The person who serves as the personal representative in a Texas probate can be personally liable for certain actions or omissions. This includes liability for failure to make distributions.
This is why many personal representatives opt for a dependent administration. But even a dependent administration does not provide full protection. The personal representative can still be personally liable in a dependent administration.
The recent Estate of Brazda, No. 01-18-00324-CV (Tex. App. [Houston 1st Dist.] — 2019) case provides an example, and it highlights how to avoid liability for not making distributions.
The Personal Representative
The personal representative was a probate attorney in Houston. He was appointed to serve as the personal representative for the estate.
The probate was handled as a dependent administration (You can read about dependent administrations here and independent administrations here).
The personal representative asked the probate court to order a distribution of property to the two heirs. The probate court approved the distribution. Six months passed and the personal representative had not made a distribution.
One of the heirs hired another Houston probate attorney, who sent a demand letter to the personal representative to insist that a distribution be made. When no distribution was made, the heir filed a show cause order. The personal representative failed to appear for the hearing.
The Probate Court’s Orders
The probate court entered an order to once again mandate that a distribution be made and found the personal representative liable for not following the order. The probate court ordered the personal representative to pay damages to the heir.
The same day, the personal representative asked the court to reconsider and modify the order. After some time had passed, the probate court entered an order removing the sanction for the personal representative.
The heir appealed, arguing that the time to appeal the original court order had passed by the time the probate court removed the sanction. The appeals court considered this argument, concluding that the time to appeal the court order that imposed the sanctions had already passed. It vacated the court order removing the sanctions.
Texas Estates Code § 360.301
Texas Estates Code § 360.301 imposes liability on the personal representative for failing to make distributions. It says that:
[i]f an executor or administrator neglects, when demanded, to deliver a portion of an estate ordered to be delivered to a person entitled to that portion, the person may file with the court clerk a written complaint alleging:
(1) the fact of the neglect;
(2) the date of the person’s demand; and
(3) other relevant facts.
As noted in the statute, the heir has to file a demand for the distribution. Then the heir has to file a complaint with the probate court, which is treated as a show cause hearing. The show cause hearing is a general hearing whereby the personal representative has to appear and provide some explanation for alleged wrongdoing.
There are not very many reported court cases involving sanctions under Texas Estates Code § 360.301. But as this case shows, the courts enforce the statute as written. Distributions need to be made timely.
This highlights how important it is to make timely distributions, respond timely to demands for distributions, and follow any court order for a distribution timely.
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