Muniment of Title vs. Letters Testamentary

What does it mean to probate a will as a muniment of title? Probate is the legal process wherein the executor or an heir to the will submits an application asking the court to declare the will to be valid. The court clerk then posts a notice on the courthouse wall announcing that a probate application has been filed. After the return date in the notice, the court holds a short hearing on the application. If the application and notice are in order, the court will enter an order admitting the will to probate. In a muniment of title procedure, the court process stops there. The clerk merely issues a certified copy of the will and the order admitting will to probate to the heir. The heir then presents these certified copies to third parties who can then read the will and easily make a determination who is entitled to the decedent's property. No Letters Testamentary are issued because no executor is appointed in a muniment of title procedure.

What are the requirements for a muniment of title procedure? The courts have two requirements before admitting a will to probate as a muniment of title. First, there must not be any debts owed by the Decedent or his or her estate. Second, the decedent must not have received medicaid benefits (nursing home or other state (not federal) medical assistance).

When is a muniment of title procedure most often used? A muniment of title procedure is typically used when the only property of the estate is real estate (land), a motor vehicle, and/or tangible personal property (furniture, etc.).

Can a muniment of title procedure be used when a financial account is part of the estate? Theoretically, yes, but practically, rarely. Subsection 257.102(a) of the Texas Estates Code provides that "An order admitting a will to probate as a muniment of title constitutes sufficient legal authority for each person who owes money to the testator's estate, has custody of property... belonging to the estate, or purchases from or otherwise deals with the estate, to pay or transfer without administration the applicable asset without liability to a person described in the will as entitled to receive the asset." Subsection 257.102(b) provides that "A person who is entitled to property under the provisions of a will admitted to probate as a muniment of title is entitled to deal with and treat the property in the same manner as if the record of title to the property was vested in the person's name." Sounds like a bank can just look at the will and hand over the proceeds in the account, right? Not exactly.

Financial institutions often insist that the proceeds in the decedent's account be transitioned into an estate account and not directly to the heir. In their view, only an executor or administrator can speak on behalf of an estate. Thus, only an executor or administrator can execute the account paperwork required to open an estate account.

Finanacial institutions may also choose to close the account and issue a check payable to the estate of the decedent. Because the check is payable to the estate, the heir's bank will often not allow the heir to negotiate or deposit the check into the heir's personal bank account because only an executor or administrator can negotiate a check payable to an estate.

Financial institutions may demand an "EIN" or employer identification number. Financial institutions are under a regulatory obligation to know their customers. The way the institution shows the government that they know their customer is to report the transaction with an EIN. You can only get an EIN from the IRS after you are appointed as the executor or administrator of the estate.

Is there a way around this finanacial red tape? Sometimes an heir can get the financial institution to release the funds directly to the heir listed in the will, effectively bypassing the estate. Typically, the financial institutions that will do this are local and the amounts to be distrubted are small. If the decedent had a small amount at a local bank, you should approach your banker with the idea of probating the will as a muniment of title. Ask if the bank will accept a court-certified copy of the will and the order admitting the will to probate in order transfer the account directly to you. Point out the Texas Estates Code provisions above. To help our clients utilize the muniment of title procedure, the Duran Firm tries to include the Estates Code provisions in its proposed orders admitting will to probate as a muniment of title, though sometimes the courts issue their own orders.

If I choose the muniment of title procedure but need letters testamentary, can I go back to the Court and request them? If you find that there is a need for the appointment of the executor in the will, you can go back to the court and ask for the appointment and the issuance of letters testamentary. You will not have to pay another court filing fee, however, you will have to file a new application, post a new notice ($28), and appear at a second hearing. Because we have to redo everything, we charge a second attorney's fee to redo the entire process. There are some attorneys that will not give their clients the option of a muniment of title proceedure because they believe that something will always come up which requires the appointment of an executor. The Duran Firm believes that the client is in the best position to determine which path to take when pobating the will. Thus, so long as you meet the court's requirements, we are happy to probate a will as a muniment of title only if that is what you want.