What are Letters Testamentary?

The big question is, What Are Letters Testamentary? Most people learn of this term when they go to the bank to deposit a check or they try to close the Decedent’s bank accounts and the bank representative states “You need Letters Testamentary”. At that point, most will search out what I call “Uncle Google” to find the answer. You cannot go to the Courthouse or to an attorney to simply get a Letter of Testamentary drafted. But what exactly is it? Letters Testamentary is an actual “letter” issued by the Court within a probate proceeding that puts the World on notice that a person has qualified as the Executor of the Estate and now has court authority to conduct business on behalf of the Decedent. This “letter” is issued in the name of the Estate showing that the Executor is qualified. The Executor then steps into the shoes of the Decedent to gather assets, sell or transfer property, and pay debts of the Decedent.

But Letters Testamentary is more than just obtaining a document. It encompasses the entire probate process of obtaining Letters Testamentary and administering the Estate. A person doesn’t get issued Letters Testamentary and then everything stops. It doesn’t magically fix everything. The Executor is taxed with certain responsibilities and obligations once they have been appointed and receive the Letters. This probate process involves notifying creditors, possibly paying debts, distributing assets, and might involve selling property. So what can you expect when needing to obtain Letters Testamentary? Continue reading for an overview of the probate process and what to expect during this time.

Disclaimer

The purpose of this Guide is to provide you with an overview of the probate process in Texas in order to obtain Letters Testamentary. While there are multiple probate proceedings available in Texas depending on the situation, this Guide will cover the basic process of probating a self-proven Will in Texas where there are no issues with the validity of the Will and the Court is issuing Letters Testamentary. This Guide is not intended to replace the legal advice of your Attorney.

Common Terms

Before you probate a Will, it is important to have a general knowledge of the terminology commonly used. Here are a few terms and explanations to help you in the process:

DECEDENT
The common term for the person who passed.

WILL
The legal document that outlines the Decedent’s wishes. If a person dies with a Will, they are said to have died testate.

CODICIL
Legal document that serves as an amendment to a Will. Some Wills have Codicils with them, but many do not.

INDEPENDENT
Term to describe the type of administration of the Estate. If the Executor is Independent, there is very little Court supervision outside of the Texas Estates Code. If an Executor is Dependent, then every action the Executor takes must be approved by the Court. Independent is the most common form of administration.

EXECUTOR
The person with the legal authority to act on behalf of a Decedent to ensure the terms of the Will are carried out.

BENEFICIARY
Person named in the Will to inherit Decedent’s property. The term “beneficiary” is used when there is a Will, whereas the term “heir” is used when a person passes without a Will.

LETTERS TESTAMENTARY
A document issued by the Court after the Decedent’s Will is admitted to probate to show a named Executor has the Court authority to act.

INVENTORY
The process of listing and valuing the assets in the Estate as of the Decedent’s date of death. An Affidavit in Lieu of Inventory may be filed instead of the Inventory, depending on certain requirements.

CREDITORS
Persons or entities who the Decedent owed money at the time of death.

NOTICE TO CREDITORS
There are three types of Notices and not every Estate will need all three. The types of notices you may see in an Estate are Notice to Creditors to be published in a newspaper, Notice to Secured Creditors, and permissive Notices to Unsecured Creditors.

EIN
Stands for Employer Identification Number. Not every Estate is issued an EIN. This is the tax ID issued by the IRS to the Estate instead of using the Decedent’s social security number.

PROBATE
The legal process for winding down the affairs of a Decedent, including transfer of assets and payment of debts.

TESTATE
Common term for when a person dies having a Will.

TEXAS ESTATES CODE
Section of laws that govern Estates and probate in Texas.

General Information

When a person dies leaving a Will behind, it is said they died testate. If the Will is a “standard” Will, it should list the name(s) of the Executor. This person should already be aware they are named as the Executor of the Estate. Just being named in the Will does not allow you to transfer assets and wind up the Decedent’s affairs.

The named Executor should locate the original Will as that must be turned over to the Court in the probate process. There are options when the original Will cannot be found, but those are not discussed in this Guide.  Generally, a Will must be probated within four (4) years from the date of the Decedent’s death. As with everything else in this Guide, there are some limited exceptions that will not be discussed.

Once the Will is located, it is necessary to hire an attorney. You cannot represent yourself in the probate process as an Executor, so an attorney is necessary. Any funds spent out of pocket are considered administration expenses and may be reimbursed from funds in the Estate during the administration process.  One of the biggest factors to consider in hiring an attorney is the location of the attorney and where the probate will take place. In many circumstances, this is not an issue. Sometimes, however, the Executor may not live close to the Decedent’s residence. You want to find an attorney local to the county of jurisdiction. So how is jurisdiction determined? If the Decedent is a Texas resident, then probate will occur in the County of residence. So what happens when a Decedent dies in a nursing home? For the purpose of jurisdiction, a residence is determined by the place where the person normally resided. I generally go by the address listed on the driver’s license or death certificate for residency.

Meeting with your Attorney

Things you should know or bring with you to your first meeting with your Attorney.

• Original Will;
• Death Certificate;
• Decedent’s driver’s license or state identification card;
• General idea of assets owned by Decedent;
• General idea of debts owed by Decedent;
• Any information regarding the named beneficiaries, such as their current address and their age; and
• Any issues or other facts that may be relevant for the Attorney to know

You should be prepared to pay the attorney’s deposit or requested fees from your own finances. You can expect to pay a deposit between $1,000 to $5,000, depending on the attorney. These fees are considered administration expenses and should be refunded to you once the Estate is open and funds are available.

Once you have chosen an attorney, you will work with that attorney to be appointed as the Executor by the Court and administer the Estate. So how does that happen? First, the attorney will ensure that you are a qualified person to serve as the Executor. To be qualified, you must be named as the Executor, be a resident of Texas (or appoint a Resident Agent if you live out of State), not have been convicted of a felony, and not have been deemed incapacitated by a Court. Then the attorney will prepare the application to probate the Will and file it, along with a copy of the Will, electronically with the appropriate Court. The County Clerk or Probate Clerk will accept the filings and issue a case number. Once the case number is issued, the attorney must deliver the original Will to the Court within three business days.

Your attorney should keep you updated throughout the process. You will need to work with your attorney closely to ensure you, as an Executor, follow the law and conduct yourself accordingly. You are a fiduciary, which means you are held to a higher standard than an individual. Your actions must be for the benefit of the Estate and the beneficiaries, not yourself individually. You must act prudently, or you could be personally liable for your mistakes.

Before the Hearing

At this point, the attorney has a choice of whether to obtain waivers from the beneficiaries listed in the Will or wait until after the hearing to provide the required notice to the beneficiaries. What is the “required notice”?

The Texas Estates Code requires that an Executor notify the beneficiaries named in the Will that they are entitled to receive something from the Estate within 60 days of appointment unless a beneficiary waived the notice, entered an appearance in the case, has already received their gifts, if the gifts are less than a certain value, or they cannot be found.

If the attorney chooses to send Waivers to the beneficiaries, then the attorney will send those Waivers along with a copy of the Application to Probate Will and the Will that have already been filed with the Court. When the Waivers are returned, the attorney files them with the Court. The beneficiaries do not have to execute waivers. Instead, the attorney can wait and provide notice AFTER the Will is admitted to probate, meaning after the hearing.

The Hearing

Your attorney will schedule a hearing with the Court. Depending on the Court, some Courts will still conduct hearings by Zoom video. Once a Court date has been confirmed, you will either appear in in person in the Courtroom or by Zoom video. Regardless of how you appear, it is important to understand that it is a Court proceeding. You are expected to appear in the proper courtroom attire. If you are in person, this means for ladies, you should wear a nice blouse that covers the midriff and the shoulders, slacks, jeans, or a skirt or dress, and shoes. For the men, you should wear a nice shirt or polo, tucked in with belt, nice jeans or slacks, and shoes. No hats, sunglasses, flip flops, torn shoes, spaghetti straps, halter tops, half shirts, clothes with holes in them, etc. You should not be chewing gum, eating, or drinking anything during the hearing.

If you are attending the hearing via Zoom video, you should dress appropriately from the waist up. The same rules apply – it is still treated as a Courtroom. You should be in an isolated location away from background noise and a lot of interference. There is also no eating or drinking during the hearing, and no hats or sunglasses.

When the hearing starts, the Judge will call the case and the attorney will announce to the Court they are ready. The Judge will then have the attorney call their witness. You, as the Applicant and proposed Executor, will serve as the witness. You will be testifying to the death of the Decedent and other facts. This is called a simple prove-up. Do not worry, however, as the attorney will make it easy for you. Most attorneys will make a statement of fact, then ask you if that is correct. For example, your attorney will ask you to state your name for the Court. The next question may be “Your husband died on October 12, 2021 at the age of 62, is that correct?” You will simply have to answer “Yes”. There is a series of about 12 to 15 questions that will be in the same format. The entire hearing should take approximately 10 minutes. Once the testimony is over, the Judge will sign the Order Admitting Will to Probate and will qualify you as the Executor. You will sign the “proof of death and other facts” and take an “Oath”.

Once the Proof and Oath are signed, you will see the Clerk and they will provide you a document called Letters Testamentary. This is your official document that authorizes you to act on behalf of the Estate.

After the Hearing

Now that you have been appointed as the Independent Executor of the Estate, there are some steps that need to be taken. As Independent Executor, the following is a basic list of your duties. Some of these will be handled by your attorney, and some of these will be handled by you:

• gather or collect the assets of the estate;
• obtain an EIN (if necessary)
• open an Estate account (if necessary)
• notify the beneficiaries of the estate (if they didn’t waive notice before the hearing);
• notify the creditors of the Decedent;
• file an inventory with the Court;
• file an affidavit or certificate that beneficiaries have been notified;
• pay the debts of the Decedent;
• pay your attorney’s fees and other administrative expenses; and
• distribute the remaining assets to the beneficiaries.

Estate Checking Account

Obtaining an Employer Identification Number (“EIN”) and opening an Estate checking account is not always necessary. Sometimes a Decedent has received funds after death such as a tax refund, royalty checks, final pay check, insurance proceeds, just to name a few. There are other times when the Estate will be selling the real property and an account will be necessary. In these instances, your attorney will obtain an EIN from the IRS website. Once the EIN has been assigned, you will take the EIN, the Letters Testamentary, and a copy of the Order Probating the Will to a financial institution of your choice. There you will open a checking account that should be titled “The Estate of __________________ (Decedent’s Name)” and you will sign as _______________ (your name), as Independent Executor. Your attorney will advise you whether this step is necessary.

Notice to Secured Creditors

In any Estate that has secured creditors, a separate notice to the creditor must be given. Within 60 days of the date Letters Testamentary were issued, an Executor must give notice of the issuance of the Letters to each person or entity that has a claim for money against the estate that is secured by estate property. The notice must be sent by certified mail, return receipt requested. The attorney will provide the required notice. However, as Executor, you will need to provide the information to the attorney for the notice, i.e. the creditor’s name, address, and account number if possible. After the attorney provides the notice, the attorney will file a certification with the Court that the notices were given.

Permissive Notice to Unsecured Creditors

In addition to the notice to secured creditors, the Executor can give permissive notice to any unsecured creditors. This notice is a little different than the secured creditor notice, but the attorney will handle the specific information. As Executor, you will need to provide the names, addresses, and account numbers for the creditors to the attorney.

General Creditor Information

Once creditors have been notified, you will need to work closely with your attorney to ensure the claims process if followed correctly. It can be quite confusing, and you should wait to pay any claims until your attorney advises you.

The general claims process is as follows:

• Claims of creditors against the estate may be presented to you at any time before the estate is closed if the claim is not barred by the permissive notice mentioned above or by the general statute of limitations.  Claims may be secured or unsecured by estate assets.
• Action on Claims. Once you receive a claim or if a claim is filed with the Clerk, you should immediately contact your attorney because certain deadlines may apply for dealing with the claim.  Under certain circumstances, if a creditor files suit on a just claim that has been rejected, the court may find you personally liable for the cost of the suit, and you may be removed as executor for failure to have properly acted on the claim.
• Barred Claims. Claims that are barred by the general statute of limitations should be rejected.  Claims of creditors to whom you sent the permissive notice described above are barred if they are not presented or filed within four months from the date the creditor received the notice.  These late claims should also be rejected.

It is also possible to negotiate the debts to a lower amount. Again, you should follow the advice of your attorney before paying any claims or debts of the Decedent.

Notice to Beneficiaries

As previously discussed in this Guide, the attorney may have received Waivers from the beneficiaries with regard to notice. If the attorney did not obtain waivers, then providing notice will be required. Within 60 days of the date the Order Admitting Will was signed by the Judge, the attorney must send a certified letter to each beneficiary named in the Will providing them notice that the Will was probated. The attorney must then file a Certificate of Notice with the Court within 90 days certifying that the beneficiaries received the notice.

Inventory

Within 90 days of receiving Letters Testamentary, a sworn inventory, appraisement and list of claims (“Inventory”) of the estate must be filed. Failure to file your Inventory timely could result in your removal as independent executor and a fine of up to $1,000.00.  When people hear the word “inventory”, many believe they must list every item in the home, such as plates, silverware, clothing, furniture, televisions, etc. Although sometimes items may be listed separately, the inventory will generally consist of an itemized list of titled assets and a lump sum of tangible personal property. For example, real property, oil, gas, and mineral interests, financial accounts, and vehicles will all be itemized. However, household furniture and furnishings can be lumped together in a broad category and a value placed on them as a whole.

The Inventory will list the assets and place a value on the items as of the date of death of the Decedent. For real property, the value can be taken from the appraisal district for the year of death. Vehicles can be valued based on current blue book value. The Executor can get the date of death balance from the financial institutions for accounts. As for tangible property, I generally use a value based on what the Estate may bring in if sold in an Estate Sale. If the Estate contains any type of collectibles or property of significant value, then that property should be itemized and possibly appraised. For example, original art works, stamp or coin collections, or a multitude of firearms. These items can be appraised by those knowledgeable in the specific area.

In addition to assets, the inventory must list all claims due or owing to the estate. The list of claims must state:

(1)  the name and, if known, address of each person indebted to the estate; and

(2)  regarding each claim:

(A)  the nature of the debt, whether by note, bill, bond, or other written obligation, or by account or verbal contract;

(B)  the date the debt was incurred;

(C)  the date the debt was or is due;

(D)  the amount of the claim, the rate of interest on the claim, and the period for which the claim bears interest; and

(E)  whether the claim is separate property or community property.

These claims are debts that someone owed the Decedent at the time of his death – not what the Decedent may have owed.

Further, if there are no unpaid debts of the Estate at the time the inventory is due, an Executor may file an affidavit stating that all debts are paid and that all beneficiaries have received a detailed inventory and appraisement. This affidavit is in lieu of filing the Inventory with the Court. However, an Inventory is still required to be prepared and a copy provided to each beneficiary.

Miscellaneous Items

Due to the uniqueness of each Estate, there ay be circumstances in which property must be paid (such as a mortgage) or sold, rather than distributed to the beneficiaries. As the Executor, it is your duty to ensure that any property is accounted for, maintained, and insured. You must secure any real property to ensure it is not broken into and items stolen. If a beneficiary is residing in the property, you still have a duty to ensure it is being taken care of and the beneficiary should be paying rent, utilities, and maintenance. As a fiduciary, you owe the highest loyalty to the beneficiaries – not to yourself. As such, it is very important to maintain communication with your attorney and not distribute assets or take actions without attorney guidance. Once the Inventory has been approved, your attorney can discuss administration expenses, reimbursements, distributions, and closing the Estate.

This Guide is intended only to give you an understanding of the process for Letters Testamentary. Every probate is fact specific and some situations are not discussed in this Guide. Always consult with an experienced probate attorney. This Guide is not designed to replace the solid advice of an experienced attorney.

Please visit our Probate Frequently Asked Questions Page If you have any questions regarding Probate or you can contact Probate Attorney Ronda Haynes to schedule a consultation at (817) 752-2177