The estate planning process can be complex. One of the most important steps is making beneficiary designations. When someone identifies beneficiaries, they’re choosing who they want to inherit their hard-earned assets.
When many people think of a beneficiary, they imagine someone who receives money or real property but is otherwise uninvolved in the process of estate administration.
However, the role of a beneficiary in a Texas estate is far more complex than that, and as a beneficiary, you have rights before, during, and after the probate process. If those rights are being infringed upon, a Texas estate administration lawyer may be able to help.
So what is a beneficiary entitled to in a Texas estate? Here’s a closer look at your rights as a beneficiary under Texas law and what to expect during the probate process.
What It Means to Be a Beneficiary in Texas
In Texas, when someone dies intestate (without a will), their assets are distributed according to the rules of intestate succession found in the Texas statutes.
The rules of intestate succession outline the “default” procedure for distributing a decedent’s estate, and they generally prioritize the rights of surviving children, spouses, and other close family members to inherit the decedent’s assets.
However, many people want to choose who their money, personal property, and real property will go to after their death. To do so, they must override the state’s intestate estate asset distribution procedures by designating beneficiaries.
A beneficiary is someone who has been selected to benefit from an estate — in other words, to receive assets after a particular person dies. You may sometimes hear beneficiaries referred to as “heirs.”
Most people know that beneficiaries are often named in wills, but many other types of estate planning tools include named beneficiaries as well:
- Life insurance policies
- Retirement accounts
- Trusts
- Bank accounts and other financial accounts
- Brokerage accounts
- Property deeds like Lady Bird Deeds and transfer-on-death (TOD) deeds
- Pension plans
Some types of accounts and estate planning instruments have one named beneficiary (or more than one). Others have contingent beneficiaries. If the primary beneficiary has died or is otherwise unable to inherit, the assets in question can go to the secondary beneficiary.
Key Legal Rights of a Beneficiary
Understanding the role of a beneficiary in a Texas estate can help you navigate the often-complex estate administration process. Unlike the executor of the estate, you don’t have any significant responsibilities to the decedent’s estate — your primary responsibility is to inherit.
However, while Texas law doesn’t assign many responsibilities to beneficiaries, it does grant them several rights. So what are a beneficiary’s rights in Texas? Here’s a look at some of the most important ones:
Right to Information
The communication duties of the executor to the beneficiaries are a central part of the probate process. If a beneficiary has been chosen to inherit property, they have a right to a full disclosure of information about the asset(s) they will receive. That information might include the following:
- The inherited asset’s value
- Any recent evaluations or appraisals
- The will or trust itself
This kind of full disclosure is important because it helps beneficiaries make informed decisions about how to handle the asset they receive. It’s also crucial that beneficiaries have access to the wording of the will, trust, or other interest.
As a beneficiary, you aren’t obligated to read the will or trust in its entirety. However, by doing so, you can help ensure the executor is protecting your rights and acting in your best interests.
Right to an Accounting
A right to an accounting is a right to see thorough documentation of an asset’s management and value. Beneficiaries are entitled to see the profits and/or losses a particular asset has generated since the decedent’s death.
For you as a beneficiary, receiving a full accounting from the executor can help you plan for the future. For example, if you are set to inherit a highly profitable restaurant property, you might assume that you’d benefit most from keeping it.
However, if the executor sends you a full accounting of the property and you see that the property has been losing money since the decedent’s death, you may realize that selling it is a sounder financial choice.
Right to Fair Treatment
The deceased’s personal representative or estate executor must treat all beneficiaries fairly and equally. They must not show favoritism to certain beneficiaries, and they should be careful to protect the rights of all.
Right to Challenge a Will or Trust Under Texas Law
Can a beneficiary challenge a will in Texas? The answer is yes. This is one of the most critical beneficiary rights in a Texas estate. If you believe that the will is not valid or the distribution of assets is unfair or biased, you may challenge a will in probate court.
These are a few examples of instances where it may make sense to raise a challenge to a potentially invalid will:
- You believe the deceased was unduly influenced by other family members when creating the will
- The will was improperly executed (or you believe it was)
- The decedent was not in a state of sound mind when creating the will
- There is a later will revoking the existing one (or you believe that the deceased intended to revoke the will)
It’s important to note that some wills have what’s known as a “no-contest clause.” This is a provision stating that anyone who challenges the will during the probate process will be disinherited. No-contest clauses are meant to reduce the risk of lengthy probate disputes (especially petty or mean-spirited ones).
These clauses are not always as black-and-white as they seem. For instance, a no-contest clause would likely bar you from challenging a provision that awards your sibling slightly more than you.
However, if you have evidence that the will is fraudulent or that the decedent was unduly influenced by a particular person, the court may allow you to present that evidence without being disinherited.
If you’re considering contesting a will, you should contact a probate lawyer to discuss your options. Your lawyer can help you understand whether contesting the will is your best option or not. The legal process to do so can be long and complex, and in certain circumstances, it may not be worthwhile.
How Beneficiaries Are Designated
In most cases, designating beneficiaries is a relatively simple process. However, the exact nature of that process depends on the asset in question. For example, if someone wants you to receive personal property, they would likely designate you as a beneficiary in a will.
Designating beneficiaries for life insurance policies and other contractual agreements is slightly different. Generally, someone can designate beneficiaries within the contract itself.
You might wonder what happens if there is a conflict. When the beneficiary designations listed in a will conflict with the beneficiary designations on financial accounts or insurance policies, the designations on the contracts generally prevail.
For example, imagine someone gets divorced and remarries. They update their will to include their new spouse’s name, but they forget to change the beneficiary designations on their other accounts. If they die, the money in these accounts would likely still go to the former spouse.
Errors like these can lead to considerable family strife. Estate planning attorneys generally suggest updating your estate plan after every major life event (like divorce or remarriage) to avoid these situations.
What to Expect During the Estate Administration Process
You may wonder — how long does it take to receive an inheritance in Texas? The exact timeline depends on a number of factors, but it’s important to note that the process of closing out an estate is more complex than many people realize. Consequently, it may take longer to receive benefits than you were expecting.
Before any estate property can be distributed, Texas law requires the estate representative to begin the probate process. These are some of the key steps involved:
Applying for Probate
The probate process begins after an interested party files an application for probate with the court. After court approval, a notice will be posted to alert creditors (as well as the general public) of the estate’s administration.
Initial Hearing
At this initial hearing, the court may hear testimony concerning the will’s validity. If the decedent’s will named an executor and that person is willing and able to perform all necessary duties, they will likely be confirmed as the executor.
If there is no executor named or the named executor is unable to administer the estate, the court appoints someone else.
Filing Inventory, Appraisement, and List of Claims
This process can be very time-consuming. When the executor files an inventory, appraisement, and list of claims, they are giving the court a list of all the estate’s assets and their potential values. The list of property includes real property, personal property, and other assets (like financial accounts).
The “list of claims” submitted is a list of the estate’s outstanding debts. Creditors may file claims against the estate, and the executor is responsible for evaluating these claims and paying them if appropriate.
Handling Any Disputes
Texas probate code allows any and all interested parties to challenge the will or raise a dispute during the probate process. In many instances, valid wills can pass through probate without seeing any kind of challenge. In other cases, family members and other interested parties may engage in acrimonious, drawn-out disputes.
Paying Debts and Taxes
Generally, before any assets can be distributed to beneficiaries, the executor of the estate must use estate funds to pay outstanding debts. After debts, taxes, and other expenses have been paid, the remaining assets may be distributed.
When and Why to Involve a Probate Attorney in Texas
Understanding the role of beneficiaries in probate can give you an idea of what to expect. It can also help you understand when to hire a lawyer as a beneficiary. These are some common situations where working with a probate lawyer may be worthwhile.
The Executor Is Not Communicating
The executor of the deceased person’s estate may not need to be in constant contact with you and the other beneficiaries. However, if they are not communicating and are refusing to provide important information, it might be a sign that they are violating both Texas statutes and their fiduciary duties.
If the executor is refusing to communicate despite your attempts to contact them, this situation may be impossible to resolve alone. A probate lawyer may be able to help get to the bottom of the situation.
There Are Disputes
Probate can bring out the worst in many families. If there are disputes over the will or you think there may be, an attorney may be able to help protect your interests and your inheritance.
It can be helpful to have legal representation if you believe the probate process will be fraught with disputes. However, if you intend to raise your own challenges in court, working with an inheritance dispute lawyer in TX becomes even more critical.
The Estate Is Complex
Some relatively straightforward estates only involve a few types of assets. However, an estate worth millions that includes businesses and multiple real properties can be harder to navigate. A probate lawyer can help you understand the process and protect your interests throughout.
If your inheritance is substantial enough that it’s likely to incur taxes, working with an attorney is highly recommended. The average person isn’t aware of how taxes may impact what they inherit, but an attorney can help minimize the amount they potentially owe.
Concerned About How to Protect Your Inheritance Rights in Texas?
Knowing how to protect your inheritance in Texas isn’t just about money — it’s about making sure your deceased loved one’s assets are distributed according to their wishes.
If you’re looking for an estate lawyer for beneficiaries in Texas, Hunter Sargent, PLLC is ready to assist. For seven generations, we’ve helped Texans from all walks of life craft personalized estate plans. We’ve also helped beneficiaries like you assert their rights during the estate administration process.
Whether you want to know more about the role of a beneficiary in a Texas estate or are concerned about protecting your inheritance rights, we encourage you to get in touch. Contact us today to book your initial consultation.