For the poor, a new path around probate

Tuesday, March 31, 2015

UPDATE  |  By Trish McAllister, TAJC Executive Director

Picture this: A working-class grandmother dies after a long, full life at 85. She’s survived by a large, loving family and leaves behind some minor possessions, a few hundred dollars in a bank account, and a home in Houston – but no will. 

Probating an estate without a will is complicated and costly. The surviving heirs are going to need to hire an attorney, notice all known heirs, run an ad in the newspaper to notice all creditors, hire a second attorney to represent the unknown and missing heirs, and pay for several other costs. The price tag could easily reach $5,000 to $10,000.

If they don’t have the money, the house may informally pass to a family member but title won’t pass.  Without title, they can’t sell the property, use it as collateral, or get disaster relief if their home is destroyed in a hurricane.

If the home isn’t worth the probate costs the house may be abandoned, lowering property values and blighting the neighborhood and city.

Texans deserve better.

To make sure they get it, the Commission is attacking this problem from multiple angles. We’re asking our state lawmakers to support several bills that help Texas’s poorest residents bypass the probate system entirely.

Alternatives to Probate

Transfer-on-death deed

Senate Bill 462, filed by Senator Joan Huffman, and House Bill 703, filed by Representative Jessica Farrar, creates a transfer-on-death deed, which is a way for people to pass title to real property outside of probate.

Like with a will, someone can decide who the property will go to when they die without losing any rights to the property during their lifetime. It can be completed without the help of a lawyer and recorded in the county clerk’s office at a total cost of less than $50.

Payable-on-death accounts

For many low-income Texans, money in a bank account may be the only asset left when they die. Often, the money is less than the legal fees needed to obtain it.
But even $500 could make all the difference to a grieving daughter trying to get her mother’s affairs in order.

Senate Bill 1791, filed by Senator Rodney Ellis, and House Bill 704, filed by Representative Farrar, would require banks to give information about payable-on-death accounts to their customers. 
The goal is to increase public awareness and use of payable-on-death accounts, which allow a named beneficiary to withdraw money remaining in the decedent’s bank account without the hassle and expense of probate.

We’re also asking legislators to approve legislation that would ease access to probate court and simplify the process. 

Probate Simplification

Probate Forms

Senate Bill 478 by Senator Judith Zaffirini and House Bill 2196 by Representative Senfronia Thompson would create new legal forms that allow low-income Texans to make a simple will without an attorney and to probate those wills in court.

Access to decedent’s bank account balance

For very small estates – those with a total value of $50,000 or less – low-income Texans can use a simplified probate process called a small estate affidavit. 

The catch is that the estate must be debt free to file it, and relatives often have no idea how much money the decedent has in his bank account. Maybe it’s not enough to cover the debts.

Senate Bill 1792 by Senator Ellis and House Bill 705 by Representative Farrar allow a bank to disclose a decedent’s bank balance upon a court order, or in certain cases, to a decedent’s heir.

Teamwork in action

These bills arose from the work of a group of attorneys, judges, bankers, and professors convened by Representative Farrar over the summer who were tasked with helping the poor gain access to the state’s probate courts.

All too often, I have seen people like Dan, a middle-age man living with disabilities and mild mental health issues, come to legal aid on the brink of losing their homes because title hadn’t passed properly or because the heirs couldn’t agree on how the property should pass. Many times, they are elderly or living with disabilities. The few lucky ones get legal aid or pro bono lawyers to prevent that from happening.

Most don’t. Many end up in a nursing home, or placed in a mental institution, or living on the street. Dan didn’t need a mental institution. Or a nursing home. He just needed a place to live. And he had one. 

Let’s help Texans keep the homes they already have.

Let’s pass these bills.

The executive director of the Texas Access to Justice Commission, Trish McAllister has over 20 years of experience in the access to justice field. She served as the executive director of Volunteer Legal Services of Central Texas, a nonprofit pro bono legal service provider. She also worked at Texas RioGrande Legal Aid, where she was a regional team leader for the family law division handling domestic violence cases and then acting branch manager.