Fiduciary duty is a term you may hear throughout multiple elements of your estate planning or administration. When someone is legally entrusted to manage another person’s affairs, they are referred to as a fiduciary and must act in the person’s best interests.
In probate (the court process of estate distribution after a person passes away), the fiduciary is called a personal representative, which will either be an executor or an administrator. If the person died with a valid will, they would have appointed an executor to manage the estate distribution process during probate. If the person died without a will (or the named executor doesn’t want to act), the court will appoint a personal representative called an administrator. Executors and administrators are functionally similar, but the terms refer to whether the deceased person or the court named the personal representative.
Under Texas law, the rights and responsibilities of an executor are extensive. If you are an executor, you must act in the best interests of both the decedent (the deceased owner of the estate) and the beneficiaries.
When the court affirms your position as the executor of an estate, you will need to:
- File an oath of office within 20 days of the appointment/affirmation
- Request letters of administration after taking the oath
- Publish a notice of the estate in a local newspaper for the decedent’s creditors within 1 month of qualifying for letters of administration
- Send the notice to all known secured creditors within 2 months of receiving the letters of administration
- Give notice to unsecured creditors (upon which they can make claims within 121 days)
- Collect all property that belonged to the decedent
- Pay the decedent’s debts with their estate funds or liquidated assets (while setting aside property that is exempt from creditors)
- If necessary, pay state, federal, and inheritance taxes on the estate within 9 months of the decedent’s death
- Distribute remaining assets to beneficiaries named in the will (or in accordance with the court’s heirship findings) within 3 years of receiving the letters of administration
- Manage/implement a 1-year family allowance for the decedent’s spouse, minor children, and/or adult incapacitated children
In Texas, you may or may not become an independent administrator. An independent administrator can fulfill all the above actions without direction or oversight from the court. To be an independent administrator, the will must designate you as such. If the will does not provide for independent administration, you can still become an independent administrator if all beneficiaries agree upon and request it from the court. You cannot request independent administration, however, if the will specifically prohibits it.
One common concern regarding estate distribution is what may happen if the estate is not large enough to pay all outstanding debt. Fortunately, the beneficiaries and executor are not responsible for covering the rest of the debt. However, they may not receive what the decedent intended to bestow, because the executor must use the estate’s funds and assets to pay all debt before distributing what remains.
If you breach your fiduciary duty and/or are removed from your position, you will need to pay for the costs of the removal and the related attorney’s fees.
Contact Us for Assistance with Probate
Many of the responsibilities of an executor, administrator, or trustee can be difficult to fulfill without guidance from an experienced attorney. At Campbell Law Firm, we are dedicated to helping personal representatives fulfill their duties and complete the probate process as efficiently as possible. If you have additional questions about this procedure or you need administration assistance, we can put our decades of experience to work for you.