Inventory & Appraisement

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Probate Inventory in Texas

Preparing the inventory is often one of the more challenging tasks for the personal representative for a Texas estate.  

This requires the personal representative to search through the decedent’s records and property to identify any and all property and debts owed to the estate.  This information is then compiled and recorded in a sworn inventory, appraisement, and list of claims (i.e., the “inventory”) that is filed with the court.

What is Included in the Inventory

The inventory must include all property owned by the estate, including:

1. Real estate located in Texas and
2. Personal property, regardless of where the property is located.

This only includes the probate property.  It does not include non-probate property. We covered probate property and non-probate property here.

The inventory has to specify which property, if any, is separate or community property.  We covered separate and community property here.

The inventory must also include the fair market value of each item as of the date of the decedent’s death.

In addition to listing assets, the inventory must include a list of the claims of the estate of which the personal representative has knowledge.  These claims include debts owed to the estate, not debts owed by the estate. Claims by the estate would include pending lawsuits in which the estate may recoup property or receive any award.  

The inventory will also include an affidavit from the personal representative stating that the inventory is true and complete.  

Filing the Inventory

The personal representative must file the inventory within 90 days after being appointed as the personal representative.  The courts will typically grant extensions upon request.

If the personal representative fails to file the inventory timely this can be grounds for removing the personal representative.  The court can also subject the personal representative to a fine of up to $1,000.

Court Review

On the filing of the inventory, the court will approve or disapprove the inventory.  

If the court does not approve the inventory, it will enter an order to that effect requiring the filing of an amended inventory within a period specified in the order not to exceed twenty days after the date the order is entered.

Affidavit in Lieu of Inventory

The inventory is a public document.  This is one of the drawbacks of probate, i.e., that the decedent’s financial affairs are made public.  The affidavit in lieu of an inventory can help in this regard.

Texas law allows the personal representative to file an Affidavit in Lieu of Inventory, which, as its name implies, is filed instead of an inventory.  Instead of a detailed listing of the decedent’s property and claims, the Affidavit just has to say that:

1. all debts, except for secured debts, taxes, and administration expenses, are paid; and
2. all beneficiaries have received a full and detailed, verified inventory.

This option is available:

1. for independent administrations, not dependent administrations;
2. for decedents dying after September 1, 2011; and
3. if there are no unpaid debts at the time the inventory is due, including extensions (except for secured debts, taxes, and administration expenses).

Because most estates have some unsecured debt, this last requirement often dictates whether the Affidavit can be used.  The Affidavit can still be used when there are unsecured debts owed, but they are paid before the due date of the inventory.

The personal representative still has to provide the full and detailed, verified inventory to the beneficiaries of the estate.  The personal representative is also required to provide a copy of this to any interested person of the estate upon request.

Correcting and Challenging the Inventory

The personal representative is required to file a corrected inventory if he discovers omitted property or claims or if the values included in the inventory are determined to be incorrect.  With an Affidavit in Lieu of Inventory, the personal representative is to provide the updated inventory to the heirs and other parties.

An interested party can contest the inventory if it omits property or claims or if it is erroneous.  This should be done before the property is distributed, if possible. The complaint should be filed with a show cause order.  The court will then have a hearing to determine whether the inventory omits property or is erroneous.

Before moving on, we should also pause to consider disclaimers. Disclaimers should be made before property is distributed. Click here to continue reading >>>>

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