The Texas probate process has a reputation for taking some time, especially when an estate is large. There are many steps involved, from filing paperwork with the courts to filing tax returns. The delays involved with probate proceedings may seem interminable for those anticipating an inheritance.
The probate process involves identifying and fulfilling someone’s obligations to others, and sometimes the property that they have in their name when they die does not end up going to the beneficiaries that they outlined in their estate planning paperwork.
Texas beneficiaries who are aware of their inclusion in someone’s will and are anticipating an inheritance from their estate should temper their expectations with the understanding that the two parties below typically have priority consideration over family members and other beneficiaries.
Federal and state tax authorities
Although the state of Texas does not assess an estate tax, the United States federal government does. If someone dies with more than $12,920,000 worth of property in their estate, at least as of 2023, their assets may be subject to estate taxes that could drastically reduce how much someone’s beneficiaries received. There may also be income tax payments due both for the estate itself and the deceased individual. Any tax obligations will generally require priority payments during estate administration.
Creditors able to make a valid claim
The executor or personal representative of an estate will often need to both send letters to specific creditors and publish notice of someone’s passing to ensure that unknown creditors also have a chance to make a claim for the repayment of someone’s debts. Even Medicaid can ask for repayments from the estate of someone who received benefits while still alive. Those creditors have a right to repayment before family members have a right to inherit. In some cases, the debts owed when someone dies will completely consume what property they had in their name, leaving them with nothing to pass to their children or other chosen beneficiaries.
Many testators plan carefully to minimize taxes and preserve certain assets from creditor claims. Learning more about what will decrease the value of an estate may help beneficiaries have more realistic expectations regarding how much property will actually pass to them.