When someone passes away, their estate typically goes through the probate process to distribute their assets to heirs or beneficiaries.
In some cases, the personal representative appointed to administer the estate is granted broad powers to manage and distribute assets without court supervision, in what is known as an independent administration.
An independent administration can simplify the probate process and provide greater flexibility, but it requires careful consideration of the circumstances and potential risks involved.
What is an Independent Administration?
The term “independent administration” refers to a probate case in which the personal representative is appointed, but is not supervised by the probate court.
After a person has applied for letters testamentary (or letters of administration) and been qualified as an independent administrator by the court, the personal representative just has to follow the rules set out in either the will (if there is a will) or the Texas Estates Code.
This usually means they just have to file an inventory of the estate’s assets, pay claims, and distribute assets. They do this without any court involvement or supervision, much the same way as trusts are administered.
This is best understood by considering the dependent administration. With a dependent administration, a personal representative is also appointed. The personal representative only has the powers granted to them in the court order that appoints them. These powers are usually very limited. For any other actions, the personal representative has to file into the court and ask permission to perform the actions or to ask the court to enter an order carrying out the action.
What are the Benefits of an Independent Administration?
There are several benefits to an independent administration in a Texas probate case:
- Reduced court supervision: In an independent administration, the personal representative appointed to administer the estate is not supervised by the probate court, which means there is less court involvement and oversight. This can make the probate process faster, simpler, and less expensive.
- Greater flexibility: An independent administrator has broad powers to manage and distribute estate assets without court approval. This can provide greater flexibility to the personal representative to make decisions quickly and efficiently, without the need for court approval for every action.
- Time savings: Because there is less court supervision and involvement, an independent administration can often be completed faster than a dependent administration, which is subject to court supervision.
- Reduced costs: With reduced court supervision and involvement, an independent administration can often be less expensive than a dependent administration, as there are fewer court fees and attorney fees involved.
- Privacy: An independent administration can offer greater privacy to the family, as there are fewer court filings and less public disclosure of personal information.
What Powers Does the Independent Admin Have?
The powers of an independent administrator are broad.
Texas Estates Code Sec. 402.002 provides that “any action that a personal representative subject to court supervision may take with or without a court order may be taken by an independent executor without a court order.”
This means that the independent administrator can basically do just about everything with respect to the estate property. The powers of an independent administrator include anything that is necessary to administer the estate and include the power to sue or be sued, compromise claims, pay creditors’ claims, set aside a family allowance, continue to operate a business that is part of the estate, and make a partial or final distribution of assets to beneficiaries.
The power to sell property warrants further mention. Where a will grants the power of sale to an independent executor, the independent executor may sell real property without court authorization or approval.
If the power of sale is not granted in a will, the independent executor has the power of sale that would be authorized to a personal representative in a dependent administration with court approval; i.e., the right to sell real property for the purpose of paying debts, including funeral expenses and expenses of administration.
Other than this, the independent administrator is only constrained by the rules for not self-dealing, not stealing, etc.
When Should an Independent Administration Be Avoided?
In cases in which the distributees agree, independent administration may be used to administer an estate. However, it may not always be advisable. There are situations when an independent administration may be possible, but should not be used.
For example, independent administration may not be suitable if the estate is significantly indebted. It may not be suitable if one or more of the parties is likely to file a will contest or other challenge. It may not be suitable if an heir or beneficiary is a minor. These are just a few examples.
How is an Independent Administration Created?
There are two ways to create an independent administration. The decedent can create one by providing for this in his or her will. Alternatively, if all of the heirs agree, they can agree to have the probate handled independently.
Created by Language in the Will
Texas Estates Code Sec. 401.001 authorizes a testator to provide for an independent administration of his estate.
Most wills drafted by Texas attorneys include a clause providing for independent administration, such as the following:
I appoint _______________________ as independent executor of my estate to serve without bond, and I direct that no other action shall be had in the probate court in relation to the settlement of the person’s estate than the probating and recording of the will and the return of any required inventory, appraisal, and list of claims of the person’s estate.
Conversely, a will may specifically provide that there shall be no independent administration, although that is rare.
Created by Agreement of the Heirs
Sometimes a decedent’s will names an executor but the will does not provide for independent administration. Or the decedent dies intestate–i.e., without a will.
In such cases, all of the heirs of the decedent may agree on having an independent administration. They have to record this in a written waiver that is filed with the court. The probate court will typically then enter an order granting independent administration and appointing the person, firm, or corporation designated by the heirs as independent executor, unless the court finds that it would not be in the best interest of the estate to do so.
Removing the Independent Administrator
Given the independent administrator’s broad powers, one also has to consider how to remove them if circumstances change or things go awry.
An independent executor may be removed through the court’s own motion or the motion of an interested party.
An executor may be removed without notice when:
(1) the independent executor cannot be served with notice or other processes, or
(2) sufficient grounds appear to support a belief that the independent executor has misapplied or embezzled, or is about to misapply or embezzle, all or part of the property committed to the independent executor’s care.
An executor may be removed with notice if he or she:
- neglects to qualify in the manner and time required by law;
- fails to timely return either an inventory of the estate property and a list of claims;
- fails to make an accounting which is required by law to be made;
- is proved to have been guilty of gross misconduct or gross mismanagement in the performance of the independent executor’s duties;
- becomes an incapacitated person, or is sentenced to the penitentiary, or from any other cause becomes legally incapacitated from properly performing the independent executor’s fiduciary duties; or
- the independent executor becomes incapable of properly performing the independent executor’s fiduciary duties due to a material conflict of interest.
An independent administration is a probate case where the personal representative is appointed but not supervised by the probate court. This type of administration allows the personal representative to administer the estate without court involvement or supervision, provided they follow the rules set out in the will or Texas Estates Code. However, an independent administration may not always be advisable, such as in situations where the estate is significantly indebted.
If you need help with your Texas probate matter, call us today for a FREE attorney consultation at (281) 219-9090.
Our Houston Probate Attorneys provide a full range of probate services to our clients, including independent administrations. Affordable rates, fixed fees, and payment plans are available. We provide step-by-step instructions, guidance, checklists, and more for completing the probate process. We have years of combined experience we can use to support and guide you with probate and estate matters. Call us today for a FREE attorney consultation.
The content of this website is for informational purposes only and should not be construed as legal advice. The information presented may not apply to your situation and should not be acted upon without consulting a qualified probate attorney. We encourage you to seek the advice of a competent attorney with any legal questions you may have.