July 1, 2018

Independent Administration in Texas

probate independent administration

Probate Law Blog

Houston Probate Attorney

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What is an independent administration?

An independent administration is a non-court administration.  After a person has applied for letters testamentary and been qualified as independent executor by the court, the executor files an inventory of the estate’s assets and their appraised value, and a list of claims of the estate. Thereafter, the executor administers the estate without any court involvement or supervision, much the same way as trusts are administered.

The powers of an independent administrator are broad. Texas Estates Code Sec. 402.002 provides that “any action that a personal representative subject to court supervision may take with or without a court order may be taken by an independent executor without a court order.”

How can independent administration be used to administrator an estate?

In nearly any situation where the distributees agree, independent administration may be used to administrator an estate. However, it may not always be advisable, for example, such as in situations where the estate is significantly indebted.

Expression of testator’s intent in will

Texas Estates Code Sec. 401.001 authorizes a testator to provide for an independent administration of his estate.

Most Texas wills contain a clause providing for independent administration, such as the following:

I appoint _______________________ as independent executor of my estate to serve without bond, and I direct that no other action shall be had in the probate court in relation to the settlement of the person’s estate than the probating and recording of the will and the return of any required inventory, appraisal, and list of claims of the person’s estate.

Conversely, a will may specifically provide that there shall be no independent administration, although that is rare.

Creation in estate by agreement

Sometimes a decedent’s will names an executor but the will does not provide for independent administration. Or the decedent dies intestate – i.e., without a will.

In such cases, all distributees of the decedent may agree on having an independent administration. The probate court will then enter an order granting independent administration and appointing the person, firm, or corporation designated by the distributees as independent executor, unless the court finds that it would not be in the best interest of the estate to do so.

Powers of an independent administrator

The powers of an independent administrator are broad and include all the powers of a personal representative of a court-supervised administration. These powers may be usurped by the probate court only where the Texas Estates Code specifically and explicitly provides for some action in the court.

The powers of an independent administrator include anything that is necessary to administer the estate and include the power to sue or be sued, compromise claims, pay creditors’ claims, set aside a family allowance, continue to operate a business that is part of the estate, and make partial or final distribution of assets to beneficiaries.

To pay for the estates debts, expenses and claims, an independent executor can give mineral and ground leases, sell real and personal property, and borrow money.

Power of sale

Where a will grants power of sale to an independent executor, the independent executor may sell real property without court authorization or approval.

If the power of sale is not granted in a will, the independent executor has the power of sale that would be authorized to a personal representative in a dependent administration with court approval; i.e., the right to sell real property for the purpose of paying debts, including funeral expenses and expenses of administration.

Removing an independent administrator

An independent executor may be removed through the court’s own motion or the motion of an interested party.

An executor may be removed without notice when:

(1) the independent executor cannot be served with notice or other processes, or

(2) sufficient grounds appear to support a belief that the independent executor has misapplied or embezzled, or is about to misapply or embezzle, all or part of the property committed to the independent executor’s care.

An executor may be removed with notice if he or she:

  • neglects to qualify in the manner and time required by law;
  • fails to timely return either an inventory of the estate property and a list of claims;
  • fails to make an accounting which is required by law to be made;
  • is proved to have been guilty of gross misconduct or gross mismanagement in the performance of the independent executor’s duties;
  • becomes an incapacitated person, or is sentenced to the penitentiary, or from any other cause becomes legally incapacitated from properly performing the independent executor’s fiduciary duties;  or
  • the independent executor becomes incapable of properly performing the independent executor’s fiduciary duties due to a material conflict of interest.

Closing an independent administration

While there is no requirement that an independent executor must formally show closing, the independent executor may file with the court a closing report or a notice of closing of the estate. The affidavit lists and states the property is distributed, that all debts have been paid, and that no litigation is pending.

Alternatively, an independent executor may file an action for declaratory judgment under Chapter 37, Civil Practice and Remedies Code, seeking to discharge the independent executor from any liability involving matters relating to the past administration of the estate that have been fully and fairly disclosed.

Finally, at any time after an estate has been fully administered and there is no further need for an independent administration of the estate, any distributee may file an application to close the administration.

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