Estate Administration Basics
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Questions and Answers

What are the two main types of administration for deceased estates?

  • Formal and Simplified
  • Formal and Informal
  • Formal and Independent (correct)
  • Formal and Court-Supervised

    • A Family Settlement Agreement can be used to distribute assets of a deceased estate without the need for formal court proceedings.

    True (A)

    What are the two essential aspects of establishing a new ownership for assets upon a person's death?

    Identifying the heirs and determining the ownership of the decedent's property.

    The primary responsibility of a Personal Representative (PR) is to ______ the deceased's estate.

    <p>administer</p> Signup and view all the answers

    Match the following terms related to estate administration with their corresponding descriptions:

    <p>Exculpatory Clauses = Provisions in a will or trust that release the executor or trustee from liability for certain actions. Formal Administration = Requires court oversight and involves a formal process for estate administration. Independent Administration = Grants the executor or administrator greater autonomy in managing and distributing the estate. Family Settlement Agreement = A written agreement among family members to resolve estate matters without court intervention.</p> Signup and view all the answers

    What is the primary reason for establishing 'necessity' for appointing an executor or administrator?

    <p>To ensure that the deceased's wishes are carried out. (C)</p> Signup and view all the answers

    An executor or administrator is legally obligated to invest the deceased's assets in high-risk investments for maximum return.

    <p>False (B)</p> Signup and view all the answers

    What are the circumstances under which formal administration of a deceased estate may be necessary?

    <p>Formal administration is typically required when there are complex legal issues, significant debt, or disputes among potential heirs.</p> Signup and view all the answers

    What is the consequence of a serious fiduciary breach?

    <p>The fiduciary may be removed from their position. (A)</p> Signup and view all the answers

    Exculpatory clauses can completely relieve a fiduciary from any liability for a breach of trust.

    <p>False (B)</p> Signup and view all the answers

    What is the purpose of appointing a receiver in a fiduciary breach case?

    <p>To administer the estate while the breach is being litigated.</p> Signup and view all the answers

    At common law, exculpatory clauses were generally considered ______ because the law, not the settlor, imposed fiduciary duties.

    <p>unenforceable</p> Signup and view all the answers

    Match the following terms to their corresponding definitions.

    <p>Exculpatory Clause = A provision in a trust instrument that attempts to relieve the trustee from liability for breaches of trust. Receiver = A person appointed by the court to manage an estate during a legal dispute. Surcharge = A penalty imposed on a fiduciary for a breach of trust. Injunctive Relief = A court order that prohibits a particular action. Settlor = The person who creates a trust.</p> Signup and view all the answers

    Modern legal practice allows for exculpatory clauses under certain circumstances.

    <p>True (A)</p> Signup and view all the answers

    Which of the following is NOT a factor that renders an exculpatory clause unenforceable in Texas?

    <p>The trustee was negligent. (D)</p> Signup and view all the answers

    Under Texas law, what is the legal effect of an exculpatory clause that relieves a trustee from liability for profits derived from a breach of trust?

    <p>It is ineffective.</p> Signup and view all the answers

    Which type of property is governed by the law of the domicile?

    <p>Personal property (C)</p> Signup and view all the answers

    Upon the death of the owner (O), heirs retain ownership even after a will is admitted to probate.

    <p>False (B)</p> Signup and view all the answers

    What must the executor do first to initiate the probate process?

    <p>Apply for probate of the will with the appropriate court</p> Signup and view all the answers

    The ______ is responsible for applying for probate of the will.

    <p>executor</p> Signup and view all the answers

    Match the terms with their respective definitions:

    <p>Executor = Person appointed to carry out the terms of a will Beneficiaries = Individuals who receive assets from a will Heirs = People legally entitled to inherit from an estate Probate = The legal process of validating a will</p> Signup and view all the answers

    What is the maximum time frame to bring a suit for breach of fiduciary duty?

    <p>Four years (D)</p> Signup and view all the answers

    An adult beneficiary who is aware of a breach and does nothing has impliedly consented to that breach.

    <p>True (A)</p> Signup and view all the answers

    What are potential consequences for a fiduciary found guilty of breach?

    <p>Denial of compensation, surcharge, or injunctive relief.</p> Signup and view all the answers

    A fiduciary arguing that they acted in good faith during a transaction is claiming a defense related to _____ deal.

    <p>fair</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>Surcharge = Money damages that can include punitive damages Injunctive relief = Court order to do or not do something Affirmation = Explicit or implicit agreement to fiduciary's act Laches = Delay in asserting a legal right leading to waiver</p> Signup and view all the answers

    What does the term 'guilty' imply in the context of breach of fiduciary duty?

    <p>A term used in civil law cases (C)</p> Signup and view all the answers

    Self-dealing by a fiduciary automatically leads to liability under modern practice.

    <p>False (B)</p> Signup and view all the answers

    The statute of limitations for bringing a suit on a breach of fiduciary duty begins when the beneficiary ____ the breach.

    <p>discovers</p> Signup and view all the answers

    What must an applicant prove to the court for letters of administration to be granted?

    <p>The necessity for administration exists (B)</p> Signup and view all the answers

    A bond is usually required for all Personal Representatives regardless of the circumstances.

    <p>False (B)</p> Signup and view all the answers

    What are letters testamentary?

    <p>Letters testamentary are evidence of the executor's authority granted by the court.</p> Signup and view all the answers

    Every Personal Representative must file an ______ of office.

    <p>oath</p> Signup and view all the answers

    What happens if the proponent prevails in establishing necessity?

    <p>The court will admit the will to probate (C)</p> Signup and view all the answers

    The cost of a bond typically comes from the estate's debts.

    <p>False (B)</p> Signup and view all the answers

    What is the purpose of a bond in the context of estate administration?

    <p>To insure the estate against the malfeasance of the Personal Representative.</p> Signup and view all the answers

    What is the only remedy for breach related to fiduciary duty according to the content?

    <p>Breach of fiduciary duty (B)</p> Signup and view all the answers

    A good faith purchaser is liable to the trustee if the trustee exceeds their authority.

    <p>False (B)</p> Signup and view all the answers

    What should a person obtain to avoid inquiry into a trustee's powers?

    <p>A certification of trust or a copy of the trust instrument.</p> Signup and view all the answers

    A person who deals with a trustee in good faith and for fair value is not liable to the trustee or the __________ of the trust.

    <p>beneficiaries</p> Signup and view all the answers

    Match the following Texas Trustee Codes with their descriptions:

    <p>TTC §114.081 = Protection of persons dealing with the trustee TTC §114.0821 = Trust property not liable for personal obligations of trustee TTC §114.084 = Contracts of trustee and plaintiff's rights TEC §402.053 = Independent personal representative administers estate like a trustee</p> Signup and view all the answers

    Which of the following statements is true regarding a third party's inquiry into a trustee's authority?

    <p>They are exempt from inquiring if they deal in good faith. (B)</p> Signup and view all the answers

    No cases have yet stated the need to read the trust instrument to be in good faith.

    <p>True (A)</p> Signup and view all the answers

    What does TTC §114.084 allow a plaintiff to do if a trustee has made a contract within their power?

    <p>Sue the trustee in their representative capacity.</p> Signup and view all the answers

    The __________ is not required to inquire into the extent of the trustee's powers if dealing in good faith.

    <p>person</p> Signup and view all the answers

    What is the role of an independent personal representative as per TEC §402.053?

    <p>To administer the estate like a trustee (A)</p> Signup and view all the answers

    Study Notes

    Administration of Estates Outline

    • Fiduciary Relationship:

      • A decedent's estate - Personal Representative/Heir or Devisee
      • Personal Representatives
      • An Express Trust – Trustee/Beneficiary
      • Who is the Lawyer's Client?
        • Trust/Estate Administration
        • Guardianship
      • Compare Guardianship – Guardian/Ward
      • Third Party Perspective
        • Background
        • Duty of Inquiry
        • Inquiry
        • Personal Liability of Fiduciary
        • Liability of Estate Property
        • Beneficiary's Liability
        • Common Law/Modern Statutes

    • Fiduciary Obligation:

      • Duty to Administer Estate
      • Duty of Loyalty
      • Duty to Account
      • Common Law/Modern Statutes
      • Terms of Controlling Document

    • Fiduciary Litigation:

      • Demand for Accounting
      • Defenses of Fiduciary
        • Law and Fact
        • Consent of Beneficiary
        • Statute of Limitations
        • Laches
        • Affirmation or Ratification
        • Good Faith, Fair Deal
        • When "Guilty" of Breach
          • What does it mean?
          • Denial of Compensation
          • Surcharge
          • Injunctive
          • Removal
      • Exculpatory Clauses

    • Effect of Death on Property & Liabilities:

      • Background
      • Establishing New Ownership
      • Types of Administration
        • Formal Administration
        • When there's no need for Formal Administration
      • Family Settlement Agreements

    • Executors and Administrators:

      • Basics
      • Establishing "Necessity"
      • Court Supervised v. Independent Administration
      • Qualification
      • Duties of PR
      • Investments in Solvent Estate
      • Required Notice
      • Community Property Administration
      • Protection of Family
        • Conflicts of Law
      • Compensation and Indemnification
      • Tax Responsibilities

    • Court-Supervised Administration:

      • Background
      • Powers
        • Inherent v. Express/implied Powers –Marshalling the Assets
        • Handling the Assets
      • Claims Procedure
        • Presentation by Creditor
        • PR “allows” or “rejects”
        • Court “approves” or “disapproves”

    • Independent Administration:

      • When Permitted
      • Comparison with Dependent Administration

    • Trust Administration:

      • The Basics
      • Duties v. Powers
      • Compensation
      • Investments

    • Liability of Estate Property:

      • Contract
      • Tort
      • Beneficiary's Liability

    • Trust Administration, cont.:

    • Other Statutory Fiduciaries:

      • Temporary Administration
      • Other Statutory Fiduciaries

    • Summary Probate Procedures:

      • Community Administration
      • Death of Ward
      • Small Estates Affidavit
      • Order of No Administration
      • Withdrawal from Administration
      • Foreign Wills
      • Temporary Administration

    • Liability of Estate Property (Cont.),

      • Selling Trust Property
      • Contract, cont.
      • Tort, cont.
      • Beneficiary's Liability, cont.

    • Three Bears Case

    • Common Law/Modern Statutes (Cont.),

    • Guardianship, cont.

      • Guardians → still governed by common law
      • Dependent Court-supervised administrator → still governed by common law
      • Trusts

    • Relationship of Lawyer to Trust and Estate:

      • Personal Representative: Executor → named in will. Administrator → appointed by court
      • Trusts: Revocable → created during settlor's lifetime. Irrevocable; Testamentary → created in a will

    • Jurisdiction and Venue:

      • Law of the domicile
      • Choice of Laws
      • Real property
      • Personal property
      • Federal Courts
      • Primary v. Ancillary
      • Nature of Probate Proceedings
      • Venue: In the county where decedent resides

    • Claims Procedure Continued

      • Presentation by Creditor, continued
      • PR “allows” or “rejects”, continued
      • Court “approves” or “disapproves”, and
      • Court “Classifies” Claims

    • Closing the Estate

      • Time limit
      • Action of Court on the Report

    • Specific Property:

      • Homestead exemptions
      • Personal Property exemptions

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    Admin of Estates Outline PDF

    Description

    Test your knowledge on the fundamental concepts of estate administration. This quiz covers essential terms and responsibilities regarding deceased estates, including the role of Personal Representatives and the process of asset distribution. Understand the legal implications and requirements involved.

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