Community Property

Informal Administration of Community Property

The determination of whether property is community property or separate property can be a complex matter and is often a source of controversy during the administration of an estate.  In some cases the community property laws can be used to probate the estate. This is accomplished by informally administering community property.

What is Community Property?

Before considering informal administration, one must understand what community property is.  Community property is property acquired by either spouse during the marriage. Community property is everything that is not separate property.  There is a presumption that all property acquired by either of the spouses during marriage is community property.

Separate property is property owned or claimed by the spouse before marriage; the property acquired by the spouse during marriage by gift, devise, or descent; and any recovery for personal injury that does not include recovery for loss of earning capacity.

What is Informal Administration of Community Property?

The Texas Estates Code grants a surviving spouse certain powers over community property when there is no formal probate for the decedent’s estate.  These powers allow the surviving spouse to act with respect to the estate property, which can be used in lieu of a formal probate. Thus the name “informal administration of community property.”

Informal administration of community property is used when there is a surviving spouse, all of the decedent’s property was community property, there are no other non-spouse heirs, a formal probate has not been initiated, and the estate does not include real estate that has to be transferred to a third party.  Informal administration can save the time and expense associated with a formal probate administration.

What Powers Does the Surviving Spouse Have?

The surviving spouse is able to:

  1. Sue and be sued to recover community property;
  2. Sell, mortgage, lease, and otherwise dispose of community property to pay community debts;
  3. Collect claims due to the community estate;  and
  4. Exercise other powers as necessary to:
    1. Preserve the community property;
    2. Discharge community obligations;  and
    3. Wind up community affairs.

For many modest estates, these powers are more than enough to administer the estate.  

If the estate cannot be fully administered with these rules, it may be possible to incorporate a family settlement agreement to cover the other aspects of the probate. That brings us to our next topic, namely, family settlement agreements in Texas probates. Click here to continue reading.  >>>>

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