Muniments of Title in Texas

Texas.

That word alone evokes varying images and emotions in everyone’s hearts and minds. Perhaps that word makes you envision rugged landscapes, longhorn cattle, and oil derricks. Or perhaps the historic Alamo and resolute individualism come to mind. In all likelihood; however, you probably won’t think about Muniment of Title.

Like many things unique to our state, Texas is the only state in the nation that allows for a form of probate called Muniment of Title which will transfer both real property and personal property. Although a couple of other states offer this option for probate, they limit Muniments of Title to the transfer of real property only.

What is Muniment of Title exactly?

A Muniment of Title is a probate proceeding that allows for the probate of a Will without the necessity of the appointment of an executor.

The word “muniment” means a document that proves ownership of property.

Having a Will admitted to probate as a Muniment of Title is a way to transfer property and provide a link in the chain of title to the property owned by the decedent with the beneficiaries inheriting under the decedent’s Will.

Why Use a Muniment of Title?

There are many vehicles you can use to navigate through the probate courts in Texas. Typically, Muniments of Title get great gas mileage.

• First, it’s easy and inexpensive.



• Second, it ends with the hearing. There’s no administration; therefore, no duty to prepare an inventory or provide notice to creditors or beneficiaries.
• Third, the recordation of a certified copy of the Will and Muniment Order transfers real property and upon presentation of certified copies to third party fiduciaries, financial assets can be transferred to the beneficiaries inheriting under the Will.



• Fourth, Texas has a four-year statute of limitation on the probate of an estate. If you are past that time period, you can still transfer assets by using a Muniment of Title as long as there hasn’t been any negligence or default.

Muniment of Title Sounds Great! Why not always use it?

Unfortunately, there are limitations on the ability to use a Muniment of Title to probate an estate and careful consideration should be made prior to filing an application for a muniment proceeding. Some key factors to consider are:

• Decedent must have left a valid written will.



• There must be no debts owed by decedent that aren’t secured by liens on real estate or that haven’t been paid prior to the hearing.



• The executor and beneficiaries named in the Will must give their consent to probate as a Muniment of Title and if four years has passed, heirs-at-law must also consent.



• There must be a certainty that no MERP claims will be filed. If a decedent was on Medicaid prior to his or her death, MERP (Medicaid Estate Recovery Program) may be entitled to seek recovery of costs of Medicaid long-term care benefits received by the decedent.



• After a careful analysis of decedent’s assets and financial affairs, there must be certainty that no administration is needed.



• If the statute of limitations has passed on probating an estate, testimony in court must be given that there was no default or negligence in failing to probating the Will within 4 years.

What other factors should be considered before proceeding with a Muniment of Title?

Muniment of Title is a streamlined probate process that is quick, easy, and inexpensive, but before you saddle up your bronco, you should be aware of just how far it can fling you before you wind up flat on your back in the ring. Some good questions to ask before deciding on a muniment of title are:

• How complex are decedent’s financial affairs?



• The more complex decedent’s financial affairs, the more likelihood there will be that an administration will be necessary.



• Did decedent own a business or rental properties?



• If there is income generated by decedent’s businesses or rental properties, there will likely be a need for an administration.



• Did decedent own real property outside the state of Texas?



• If a foreign probate proceeding will be necessary to transfer real property located in other states, a Muniment of Title might not be an option for the estate.



• Will minor children inherit under the Will or are testamentary trusts established according to the terms of the Will?



• Careful consideration should be given to determine whether an executor will need to be appointed to carry out the terms of the will when minor children or testamentary trusts are involved.



• Is the Will a pour-over will (one in which the only beneficiary is an existing trust)?



• A pour-over will into a stand-alone trust is a great tool, but one that will require careful review along with the trust agreement prior to determining if a Muniment of Title is appropriate.



• Are there taxes owed or are there any unresolved IRS issues?
• The IRS generally requires an executor and EIN to resolve pending IRS matters.



• Are there unsecured debts?



• Unsecured debt is not always a deal breaker to the use of Muniment of Title and your attorney should be able to determine if it’s possible to jump the unsecured debt hurdle and still use a Muniment of Title.



• Was decedent on Medicaid?



• If so, generally speaking, an attorney will not proceed with a Muniment of Title.



• Is the distribution scheme in the Will complex, perhaps involving multiple trusts and tax planning?



• Complicated wills increase the likelihood of an administration being necessary.



• Are there fiduciaries located outside the state of Texas or is stock ownership held in companies outside of Texas?



• Because Texas is unique in its broad application of Muniment of Title to transfer financial and other personal assets of decedent, foreign jurisdictions and third parties are often uneducated in its use and therefore prone to reject a Muniment of Title proceeding and require an administration prior to transferring an asset.

Muniment of Title is a great choice for some, but not all

Muniment of Title is a great option for many Wills, but not appropriate in all cases and careful consideration should be used before deciding on its use.

It’s necessary to consult an attorney when considering probate of your loved one’s Will. An experienced and thorough attorney will gather information from you to determine if Muniment of Title the best option to probate your loved one’s estate.

At Heights Law Group, we look forward to helping you navigate through the Texas probate courts with empathy and efficiency. If you have any questions or would like to schedule a consultation, please do not hesitate to contact us by calling 832-810-3776 or by emailing us at info@heightslawgroup.com

A huge shout out to our all-star paralegal Shannon Clements for sharing her wisdom in this post!