One of the most important duties of the personal representative of a Texas probate is to prepare an inventory and appraisement.
The inventory is a document that contains a verified, full, and detailed inventory of all estate property that has come into the possession of the Texas personal representative or of which the personal representative has knowledge.
Pursuant to Texas Estates Code § 309.051, the inventory must:
The personal representative is required to set out in the inventory the representative’s appraisement of the fair market value on the date of the decedent’s death of each item listed in the inventory. Alternatively, if the court has appointed an appraiser for the estate, the personal representative shall determine the fair market value of each item in the inventory with the assistance of the appraiser or appraisers; and set out that appraisement in the inventory.
It is important to remember that the values on the inventory and appraisement are the date of death values.
A list of claims is a complete list of claims due or owing to the estate. The list of claims must be attached to the inventory and appraisement. An example of a claim due or owing to the estate would be if the decedent owned a promissory note and had the right to collect payments on the note from the debtor.
Pursuant to Texas Estates Code §309.052, the list of claims must state:
(1) the name and, if known, address of each person indebted to the estate; and
(2) regarding each claim:
(A) the nature of the debt, whether by note, bill, bond, or other written obligation, or by account or verbal contract;
(B) the date the debt was incurred;
(C) the date the debt was or is due;
(D) the amount of the claim, the rate of interest on the claim, and the period for which the claim bears interest; and
(E) whether the claim is separate property or community property.
The deadline to file the inventory and appraisement is before the 91 st day after the date the personal representative qualifies. The deadline can be extended by the Texas probate court. Read about Texas Probate Deadlines and Timelines.
After the inventory and appraisement is filed, the judge will examine and approve or disapprove the inventory, appraisement, and list of claims. If the Texas probate judge does not approve the inventory, the judge will enter an order requiring the filing of another inventory, appraisement, or list of claims, whichever is not approved, within a time period of 20 days or less. Texas Estates Code §309.054.
In an independent administration, the independent administrator is allowed to file an affidavit in lieu of an inventory, appraisement, and list of claims under certain circumstances. An affidavit in lieu can be filed if there are no unpaid debts, except for secured debts, taxes, and administration expenses, at the time the inventory is due. Texas Estates Code §309.056. The affidavit in lieu must be filed within the 90-day period after the independent executor qualifies.
The affidavit in lieu must state:
that all debts, except for secured debts, taxes, and administration expenses, are paid and that all beneficiaries other than those described by Subsection (b-1) have received a verified, full, and detailed inventory and appraisement.
An independent administrator can be fined for misrepresenting in the affidavit that all beneficiaries so entitled received a verified, full, and detailed inventory and appraisement. Absent a written request by a beneficiary, an independent executor is not required to provide a verified, full, and detailed inventory and appraisement to a beneficiary who:
(1) is entitled to receive aggregate devises under the will with an estimated value of $2,000 or less;
(2) has received all devises to which the beneficiary is entitled under the will on or before the date an affidavit under this section is filed; or
(3) has waived in writing the beneficiary’s right to receive a verified, full, and detailed inventory and appraisement.
If a Texas personal representative or independent administrator fails to file an inventory, appraisement, and list of claims or affidavit in lieu by the deadline, they can be penalized. First, any interested person can apply to have the personal representative cited to file the requirement documents and show cause for the failure to timely file. The court can also do so on the court’s own motion. Then, pursuant to Texas Estates Code §309.057(c):
If the personal representative does not file the inventory, appraisement, and list of claims or affidavit in lieu of the inventory, appraisement, and list of claims, as applicable, after being cited or does not show good cause for the failure to timely file, the court on hearing may fine the representative in an amount not to exceed $1,000.
