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90 Cards in this Set

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Estates: Define "probate".
The proceeding in which an instrument is judicially determined to be the duly executed last will of the decedent (or, if there is no will, the proceeding in which the decedent's heirs are judicially determined.)
Estates: What is an executor? An administrator?
1. Personal representative if named in the will.
2. Personal representative if named by the court.
Estates: What evidences the power of an executor to carry out the estate administration? An administrator?
1. Letters testamentary.
2. Letters of administration.
Estates: What is one of the chief fucntions of the probate process?
The title-clearing function by which the ownership rights of the decedent's successors are judicially established.
Estates: Who has concurrent probate jurisdiction pursuant to the Texas Constitution? What happens if a county has statutory probate courts or county courts at law?
1. County and district courts.
2. Those courts have exclusive original jurisidiction.
Estates: If a county does not have a statutory probate court or statutory county court at law, what matters are handled by the county court? The district court?
1. Uncontested matters.
2. Contested matters.
Estates: Where is venue proper for a Texas resident? Non-Texas resident who dies in Texas? Non-resident who dies outside of Texas?
1. The county of domicile.
2. County where prinicipal assets were situated or where he died.
3. County where nearest kin resides, if no kin, county of principal assets.
Estates: For what reasons would a probate judge appoint a guardian ad litem?
To represent the interests of persons under a legal disablility, nonresidents, unborn or unascertained persons, or unknown heirs.
Estates: What is the limit for admitting a will to probate? Exception?
1. 4 years after testator's death.
2. Waived if shown that applicant was not in default for failing to present will within the four-year period.
Estates: What happens if a will is offered for probate more than four years after the decedent's death?
1. Notice must be given to the heirs.
2. Letters testamentary cannot be issue and no estate administration can be held.
3. Will can be probated only as a muniment of title.
4. GFP from the heirs will have good title against devisees named in the will.
Estates: What is a muniment of title?
A document, or other evidence, that proves ownership of an asset.
Estates: What is a devisee/legatee?
Any individual or organization bequeathed any portion of a testator's estate.
Estates: After a will has been admitted to probate, what does the person designated as independent executor do?
Files with the court an inventory of estate assets, an appraisement of their value, and a list of claims of the estate.
Estates: What does the executor do after filing with the court?
Administers the estate, paying or disallowing creditors' claims, and distributing the net estate to those entitled, without any court involvement or supervision.
Estates: What powers are customarily granted to an independent executor?
All the powers of a trustee. May sue or be sued, pay or deny claims, set aside family allowance and exempt property, operate a business that is part of the estate, and make a distribution of assets.
Estates: What may an executor do if a will contains a power of sale? If there is no power of sale?
1. Sell real property irrespective of the existence of estate debts.
2. Property may be sold to pay debts and expenses and to satisfy the family allowance or other statutory allowances.
Estates: What will not suffice when designating an independent executor in a will?
Merely naming a person as executor and waiving bond, without more.
Estates: When is independent administration permitted?
1. If all distributees agree to an independent administration and,
2. The Court finds that it is in the best interest of the estate.
Estates: Who may sign an application for an independent administration for a minor or incapacitated distributee?
A guardian.
Estates: How may a testator prevent the appointment of an independent administratoin?
Provide in the will that there will be no independent administration.
Estates: When do rules governing dependent administration apply?
1. ONLY when the decedent did not leave a will naming an independent executor, and either:
2. Distributees cannot agree that there should be an independent administration, OR
3. The probate judge finds that such an administratoin would not be in the best interest of the estate.
Estates: If all beneficiaries agree to an independent administration, may the court still refuse to grant such?
Yes, if it determines that it is not in the estate's best interest.
Estates: If a person declines appointment as an independent executor, may they still be appointed administrator?
Yes.
Estates: For what reasons may a court remove an independent executor?
1. Fails to return an inventory and list of claims w/in 90 days after qualification.
2. Misapplied or embezzled estate property.
3. Fails to make a required accounting.
4. Fails to give notice to charitable beneficiaries w/in 30 days after the will is admitted to probate.
5. Guilty of gross misconduct or gross mismanagement.
6. Becomes incapacitated or is sentenced to a penitentiary.
Estates: How often may an interested pary demand an accounting from an independent executor?
After 15 months from the date the will was admitted to probate, and thereafter, every 12 months.
Estates: For what reasons may an independent executor be disqualified?
1. Has interest adverse to the estate (but courts give great deference to testator's intent)
2. Reluctance of an executor to pursue effective administration of the estate.
Estates: What does the (not required) closing report, verified by affidavit, show?
1. Property that came into executor's hands.
2. All debts have been paid.
3. No litigation is pending.
4. Names and addresses of the persons to whom the estate property was distributed.
Estates: What may an independent executor file for after the estate has been administered?
A declaratory judgment seeking discharge from liability for matters that have been fully disclosed.
Estates: When may an interested party petition for distribution?
Two years after an independent executor is appointed. A hearing will be held on whether administration should continue.
Estates: What portion of the community property is subject to administration on the death of one spouse?
All, not just the deceased spouse's one-half share.
Estates: If an intestate decedent is not survived by descendants, or if all descendants were also descendants of the surviving spouse, what happens?
The surviving spouse succeeds to all community property and no administration is necessary. Surviving spouse may need to go through a statutory heirship proceeding.
Estates: When one spouse has died and no administration is pending, what may the surviving spouse do?
Act on behalf of the community estate. All actions must be for the purpose of paying debts, and the power terminates when the debts are paid.
Estates: If a surviving spouse, not named executor, does not want an independent executor to administer all of the community property, what may the executor adminster?
1. SP of the deceased spouse.
2. CP under sole management of deceased spouse.
3. CP under joint management of the spouses.
Estates: When is no administration actually necessary?
When the estate is reasonably small and uncomplicated (less than two debts) and family members appear to have harmonious relationship.
Estates: If a decedent does not leave a will naming an executor, what is necessary before letters of administration will be issued?
An affirmative showing that an administration of the estate is needed.
Estates: When is administration required?
1. There are 2 or more debts against the estate.
2. A judicial partition is desired.
3. Funds or other property due the estate must be recovered.
Estates: To whom does legal title pass upon death of a person, whether testate or intestate?
Immediately to the legatees or heirs, subject to the personal representative's right of possession in the event that an administration is necessary.
Estates: How may administration be avoided even if the assets call for administration?
If all persons interested in the estate sign an agreement as to how the property will be distributed. Executor is not an interested person. All must be over 18.
Estates: What does the court do if it finds there is no need for an administration? Who does this protect?
1. Will recite in order refusing application that no necessity for administration exists.
2. Estate debtors, transfer agents, and creditors who act in reliance on the order.
Estates: What must be done before the court can enter a muniment of title order?
There must be no unpaid debts owed by the estate.
Estates: What is the effect of a will as muniment of title?
It establishes the ownership rights of the named beneficiaries and they may treat the property as their own.
Estates: What must be done when land is in several counties?
Certified copy of will and order admitting it to probate must be filed in each county where will was not admitted to probate.
Estates: When must an affidavit be filed certifying the terms of the will that have been fulfilled and those yet to be carried out?
Within 180 days of the order admitting the will to probate.
Estates: What does the court do when the beneficiaries cannot be ascertained solely by reference to the will or the will raises questions of construction?
The court may hear evidence and include in the order a declaratory judgment consruing the will and determining the interests of the beneficiaries.
Estates: What does a statutory heirship proceeding establish?
1. The person is dead.
2. He left no will.
3. He was survived by the named persons as heirs.
4. Fixes the amount of their intestate shares.
5. Completely protects BFPs who deal with leagatees under the will.
Estates: What may an heir whose name was not included in an affidavit of heirship do?
Bring suit against the other heirs.
Estates: How does a nonstatutory affidavit of heirship work?
It is an informal procedure to clear title to a decedent's heirs. Title is established to the satisfaction of a title insurance company through affidavits of people familiar with the family.
Estates: If the value of the estate is less than $50K (not including homestead and exempt personal property), what are the heirs of an intestate estate entitled to? What must they do?
1. Distribution without need for appointment of personal rep or administration.
2. File an affidavit with the court showing the basis upon which they are entitle to distribution.
Estates: If a homestead is the only real property owned by a decedent, how may title be transfered?
Under a small estate administration affidavit, which must be recorded. Purchasers who rely on it are protected against undisclosed heirs.
Estates: If the value of the estate, excluding homestead and exempt personal property, does not exceed the family allowance, what can be done?
Application can be made for the setting aside of a family allowance and an order that no administration is necessary.
Estates: How can the surviving spouse collect the decedent's last paycheck?
By giving the employer an affidavit stating that no one has been appointed executor or administrator of the estate.
Estates: What happens if the decedent owns land outside of Texas?
Must bring proceedings for that land in the state where it is. Texas cannot enter such a decree.
Estates: What are the four steps at each stage in the process of dependent administration
1. Petition.
2. Notice to interested parties.
3. Hearing.
4. Subsequent judicial confirmation.
Estates: What are the procedural steps for sale of real property? (dependant administration)
1. Application for sale is filed showing need to sell property.
2. Date for hearing is set and notice given.
3. Hearing held.
4. Property sold.
5. Court affirms the sale.
6. Rep gives deed to purchaser.
Estates: How long may an appointment as a temporary adminstrator last?
180 days, unless made permanent before time is up.
Estates: When can an unsecured creditor assert its claim? Is the statute tolled when the obligor dies?
1. At any time within the SoL applicable to that claim.
2. Yes, 12 months or until the appointment of a personal representative.
Estates: How must a personal representative give notice to unsecured creditors?
Within one month after appointment; by publication in a newspaper of general circulation. Notice must contain representative's name, address, and date letters issued.
Estates: What may a peronal rep do with unsecured creditors for claims of money before the estate administration is closed?
1. Send notice CRR expressly stating that if the claim is not presented within four months, the claim will be barred.
Estates: If a personal representative rejects a claim or fails to act within 30 days, what must the creditor do?
File suit within 90 days, otherwise the claim is barred.
Estates: What sort of notice must be given to secured creditors?
Notice by CRR mail to all secured creditors known to the personal representative, within 2 months.
Estates: When may a secured creditor elect to present its claim for payment as a matured secured claim?
1. Within six months after appointment of the personal rep.
2. Within 4 months after personal notice is received. (Whichever is later)
Estates: If an encumbered property that has a matured secured claim is sold, to what is the secured creditor entitled?
1. A Class 3 claim, which gives priority over the sale proceeds except for funeral and last sickness expenses, family allowance, and administration expenses.
2. If not sufficient, can get deficiency judgment and collect as Class 8 unsecured claim.
Estates: IF a will is executed on or after September 1, 2005, who bears the burden of paying the matured second claim? Before?
1. The beneficiary of the encumbered property.
2. The residuary legatees.
Estates: May a secured creditor elect to present its claim as a "preferred debt and lien", instead of a matured second claim? What happens? Why would it want to do this?
1. Yes.
2. Debt is paid according to the terms of the note. Right is waived to collect debt from decedent's personal estate.
3. Proceeds from foreclosure all go to sec. creditor. Best choice if estate is insolvent.
Estates: What happens if a secured creditor does not formally present its claim as a matured secured claim within 6 months?
Automatically classified as preferred debt and lien.
Estates: May the estate administrator pay off a secured creditor?
Yes, and no prepayment penalty is allowed.
Estates: What is the required authentication for a claim under a dependent administration?
Must be accompanied by exhibits and vouchers, and supported by an affidavit.
Estates: Against whom must an action against estate be filed for a dependant administration?
The estate's personal representative, if none, against the heirs or beneficiaries.
Estates: What is the major difference between dependent and independent administrations for secured creditors?
Dependent - creditor cannot foreclose on the lien without court approval, regardless of whether the debt is in default.
Estates: What is the priority of claims?
1. Funeral and last sickness, up to $15K.
2. Family allowance.
3. Expenses of administration.
4. Secured claims if property sold.
5. Unpaid child support & child support arrearages reduced to judgment.
6. State taxes.
7. Costs of decedent's confinement in prison.
8. Claims by state for reimbursement of med. assist. programs.
9. All other claims.
Estates: What is the statutory priority as to who is to be appointed personal representative?
1. Executor named in will.
2. Surviving spouse.
3. Principal named beneficiary.
4. Any other named beneficiary.
5. Next of kin in nearest order of descent.
6. Creditor of decedent.
7. Any other person of good character.
Estates: What is the only restriction in appointing a temporary administrator?
Must be a suitable person. No order of priorities.
Estates: Who is disqualified from being appointed as a personal representative?
1. Minors
2. Incapacitated persons.
3. Convicted felons.
4. Nonresident banks.
5. Any person the court finds unsuitable.
Estates: May nonresidents of Texas serve as the administrator?
Yes, but must appoint resident agent for service of process.
Estates: To whom must the executor give notice after the will is admitted to probate? When?
1. All named beneficiaries who have not received a copy of the will or appeared in a probate proceeding.
2. Within 60 days.
Estates: What must the executor do within 90 days after the will is admitted to probate? When? What happens if he fails to do so, or to give proper notice?
1. Must file affidavit or certificate that required notices have been given.
2. 90 days
3. May be removed upon the petition of any interested person.
Estates: What must the personal representative do after qualification, with the assets?
1. Collect all estate assets so that they may be properly managed.
2. File an inventory and list of claims with the court within 90 days (exentsion available)
3. May also be required to file an appraisement.
Estates: What is the next major activity for an insolvent estate after collecting assets?
Setting aside homestead, family allowance, and exempt personal property.
Estates: After assets (and setting aside if insolvent), what must be done?
Pay debts, taxes, and administration expenses.
Estates: What power does the personal representative have over the estate property? What limitation?
1. Power to manage the estate property.
2. Must file annual accountings.
Estates: After paying the taxes, what is the last step?
Distribute the remaining property to the heirs or will beneficiaries.
Estates: Without a contrary will provision, to what is the personal representative entitled to?
1. 5% of all amounts paid and 5% of all amounts actually received by the perosnal representative on behalf of the estate.
3. Total may not exceed 5% of the gross value of the estate.
Estates: To what does the 5% rule not apply?
1. Cash on hand at decedent's death.
2. Life insurance proceeds.
3. Distributions to legatees or heirs.
Estates: What status does the executor have to the estate? Under what circumstances may the executor purchase property from the estate?
1. Fiduciary (rules against self-dealing.)
2. If authorized by the will or court determines it is in best interests of the estate.
Estates: What are the five consequences of the homestead exemption?
1. Freedom from creditors claims during lifetime.
2. Spouses must join in conveyance of homestead
3. Passes free of claims at death
4. Surviving spouse or minor children are entitled to occupy homestead rent free as long as so chooses; cannot be partitioned during this time
5. Partially exempt from local property taxes
Estates: What is required for a homestead to be free of creditor claims at death?
The decedent must be survived by a spouse, minor child, or unmarried adult child residing with the family.
Estates: What are the six claims that still count on a homestead?
1. Purchase money liens.
2. Taxes on property.
3. Mechanics and materialman's liens
4. Federal tax liens.
5. Lien to pay off federal tax or divide homestead on divorce.
6. Second lien.
Estates: What is the allowance in lieu of homestead? In lieu of exempt personal property?
1. $15K
2. $5K
Estates: What allowance is the surviving spouse and minor child entitled to? What must they show?
1. Allowance sufficient for their maintenance for one year.
2. Show that they have inadequate property for their support.
Estates: Why is an argument that due to the substantial size of the community estate, the surviving spouse is not entited to a family allowance, a losing argument?
Because the spouse's one-half interest in CP is not taken into account when determining the amount of the family allowance.