There are several alternatives to the traditional formal probate of a Will in Texas. When an estate is small and consists only of personal property, the family may consider an informal family settlement. Also, an informal family settlement agreement is an option for settling a potential Will contest and to clear title to property.

In this article, we will discuss informal family settlements and family settlement agreements in Texas. Austin probate lawyer Farren Sheehan can help answer questions and assist families with probate, alternatives to probate, contested Will issues, and family settlement agreements.

Informal Family Settlements as an Alternative to Probate

Informal family settlements are a common alternative to probate when an estate is small and consists only of personal property. This usually occurs when the deceased person only left personal effects such as household furnishings, clothes, and other personal items. If the deceased left a motor vehicle, the family can often obtain a new certificate of title by filing an affidavit of heirship with the county tax assessor’s office.

Family Settlement Agreements as an Alternative to Probate

Under Texas case law, the term family settlement agreement refers to a specific type of settlement agreement, usually entered into when potential beneficiaries and other interested parties are considering contesting a Will’s validity. It is an alternative method of administration in Texas favored by Texas courts.

Generally, when an individual in Texas dies leaving a valid Last Will and Testament, the family or potential beneficiaries can probate the Will relatively quickly and with minimal costs. However, there are times when families and potential beneficiaries to a Will disagree about the validity of a deceased person’s Last Will and Testament, resulting in a potential Will contest. Will contests turn a relatively simple probate of a Will into a complicated court process, and families, along with other potential beneficiaries, will sometimes look for ways to reduce the time, cost, and discord by settling their differences.

Under Texas law, the beneficiaries of a Will may agree among themselves as to the distribution of the property and agree not to probate the Will. An informal family settlement agreement is a way for the parties to agree to the ultimate disposition of the estate without probating the Will in the traditional ways.

Family Settlement Doctrine

Under Texas law, the family settlement doctrine involves three basic principles: the decedent’s right to make a testamentary disposition, the beneficiaries’ right to convey their rights, and balancing those competing rights by requiring an agreement to an alternative distribution plan. Texas cases on the family settlement doctrine support the conclusion that the family settlement doctrine is applicable generally when there is a disagreement on the distribution of an estate and the beneficiaries enter into an agreement to resolve their controversy.

Under this doctrine, beneficiaries under a Will may enter into an agreement not to probate a Will and to divide the assets of the estate in an alternative manner to the one provided by the Will. A family settlement agreement generally requires that all the beneficiaries of a Will be included in the agreement.

Contracting an Informal Family Settlement

Family settlement agreements are contracts between the interested parties. As such, the agreement is governed by Texas contract law. For a contract to be valid in Texas it must contain: an offer, an acceptance, and consideration; in addition, all parties must be over 18 in age or represented by a guardian, and all parties must have the ability to obtain possession of the decedent’s property.

Unlike the traditional probate process, the interested parties will generally conduct most of their meetings with their respective attorneys to generate a mutually agreeable contract. The parties’ attorneys typically draft the contract so that the contract elements are included, the terms of the agreement are clear, and the agreement will have full legal effect and be enforceable.

How a Probate Attorney Can Help

The contesting of a Last Will and Testament and subsequent settlement agreement among family members and potential beneficiaries may become complicated. An experienced probate attorney will review the Last Will and Testament, the decedent’s estate, any challenges to the estate, and the parties involved. The attorney will also interact with other attorneys and draft a settlement contract that ultimately disposes of the estate.

Sheehan Law, PLLC | Austin, TX Probate Attorneys

Attorney Farren Sheehan in Pflugerville is an experienced probate lawyer who can determine how to best proceed with a potential challenge, interact with the other parties’ attorneys, and provide options for the settlement agreement for families in Travis county or the Austin area. If you would like more information, or have any questions regarding probate law in Texas, contact us today by calling (512) 251-4553, or by filling out our online contact form.