardless of where the case is filed, the court exercising jurisdiction over the original probate matter will have authority over it, meaning the power to make orders about the estate, until the administrator is discharged or the estate is properly dispersed.⁹
If you hired an attorney as recommended, he or she will likely initiate a probate proceeding to appoint an estate administrator and determine the identity of any heirs.¹⁰ The attorney may submit an affidavit of heirship, and the court may subsequently approve a Judgment in Proceeding to Declare Heirship.¹¹ This proceeding establishes the identity of the living family members of the deceased who are entitled to a portion of the estate.
B. Appointing an Administrator and Letters of Administration Once the probate proceeding is initiated, the next phase includes appointing an administrator to handle the estate. An independent administrator is able to act on estate matters without the court’s supervision and without a subsequent hearing or further court intervention.¹² The heirs may agree on an independent administrator and may submit an application for independent administration, but the court will still require an heirship proceeding.¹³
The court will usually issue Letters of Administration at the same time. Letters of Administration are the primary document an administrator needs to sell, transfer, exchange, cancel, void, terminate, or initiate any action under authority of the court and for the decedent’s estate. In some instances, a party may not ask for the Letters of Administration upon a showing of intimate knowledge of the decedent and the business at hand. However, it is vital you obtain several digital and hard copies of the Letters of Administration from the county clerk and have them readily available to avoid unnecessary delays and problems when acting on behalf of the estate.
C. Administrator’s Duty The administrator has a duty to investigate, review, and process all estate-related matters.¹⁴ In short, they must chase down every lead they come across. If, as an administrator, you find yourself questioning something—you need to get the answer!
Administrators also have the authority and obligation to pursue—and at a minimum, at least review and present—all claims to or on behalf of the estate and its heirs.¹⁵ This process ensures the administrator has a general idea of the decedent’s financial affairs and can convey to a tax professional the estate’s income and liabilities.
Keep in mind that your tax professional cannot shield you from possible criminal liability if you fail to report accurate financial information to the IRS.¹⁶As previously discussed, an administrator is wise to secure CPA services early in the disposition process. An estate tax return must be filed upon disposition anyway, so having a CPA at your disposal for other matters is simply good stewardship.¹⁷ Finally, having all heirs present when administrators meet with attorneys or CPAs gives them an understanding of the factual findings of your investigation, and the legal implications of decisions made regarding potential claims for and against the estate. Plus, any questions and answers from the professionals are heard by all interested parties, which promotes informational unity. Once all heirs understand the implications of decisions made regarding the estate, the heirs can make informed decisions. It is important all heirs are informed, understand the situation holistically, and come to an agreement on how to proceed.
Conclusion While not an exhaustive inquiry into probate matters, this short article should provide you with a solid starting point for the difficult task of handling a loved one’s estate when they do not leave a will.
Sources ¹ Psychology Today, Bereavement, https://www.psychologytoday.com/us/conditions/bereavement (last visited Oct. 30, 2018). ² Tex. Dept. of Health Servs., Certified Copy of Death Certificate, https://dshs.texas.gov/vs/reqproc/deathcert.shtm (last visited Oct. 30, 2018). ³ Tex. Fam. Code Ann. § 9.003. ⁴ Id. at Bereavement, https://www.psychologytoday.com/us/conditions/bereavement (last visited Oct. 30, 2018). ⁵ Tex. Est. Code Ann. § 22.015. ⁶ Tex. Est. Code Ann. § 22.029. ⁷ Tex. Est. Code Ann. § 22.005. ⁸ Tex. Est. Code Ann. § 33.051. ⁹ Tex. Est. Code Ann. §§ 32.001, 33.054. ¹⁰ Tex. Est. Code. Ann. §§ 22.029, 31.001. ¹¹ Tex. Est. Code Ann. §§ 202.201, 202.202. ¹² Tex. Est. Code Ann. § 402.002. ¹³ Tex. Est. Code Ann. § 401.003. ¹⁴ Tex. Est. Code Ann. §§ 22.017, 22.031, 351.151; Burns v. Burns, 2 S.W.3d 339, 342 (Tex. App.—San Antonio, 1999, no pet.). ¹⁵ Tex. Est. Code Ann. §§ 351.151, 351.054. ¹⁶ 26 U.S.C. § 7206. ¹⁷ IRS, https://www.irs.gov/businesses/small-businesses-self-employed/deceased-taxpayers-filing-the-estate-income-tax-return-form-1041. (last visited Oct. 31, 2018).