3 Ways to Force Estate Distributions in Texas
When It’s Time to Force a Distribution from an Estate in TX, Here’s What You Need to Do
Probate and inheritance can raise thorny issues, especially when assets enter the picture and interested parties disagree on the next steps. In fact, although probate is the process of validating the will and distributing the assets of the estate, those involved in the process can have some very earnest and imperative reasons to seek partial distributions from an estate before the process is over.
Here’s why, with a closer look at:
- How to Force Distributions from Estates in Texas
- Texas Probate: What Happens with Partial Distribution Requests
- 2 More (Tangential) Tools for Demanding Distributions from Texas Estates
- Why Compel Distributions from an Estate: 3 Main Reasons
- Forced Asset Distributions & Partitioning Estates in Texas: Key Takeaways
How to Force Distributions from Estates in Texas
The executor or administrator of an estate in Texas can be compelled to make a distribution from that estate “at any time after the first anniversary of the date [on which the] original letters testamentary or of administration are granted” (Texas Estates Code Sec. 360.001).
In layman’s terms, that’s one year from the date the probate court officially gives the executor or administrator the authority to oversee the estate and distribute its assets.
Example: If the Travis County Probate Court issued letters testamentary on April 1, 2021, beneficiaries could pursue a forced distribution from the associated estate no earlier than April 2, 2022 — and any time on or after that day.
After the one-year mark, any of the following parties can petition the court to partition the estate and distribute part of it:
- Devisees of the Estate
To file this type of “partition action” or “partial distribution request” in a Texas probate court, the petitioner must:
- Include specific information on the filing documents: This includes the decedent’s name, as well as the name(s) and residence(s) of any other heirs and whether each individual is an adult or a minor. If the petitioner doesn’t know this information, they must explicitly state that they don’t know certain details on the application. Additionally, the application must detail why “the estate should be partitioned and distributed.”
- File a “written” application “in the court in which the estate is pending:” Effectively, the action has to be raised in the same probate court that is handling the estate, rather than opening a new case in another jurisdiction.
Texas Probate: What Happens with Partial Distribution Requests
When an heir or another party seeks partial distribution of an estate and files a partition action, Texas law outlines the next steps as follows (Texas Estates Code Sec. 360.002):
- Creditors and all other interested parties have to be “personally cited,” the same as they are in other distributions.
- The court hearing the case can distribute “any portion of the estate” it chooses to if the court sides with the petitioner.
- If the court decides to make distributions to one or some heirs but not all of them, a “refunding bond” will be typically required, unless all interested parties file “a written waiver of the bond requirement.” This bond is essentially an agreement that the heir will return some portion of the distribution to the estate if certain liabilities arise in the future, like an unexpected tax bill, and the estate doesn’t have sufficient assets to cover those liabilities. If a refunding bond is required, the court will set the bond amount.
After a refunding bond or waiver is filed with and approved by the court, the court will issue an order for the executor or administrator to distribute the relevant portion of the estate.
2 More (Tangential) Tools for Demanding Distributions from Texas Estates
Pursuing a partial distribution or a partition action is the primary way to compel executors or administrators in the Lone Star State to distribute some of the assets of the estate before the end of the probate process. That, however, is not the only way to approach this issue, and it may not be the best option, depending on the circumstances, the assets, and other factors involved in a given case.
In fact, two other legal tools for forcing estate distributions in Texas may be better alternatives in some probate cases. Those options involve filing a(n):
- Objection to the Inventory; or
- Demand for Accounting
Here’s a deeper dive into both of these tangential tools for compelling distributions from estates.
Tool #1: Filing an Objection to the Inventory
As part of the Texas probate process, the executor or administrator will have to create a detailed inventory of all of the estate’s assets and liabilities. This should include debts and claims, along with an accurate appraisal of the property held by the estate.
If any interested party questions the accuracy of the inventory, they can typically file an Objection to the Inventory. This can occur when there’s reason to suspect that:
- Assets or debts have been omitted from the inventory.
- Errors exist in the nature or appraisal of the inventory.
According to Texas Estates Code Sec. 309.103, an Objection to the Inventory:
- Should be filed before asset distribution whenever possible
- Will involve a hearing to determine whether the complaint has identified a valid issue or error
To pursue an Objection to the Inventory in Texas, an interested party must:
- File a written complaint, detailing the alleged error(s)
- Cite the executor or administrator to appear in court to explain why the item(s) are not erroneous
If the court finds that errors do exist, it will order a correction and, in some cases, new appraisals of the inventory. Any new appraisals will typically have to be filed with the court “before the 21st day after the date of the order.”
Notably, the Objection to the Inventory can be used as evidence of ownership or valuation for specific property in an estate. That can be crucial to forced distributions from estates, giving interested parties clear documentation of their claim to some asset (or inheritance) while providing a way to assess the amount or value of specific distributions.
Consequently, an Objection to the Inventory can be useful in Texas probate cases when there are questions or uncertainties about the accuracy of an estate inventory or when the value of certain assets is unclear.
Tool #2: Filing a Demand for Accounting
Another tool to help compel asset distributions from estates is a Demand for Accounting. This filing is essentially a request for all transactions associated with the estate to be provided in detail.
According to Texas estate Codes Sec. (404.001), a Demand for Accounting can be made by an interested party any time after 15 months from the date on which the letters testamentary or of administration have been issued. When this occurs, an “independent executor” will be brought into detail:
- The estate’s property that “has come into the executor’s possession as executor”
- How the property in the executor’s possession has been disposed of
- The estate’s debts that have been paid
- Any remaining outstanding debts and expenses the estate may have
- Any of the estate’s property that is still in the executor’s possession
- Any other relevant facts necessary to fully understand the exact condition of the estate
- Any facts demonstrating why the administration should remain open and why the estate should not be distributed
As a result, Demand for Accounting filings can be the first step in pursuing a forced distribution from estates in Texas.
Why Compel Distributions from an Estate: 3 Main Reasons
With straightforward and sideways tools to force distributions from Texas estates, the best option for moving forward can depend on the probate proceedings, the executor, the estate, and your objectives. In fact, many interested parties in Texas probate cases take this legal action when there are concerns or disputes regarding:
- Joint ownership of inherited property: When multiple beneficiaries share ownership in some inherited asset, they may pursue a partition action if they don’t see eye to eye on how to handle that asset. For example, adult children who inherit real estate from deceased parents may disagree on how to handle that property, with some wanting to sell it while others may want to retain it. In these cases, partitioning the estate can be a viable way to resolve the dispute.
- An executor’s actions or inaction: If there’s reason to suspect that an executor or administrator may be mishandling an estate or acting unethically in any way, pursuing an Objection to the Inventory, a Demand for Accounting, and/or a partition action can be prudent. In addition to shining a spotlight on the details of the estate, these actions may uncover any missteps, omissions, or errors associated with the executor’s actions and the estate’s assets.
- Prolonged probate: In some cases, heirs or devisees may simply need access to or official ownership of certain assets before the probate process has reached the distribution phase. That tends to come into play with real property and particularly complicated probate cases.
While not the only reasons to compel an estate to make a distribution, the above circumstances can serve as telltale signs that additional filings may be necessary in a probate case — and that it’s in your best interests to consult an Austin probate attorney and seek legal counsel.
Forced Asset Distributions & Partitioning Estates in Texas: Key Takeaways
Beneficiaries can have various reasons and means of compelling executors (or administrators) to make distributions from estates, and:
- Texas law sets forth specific requirements for seeking the partitioning of an estate.
- Those pursuing forced estate distributions will still have to establish why this is necessary in court. If the court sides with the petitioner, the court may order the sale of the property. In many cases, the other owner (who doesn’t want to sell) may have the first opportunity to buy the property, before a more public sale ensues.
- You don’t have to be the beneficiary of a will or an estate in Texas for the issue to impact you. If you co-own real estate or other real property with friends, family, or others, you could find yourself dealing with new co-owners who’ve inherited the asset and who don’t agree with you on what to do with it. And that could mean you’re facing the possibility of a partitioning action and a forced sale.
Ultimately, forced distributions and partitioning suits can raise complex issues, high-stakes disputes, and additional court proceedings. All of that can be easier to navigate with the counsel of an experienced Austin probate lawyer.
Find Out More About Wills, Probate & Estate Administration
Whether you’re creating a will, administering an estate, or considering a partition action as an heir, the representation and guidance of a skilled attorney can help you understand your rights and efficiently move the process.
No matter what issue you’re facing in probate, estate planning, or estate administration, you can turn to an experienced Austin probate and estate lawyer at the Law Office of Todd A. Wilson, now also TAW Law TX. We are ready to share confidential advice in a free, no-obligation consultation. Simply reach out to get more answers today.
Todd A. Wilson
Todd A. Wilson has been practicing law since 2007, with the aim of educating all strata of society and sharing crucial insights about the importance of estate planning, probate, and more.
The Law Office of Todd A. Wilson (also known as TAW Law TX) offers affordable estate planning and probate services.