Texas estates come in all shapes and sizes. Some are large, involving thousands perhaps millions of dollars in assets, some are small, comprising only a few thousand dollars in assets. Some estates consist entirely of cash and stocks and bonds, while others include mostly real property. And most estates have debts left by the decedent that must be paid from estate assets. In essence, estate administration in Texas involves the collection of the decedent’s assets, payment of debts and distribution of the remainder of the estate to the decedent’s heir and other beneficiaries.
Every estate except those will assets of less than $50,000 must be administered by an individual appointed either by the testator in his or her will or by the court if the decedent left no will. The administrator must take an oath to faithfully and accurately carry out his or her fiduciary duties to the court, to the estate and to the beneficiaries. If the decedent left a will and named a person to administer the estate, that person is called the executor; if the decedent died without a will or failed to name an executor, the court will appoint an individual called an administrator to see that the estate is properly managed. For the balance of this post, we will use the term “administrator” to refer to both positions.
The administrator’s first task is to assemble the decedent’s assets and pay all debts and claims pending against the estate. The administrator has the power to dispute any debt that is believed to lack merit. The administrator must then pay state and federal estate taxes, if any. If the decedent left no will, the administrator must search for heirs who are entitled to receive a portion of the estate. After collecting assets and distributing the estate among the heirs and beneficiaries, the administrator must file a report, called a final accounting, with the court disclosing all estate assets, debts that were paid and distributions to heirs and beneficiaries. Anyone who disagrees with the administrator’s actions can file a protest to the final accounting.
An administrator is entitled to retain an attorney and pay the fees from the estate, providing the court approves the fees as reasonable. An administrator who breaches the fiduciary obligations may face both civil and criminal penalties.