Grounds for Contesting

Standing

A person must have a legal interest in a case in order to contest a will. This concept is called standing. It essentially means that the person bringing the challenge has some sort of stake in the outcome of the contest. For example, a beneficiary has standing to contest a will he or she is named in. On the other hand, the beneficiary’s friend at work would not. Without the rule of standing, any person on the planet could contest any other person’s will.

Valid Reason

1. Fraud

Wills must be created without deceit. If not, then the terms are invalid. Cases of fraud and deception may affect the entire will or only certain provisions.

2. Diminished Capacity

A will may be challenged successfully if it can be shown that the deceased did not have the requisite mental capacity to make and sign a will at the time it was formalized. Diminished capacity may have a number of different causes:

• Drugs/Alcohol

• Infirmity/Illness

• Brain Trauma

3. Duress

Also known as undue influence, it occurs when the is pressured into drawing up the will in a certain fashion. The pressure being exerted must be some sort of illegal action, such as a threat.

4. Forged or Improper Documents

The paperwork may be forged or may be insufficient. Depending on which part of the will is lacking, a judge may order the entire will thrown or or simply opt to remove certain provisions or sections.

Time Limit

There is a statue of limitations that requires a person to contest a will within two years of it being entered into probate. After this time period elapses, it becomes difficult, if not impossible to challenge a will. That being said, Texas law does allow post statute of limitation challenges in a few specific instances:

Fraud or Forgery

If either are discovered, a person then has two years after the discovery to contest the will.

Incapacitation – Capacitance

In some cases, incapacitated persons may regain their capacity and faculties; in which case they may contest their wills if not in accordance with their wishes. There is also a two year time limit governing this provision. Once the the cause for challenge has been discovered, it must be brought within two years of the discovery.

In a legal sense, your estate refers to assets and those things which you hold right, entitlement and interest in. It includes all real and personal property owned at the time of death. Your estate may be taxed when these assets are transferred at the time of your death.

Fair Market Value

The IRS refers to the sum of these items as your “gross estate” and assigns them a market value that is based on what any item may currently sell for on the open market between a willing buyer and seller.

In other words, the valuation of your assets will not necessarily be affected by what you paid for them, or what their initial cost basis was when they were acquired. Your gross estate will include all liquid assets, as well as investment accounts, real estate, insurance policies with cash value, trust funds and any interest you may have in a business.

What can be deducted?

Once the gross estate has been determined, then you will be allowed to deduct certain expenditures to arrive at a “taxable estate” figure.

Typical deductions that can be exempted from the estate tax include all costs associated with the funeral expenses, outstanding debts that are owed to creditors by the decedent at the time of death, as well as the value of assets that are passed on to any surviving spouse, and certain qualified charities.

Threshold for Estate Tax

Once the taxable estate figures are concluded, then the value of any lifetime gifts to the estate, gifted from 1977 forward, are added in. Under current regulations, the estate tax does not kick in unless the total taxable estate figures plus the lifetime gifts exceed $1,000,000.

Do I need to file an Estate Tax return?

A relatively simple conclusion to a decedent’s estate likely will not require the filing of Form 1041, U.S. Income Tax Return for Estates and Trusts. If the Estate continues to generate income, then the fiduciary must file an annual 1041 if the gross income for the tax year exceeds $600. These earnings will be subject to normal tax bracketing.

If a return needs to be filed, it is due nine months after the date of the taxpayer’s death. A six month extension is available. As with any extension to file, the IRS will require an estimation of any potential tax due to be paid in by the original due date.

Do I Need an Estate Tax Lawyer?

Representation may be desired, depending on the complexity of the estate. If an estate’s assets have topped the 1 million threshold, because of the intricacies of the existing assets, it likely is a good idea to secure a lawyer familiar with how to handle these assets.

In some cases, it may not be necessary to send a will through the probate process. While probate is the legal method of processing a will and its estate, it is not always the most efficient method of handling an estate. Understanding the alternatives to probate begins with understand just what probate is.

As a general rule, the probate process will perform several key functions on behalf of an estate and its heirs. These include:

• Providing proof to the court that the will provided is valid and belongs to the deceased and their estate
• Completing an accurate inventory of the assets owned by the deceased at the time of their death
• Engaging professionals to accurately appraise the value of real estate and other assets
• Repay any outstanding debts or taxes owed by the deceased or the estate
• Properly distributing the remaining assets of the estates to the legal beneficiary or heirs according to the terms of the will

In order to avoid probate, one of several options, or a combination, must be chosen and completed.

• Payable on Death: Also known as Transfer on Death Accounts, Payable on Death simply allows the deceased to set up, prior to death, a direct transfer of items such as investment or bank accounts directly to their chosen heir upon their death. These assets will not be subjected to the probate process. Other examples include 401K accounts, IRA’s and sometimes brokerage accounts.
• Joint Accounts: By setting up bank and investment accounts as ‘joint’ and ensuring that they have the designation “with right of survivorship,” the account automatically transfers to the survivor upon death of the other account holder. This process is simple and only requires a certified death certificate be shown to the bank or financial institution
• Joint Property: Much like joint accounts, by co-owning property, it is often possible to avoid probate. The determining factor is how the property in question is title. It is critical the property be designated as ”Owning Joint Property with Right of Survivorship.”
• Revocable Living Trust: A revocable living trust is a writing agreement that forms a trust that is then funded by the assets of the estate. The deceased, upon setting up the trust, becomes the ‘trust maker.” They can deposit assets into the trust as well as invest it. Upon their death, the trust passes to their heirs as a ‘living’ trust. The new trustee will have access to the trust and be able to use it as they see fit within the confines of the trust itself.
• Gifting: Assets or property that are ‘gifted’ prior to death do not need to be probated.
• Small Estates: Estates with a monetary value of less that $100,000 can typically be handled without the probate process

Each of these alternatives works in specific cases. Consult a qualified probate attorney to determine which is ideal for your particular estate and needs.

2) A County Clerk issues a citation and a notice is posted at the courthouse that an Application for Probate of Will has been received. After notice has been posted for the requisite time the Probate Attorney will request a hearing.

3) At the hearing the Probate Lawyer will prove up the facts of death. If the will is self-proven, being signed and notarized by witnesses, only the executor will be required to testify. If the will is not self-proven, a witness to the signing of the will must testify at the hearing.

4) After the judge approves the Application for Probate of Will, the executor a takes the Oath of Executor and the Letters Testamentary are requested. Letters Testamentary are the legal documents allowing the executor to act on behalf of the estate.

5) Within 30 days the Probate Attorney will publish with the local newspaper a notice to creditors. The Probate Lawyer will also within 60 days give send notice to creditors that Letters Testamentary have been issued. If the Probate Lawyer receives a claim by a creditor the executor must either reject or accept it within 30 days.

6) Within 60 days a letter drafted by the Probate Lawyer is delivered to the beneficiaries. The executor through the Probate Attorney will then file a sworn affidavit swearing the beneficiaries under the Will have been notified.

7) Within 90 days the Probate Lawyer with guidance from the executor will prepare an Inventory, Appraisement and List of Claims that lists the assets of and claims against the estate.

With assistance from the Probate Attorney the executor disburses the estate as provided for in the will. Subsequently, proper notices are filed in the Deed Records for real estate and new titles are filed for cars, boats and other titled property.

To speak to an attorney about your matter, please call us now at 512-322-5367.

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Below is our estimates for legal fees. Of course, every situation is independently unique and actual legal fees could be dramatically increased including but not limited to situations where there are contests to the Will or there is a complex estate involved. The estimates below do not include fees charged by the Courts which typically range from $200 to $250.

PROBATE OF ESTATES WITH A WILL IN TEXAS

Probate of Will as Muniment of Title ($1,200-$1,500)

Estates may qualify for this less expensive procedure if there is a properly drafted will and the estate has no debts other than mortgages on real estate.

Independent Administration ($1,500-$2,200)

If there are existing debts the Will most likely be probated as an Independent Administration.

PROBATE OF ESTATES WITHOUT A WILL IN TEXAS

Heirship Proceeding (Minimum of $3,000)

If the estate is worth more than $50,000 (not including the homestead and certain non-probate assets), it may be necessary for a judge to determine who the heirs are. The judge may appoint an “attorney ad litem” to represent the interests of potential or “unknown” heirs. Legal fees are at a minimum of $3,000 but can be much more. The exact cost depends on the number of heirs and the complexity of the estate, but is generally more expensive than probating a will. Furthermore, if property passes to minor children, it may be necessary to establish a guardianship, which can be very costly.

PROBATE OF SMALL ESTATES IN TEXAS

Small Estate Affidavit ($500-$1,000) If the estate is worth less than $50,000 (not including the homestead and certain non-probate assets), the estate may qualify for this procedure. The cost depends on the number of heirs and the difficulty in reaching them, but is generally much less expensive than an heirship proceeding. However, if property passes to minor children, it may be necessary to establish a guardianship, which can be very costly.

To speak to an attorney about your matter, please call us now at 512-322-5367.