Executive summary
- Texas Estate Code Chapter 308 covers the responsibility of executors to notify interested parties in an estate, including beneficiaries and creditors, about the probate process.
- Chapter 308 has important implications for both beneficiaries and creditors regarding their right to receive information about the probate process so that they have ample time to take action if necessary.
- Executors should familiarize themselves with this code so that they comply with legal requirements around notifying interested parties in the estate.
- Timely notice around probate is important for giving creditors and beneficiaries time to review a will and raise any respective debts or concerns in regard to the estate.
Introduction
Executors have a responsibility to communicate with any interested parties in an estate, including beneficiaries, creditors, legal heirs, and other parties in relation to an estate. Texas Estate Code Chapter 308 outlines this responsibility, highlighting key requirements executors must follow in order to provide adequate notice to all interested parties.
Executors must carefully follow this responsibility in order to ensure a smooth and timely probate process. Failing to comply with the Texas Estate Codes could lead to delays in estate administration as well as creditors or beneficiaries raising concerns about the process. Beneficiaries and creditors have a right to take legal action if they were not properly notified.
Whether you are an executor who needs guidance in understanding your probate administration responsibilities or a beneficiary questioning an executor’s actions, you should consult a probate and estate administration attorney for support.
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What is Texas Estates Code Chapter 308?
Texas Estates Code Chapter 308 is the portion of Texas law that discusses the required notice that the personal representative of a deceased person’s estate must provide to beneficiaries and creditors of the estate. The code outlines clear terms executors must follow in order to fulfill the requirements and provide adequate notice to all interested parties, including creditors and beneficiaries.
The code states that an executor must provide notice through a qualified delivery method, like certified mail, by a specified timeline and include important information about the estate. It specifies which parties are entitled to a notice and which may be exempt. Understanding this code is important for executors to ensure they are properly fulfilling their duties in their role.
Notice to beneficiaries under Chapter 308
Texas Estates Code Chapter 308.002 requires personal representatives to provide notice to every beneficiary that is named in the will 60 days after the date of an order admitting a will to probate. Under the code, a personal representative has an obligation to send a notice to every beneficiary for whose identity and address they have available—if they do not have this information readily available, they should demonstrate that they exercised reasonable diligence to obtain it, like asking other beneficiaries or contacting family members.
The required notice must include and explain the following details:
- The name and address of the beneficiary
- The identity of the individual who has passed away
- Acknowledgment that their will has been admitted to probate
- Acknowledgment that the recipient of the notice is named as a beneficiary in the will
- Either a copy of the will with the order admitting it to probate or a summary of the assets the beneficiary stands to inherit with basic information about the probate proceeding
An executor is also required to give notice to beneficiaries facing certain unique circumstances. For example, an executor must provide notice to a trustee and trust beneficiaries if the will distributes to a trust. If a beneficiary is under the age of 18, the executor must notify the parent or legal guardian. If the beneficiary is a charity that cannot be notified, the office of the Texas Attorney General should receive notice.
Instances where a notice to beneficiaries is not required
According to Texas Estate Code Chapter 308, there are some instances where a personal representative is not required to send a notice to certain beneficiaries. An executor is not required to send a notice to the following parties:
- Each beneficiary of a trust if the executor has already notified a close relative with a similar interest in a trust
- A beneficiary who has appeared at a legal proceeding regarding the will before it was formally approved
- A beneficiary who has already received all the gifts that they are entitled to within 60 days of the will’s approval
- A beneficiary who is entitled to a gift of $2,000 or less
- A beneficiary who has already received a copy of the will and waived their right to receive formal notice
It is an executor’s responsibility to ensure that they provide notice to all of the parties they are obliged to. If you are a personal representative of an estate and are uncertain about who to notify, it’s best to either consult an estate administration attorney or cover your bases by sending notifications to anyone you are unsure about.
Notice to creditors: Requirements and procedures
Additionally, the Texas Estates Code requires that executors notify estate creditors. Texas Estates Code Chapter 308.051 requires a personal representative of an estate to publish a notice in a newspaper of general circulation in the county where the deceased person lived within a month of being appointed. The notice must advise the estate’s creditors to present their claims and provide the person and address to which a claim may be presented.
Personal representatives must issue a separate notice to secured creditors directly and can provide notice to specific unsecured creditors if they choose to do so. A secured creditor is anyone who has a claim to a debt that is tied to a specific asset, like real estate, vehicles, vacation homes, or yachts.
Examples of secured creditors include:
- Mortgage lenders
- Car loan providers
- Banks that hold liens on assets
Meanwhile, an unsecured creditor is anyone who is owed debts that aren’t tied to specific assets. Examples of unsecured creditors are:
- Medical bills providers
- Credit card companies
- Lenders for personal loans
During probate, secured creditors receive priority over unsecured creditors. Secured creditors have a legal right to reclaim property if the debt remains unpaid, so executors often prioritize receiving and processing claims in order to protect estate property. Although executors are not required to notify unsecured creditors, it is a good idea to avoid any contests to the estate down the line and, on occasion, force creditors to relinquish their claims.
Importance of timely notice in probate
Delayed notice in probate can prevent interested parties from exercising their rights during probate, lead to conflict, and ultimately delay important aspects of the probate process. Failing to provide timely notice prevents interested parties in an estate from having a fair opportunity to understand their rights and monitor the executor’s administration of the estate.
Executors have monetary incentives for giving timely notice. For example, creditors may lose their opportunity to submit their claim to debts from an estate within their window, which leaves them at risk of not receiving compensation for their debts. Meanwhile, executors may avoid future disputes with adequately notified beneficiaries by building good will and transparency while respecting their fiduciary duties to keep beneficiaries informed. .
Creditors and beneficiaries also benefit from timely notice. Timely notice allows creditors to seek repayment from an estate before the estate’s assets are distributed. Beneficiaries who received timely notice will have the opportunity to ensure they receive their fair share of the estate or challenge the executor’s actions in court.
How long do creditors have to collect a debt from an estate?
The length of time that creditors have to collect a debt from an estate depends on the type of debt, whether the creditor received notice from the personal representative, and the type of estate administration. However, creditors cannot simply attempt to collect the debt from the estate. Rather, they either must present their claims to the personal representative or the clerk or file a lawsuit against the estate.
Secured creditors must present their claims within four months from the receipt of notice from the personal representative or six months from the date the personal representative’s letters are granted, whichever is later. If a secured creditor fails to present their claim by the deadline, they cannot receive money from the estate to cover the debt. However, the creditor can still have their claim satisfied by the property that was used to secure the debt.
If the personal representative sent notice to an unsecured creditor, they typically must present their claim before the 121st day after receiving the notice. However, if an unsecured creditor does not receive notice, they can present their claim at any time before the estate is closed as long as it is within the applicable statute of limitations.
During dependent administrations, creditors face additional hurdles to collecting on their claims. If the personal representative rejects the creditor’s claim, the creditor must file a lawsuit within 90 days. If the creditor fails to file suit, they risk losing their claim entirely.
Can I contest the executor paying a debt from an estate?
Yes, if you are an interested party in an estate, you can object to the executor paying a debt from the estate.
During dependent administrations under Texas Estates Code Section 355.054, a person who is interested in an estate may object to the approval of a claim or part of a claim at any time before the court has taken action on the claim. A hearing will be scheduled on the written objection, and the court will consider evidence from witnesses and issue a judgment as in an ordinary lawsuit.
Additionally, Texas Estates Code Section 355.058 allows a claimant or a person who is interested in an estate to appeal the court’s action on a claim to the court of appeals.
During independent administrations, executors often deal with estate creditors outside court. Accordingly, beneficiaries may not realize that they have the opportunity to contest the payment of a claim until after the executor pays the creditor’s claim. If a beneficiary is concerned that an executor may improperly pay an estate creditor, they should contact an estate dispute attorney as soon as possible.
Can executors sell property without beneficiaries approving?
Yes, executors can sell property without approval from the beneficiaries in many situations, especially during independent administrations. Proper notification to beneficiaries about the probate process gives them the opportunity to follow the steps in the process and stay up-to-date on estate transactions like property sales.
For instance, Texas Estates Code 356.051 requires, in certain circumstances, the personal representative of an estate to apply for a court order to sell all estate property that is liable to perish, waste, or deteriorate in value, or that will be an expense or disadvantage to the estate if kept.
Additionally, Texas Estates Code 356.101 allows the personal representative to apply for a court order to sell any of the estate’s personal property to pay for any of the following:
- Administration expenses
- Funeral and last illness medical expenses
- Allowances
- Claims against the estate.
Texas Estates Code 356.251 also allows the personal representative to apply for a court order to sell any of the estate’s real property to pay any of the above expenses, or if selling the property is considered in the estate’s best interest. However, unlike with personal property, if the personal representative files an application to sell real estate, they must provide a notice to each person who is interested in the estate, and they will have the opportunity to file a written opposition to the sale.
A probate estate litigation attorney will be able to help beneficiaries identify whether they are entitled to receive notice of the executor’s sale of estate assets and offer guidance in this process.
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Can executors contest a decedent’s debts or estate debts?
Yes, executors can contest creditor claims that are submitted to the estate.
During dependent administrations under Texas Estates Code 355.051, a personal representative has 30 days from when an authenticated claim against the estate is presented to allow the claim, reject the claim, or allow part of the claim and reject the remaining portion. If a personal representative does not respond within this time frame, the claim is considered to be rejected.
If a claim is rejected in a dependent administration, the creditor must file suit against the estate within 90 days of the rejection in order to recover the debt. The probate court will then determine if the claim is valid. You should contact an experienced probate litigation attorney as soon as you suspect estate funds may be misused or misappropriated.
Conversely, during independent administrations, the 90-day window does not apply, and a creditor must file a suit within the normal statute of limitations for that claim. Instead, creditors who properly present their claims typically must file suit on those claims while the estate is still open or before the normal statute of limitations runs out, whichever is shorter.
Understand your rights and responsibilities under Texas Estate Code 308
Texas Estate Code Chapter 308 lays out the requirements for executors to provide notice to beneficiaries about the beginning of the probate process. Whether you are a creditor or a beneficiary to an estate, it’s important to understand your rights to timely notice so that you can exercise them and understand any entitlements to estate assets. If you’re an executor, it’s important to familiarize yourself with this code so that you can take any necessary steps to meet these requirements and fulfill your duties as an estate administrator.
If you have questions, you should seek the support of an attorney. Our Texas probate and estate administration attorneys at RMO Lawyers have a deep understanding of Texas probate codes and have handled countless probate cases. Whether you have questions about the process or concerns about how your loved one’s estate has been handled, we can help. With decades of experience, we’ll review your case and build a winning strategy to secure your inheritance and preserve the wishes of your loved one.
Schedule a consultation with our attorneys to learn more about your rights during probate in Texas and how to exercise them.