An executor is an individual who pays the debts and distributes property that a deceased person left in their will to their beneficiaries. A named beneficiary is an individual such as a loved one or family member who receives property under the terms of the will. An executor differs from an estate administrator in that the will nominates an executor, and the probate court appoints an administrator.
Both an executor and an administrator are classified as personal representatives. They must act in good faith and in the best interests of the beneficiaries. An executor or administrator is entitled to 5 percent of all amounts that they receive or pay out in cash for managing the estate.
Loyalty, Prudence and Preserving Assets
An executor must fulfill three duties to beneficiaries: the duty of loyalty, the duty of prudence and the duty to preserve assets. The duty of loyalty involves taking actions for the benefit of the beneficiaries. An executor is not allowed to share information about the estate with unauthorized parties or favor their own interests over those of the beneficiaries.
The duty of prudence involves exercising care and prudence to deal with the assets of the estate. The duty to preserve assets involves taking care to protect the estate’s assets, which may mean purchasing insurance for certain types of property, like a home or real estate.
Checklists and Actions for Executors
An executor must disclose to the beneficiaries what actions they are taking regarding the estate and why they are taking such actions. An executor is not required to develop their own checklist to engage in administration. A county court may require an executor to follow the court's checklist for a dependent or independent administration of the estate.
The first step of the probate process is for the executor to file an application for probate in the county where the decedent, the person who passed, lived when they died. The executor must also file the death certificate and the original will and authorization of letters testamentary with the court. Then an independent executor must file their oath with the court. An executor must give notice to the estate's beneficiaries within 60 days that a will is being probated.
Administration of the Estate
Administration is defined as managing the estate through the process of probate. It is the goal of the court that an estate be disposed of within two years of its creation.
Texas has two types of administration, dependent administration and independent administration. The difference between the processes of administration determines what actions the executor will take. The difference also determines the extent to which the probate court will be involved.
Dependent administration requires that the executor get the court’s approval for most actions. The executor must explain to the probate judge what they are doing on a regular and continual basis. Dependent administration is the right choice when the beneficiaries are in conflict about what the executor should do.
Pros and Cons of Dependent Administration
Dependent administration is helpful when court oversight is necessary during the probate process. For example, when an estate must pay off many debts, the beneficiaries should keep close track of the executor’s actions. This type of administration requires more time and money than independent administration.
The court must give its approval for the executor to sell the testator's assets and pay debts. Texas courts typically require that an executor in a dependent administration hire an attorney.
More About Independent Administration
In an independent administration, the executor carries out their duties without reporting to the court. Texas Estates Code typically refers to an executor in an independent administration as an independent executor.
A court may grant an independent administration if the person who died named an executor in their will. The court may also grant this type of administration if all the beneficiaries agree that there should be an independent executor and also agree on the identity of that person. Texas courts typically require that an executor in an independent administration hire an attorney.
Steps of a Dependent Administration
An executor in a dependent administration should review the guide to dependent administration for the county in which they filed the probate case. Steps may differ between counties. In Tarrant County, Texas, home to Arlington and Lake Worth, the process of administration begins with the executor hiring an attorney. The attorney’s fees are paid from the estate and must be approved by the executor and ordered paid by the court.
The next steps for a dependent executor are generally outlined below:
- Within 20 days of receiving the order of appointment, file the oath and a bond in an amount set by the judge. The judge must approve the bond. After these two steps have been completed, the executor is qualified.
- After qualification, obtain a federal tax identification number (EIN) from the IRS.
- Close all accounts in the decedent’s name. Consolidate them into the estate account. Place income and sales proceeds into this account.
- Complete a change of address form at the post office to have all of the decedent’s mail forwarded to the executor’s address. Complete a forwarding order for every possible address where the decedent received mail.
- Within one month of qualification, publish a notice to creditors in the county.
- Within two months of qualification, send specific notices to secured creditors by certified mail, return receipt requested, to all creditors known to have a claim for money against the estate that is secured by real or personal property of the estate.
- Within 90 days of qualification, file an inventory, appraisal, and a list of claims to be approved by the court.
- If the executor needs to spend funds to maintain estate property, file an application for ongoing expenses with the court and wait until it is approved.
- Do not pay claims against the estate unless a court order specifically authorizes such payment.
- File IRS tax returns of the decedent and the estate prior to any distributions.
- Obtain authority from the court before selling any estate property.
- Within 60 days of the anniversary date of qualification, file an annual accounting to show the court income received and expenses for the year.
- After the court approves the inventory, the executor can make an application for partial distribution of the estate. Within 12 months, the executor may file an application for full distribution of the estate.
- File a final accounting.
- File an application to close and release the bond.
- Close the estate.
Steps of an Independent Administration
In an independent administration, the first step is for the will to be filed for probate. The Tarrant County Court recommends that an independent executor take the following steps in the order provided:
- Within 20 days of the court signing an order to admit the will to probate and appoint the independent executor, sign an oath signed and sworn to in court or before a notary.
- File a bond. The judge must approve the bond.
- File an appointment of resident agent if the independent executor does not live in Texas. The date that the court approves the last of these three required documents is the qualification date.
- Within one month of the qualification date, publish a notice to creditors in a newspaper in the county in which the probate case was filed. This notice must contain the qualification date, the address to which claims should be presented and an instruction that claims be addressed in care of the executor, attorney or the representative.
- File a copy of the printed notice to creditors with the county clerk.
- Within two months of the qualification date, give notice by certified mail, return receipt requested, to all creditors known to have a claim for money against the estate secured by real or personal property of the estate.
- File proof of service of the above notice with the clerk.
- At any time before the estate is closed, give notice by certified mail, return receipt requested, to an unsecured creditor having a claim for money against the estate. The notice should expressly state that the creditor must present a claim within four months after the date of the receipt of the notice or the claim is barred.
- Within 60 days of the date of the order admitting the will to probate, notify by certified mail, return receipt requested, all persons and entities named as beneficiaries in the will.
- Within 90 days of the date of the order admitting the will to probate, sign and file a sworn affidavit or certificate signed by the attorney that states the name and address of each beneficiary notified of the probate by certified mail, the name and address of each beneficiary who filed a waiver of the notice, the name of each beneficiary whose identity or address could not be ascertained despite the independent executor’s exercise of reasonable diligence, and any other information necessary to explain an inability to give the notice to or for any beneficiary.
- Within 90 days of qualification date, file a sworn inventory, appraisal and list of claims of the estate. The inventory must be prepared and signed by the independent executor’s attorney.
- The inventory must list all personal property of the estate wherever it is located with cash and investment account descriptions.
- Collect all personal property, record books and title papers of the estate.
- Sell assets and settle claims against the estate.
- Consult an attorney as to whether it is necessary to file tax returns.
- Distribute the remaining assets to the beneficiaries.
- File an application to close and release the bond.
- Close the estate.
An independent executor is allowed to take all actions necessary to manage the estate. They may pay creditors’ claims, continue to operate a business that is part of the estate, sue on behalf of the estate or be sued on behalf of the estate. An independent executor may pay for the estate’s debts by entering into mineral and ground leases, selling real and personal property and borrowing money on behalf of the estate. To wind up management, an independent executor should make a complete and final distribution of the assets to the beneficiaries.
Using a Small Estate Affidavit to Probate Assets
A small estate affidavit (SEA) is one way to probate an estate in the state of Texas. In order for an SEA to be used to transfer property, the decedent must have died without a will. The decedent must have left less than $75,000 in property, not including homestead property and exempt property.
Homestead property is the place where the deceased lived and owned property. Exempt property includes up to $100,000 for a family or $50,000 for a single adult of home furnishings, tools and equipment, clothes, a limited amount of jewelry, two firearms and the pension benefits and IRAs of the person who passed. A beneficiary should consult a lawyer to see if certain items of personal property are exempt.
For an SEA to be used under Texas law, the assets in the estate must be worth more than the debts. The mortgages and debts secured by exempt property should not be considered debts. A homestead and exempt property should not be considered assets. An SEA does not require probate administration or a personal representative such as an executor.
- Texas Estates Code: Chapter 22, Definitions
- Texas State Law Library: Probate
- Texas Law Help.org: Estate Administration in Texas
- Texas Estates Code: Section 352.002, Standard Compensation
- TexasLawHelp.org: Small Estate Affidavits
- Tarrant County, Texas: Guide for Dependent Administrator in Tarrant County Probate Court Two
- Tarrant County, Texas: Guide for an Independent Executor in Tarrant County Probate Court Two
Jessica Zimmer is a journalist and attorney based in northern California. She has practiced in a wide variety of fields, including criminal defense, property law, immigration, employment law, and family law.