Exclusive Jurisdiction and the Probate Court

1. EXCLUSIVE JURISDICTION AND THE PROBATE COURT The chief duties of the probate court are to supervise the probate of wills and the administration of estates. The probate process, including the distribution of the estate’s assets, is governed by the Texas Estates Code and the Texas Probate Code. In most cases in Texas, probate is not necessary. However, if a person dies without a will (known as dying “intestate”) or if the property owned by the decedent is worth more than a certain amount, then probate may be necessary. Intestate succession is the process in which a person’s property is distributed to his/her beneficiaries upon death. Preparing an estate prior to death is called estate planning.

2. Parties Respondent: Cherokee County Appraisal Dist. (taxing authorities) Petitioners: Alibe Carter Bailey, and two adult sons, Petitioners William E. Bailey and Robert E. Bailey (heirs of the deceased W.E. Bailey) Facts and Procedural History Specific Circumstances: In 1973, W. E. Bailey died intestate (without a will) in Cherokee County, Texas. He was survived by his wife and two adult sons who are the Petitioners in the present case. His wife was appointed the administrator of the estate because her and her husband owned it has community property. After administration had begun respondents Cherokee County appraisal district filed suit in the District Court of Cherokee County against the Baileys seeking a personal judgment in the amount of $90,608.48 for tax years 1976 – 1986, and foreclosure of tax liens for delinquent property taxes, interest, and fees that accrued subsequent to W.E. Bailey’s death. The Bailey’s filed a “Plea in Abatement and Motion for Dismissal of Cause” which was denied. The District Court rendered a judgment ordering foreclosure of the tax liens but denied the respondents prayer for personal judgment against the Baileys’. The Texas Court of Appeals held that the Baileys’ are personally liable for the taxes and that a District Court has concurrent jurisdiction with the probate court over this case. The Texas Supreme Court held that the estate bears a liability of the taxes that accrued during administration and that the Bailey heirs were not personally liable. This court reversed the judgment of the Court of Appeals and dismissed Respondents’ claim.

3. Are The Surviving Baileys Personally Liable For Taxes The Property Accrued Will In Administration? The Respondents argued that Probate Code §37 stated title to the property vested immediately in the Petitioners upon Bailey’s death and gave rise to immediate personal liability for the subsequent taxes. The court rejected this argument also citing to Probate Code §37 which mandates, under Texas law, during the period of administration the decedent’s estate is in the hands of the executor or administrator and this constitutes a trust estate. Because the administration has exclusive possession and control over the entire state, and is charged with positive duties, he is an active trustee of the trust estate for all matters including dealing with financial institutions.Therefore, the administrator, as a trustee, assumes legal title and is the owner for purposes of taxation and not the heirs.

4. Does the District Court Have Jurisdiction to Hear a Claim Against the Estate? The Texas Probate Code § 5(e) provides that all courts exercising original probate jurisdiction shall have the power to hear all matters concerning an estate. It has been established that the present case constitutes a claim against the estate and not a claim that the Baileys may be held personally liable for. Therefore, the County Court, not the District Court, has vested jurisdiction over the case. The Respondent argued that because the District Court has original probate jurisdiction it has jurisdiction to hear matters concerning the estate as well. However, the Texas Supreme Court rejected that argument because a court with probate jurisdiction may only exercise its probate jurisdiction over matters concerning an estate when a probate proceeding relating to that specific concern is already pending in the court. Takeaways Expenses preservation, safekeeping, and management of the estate will be classified as claims against the estate. (In this case, taxes) due to administration and incurred in the Heirs are not ordinarily personally liable for claims against the estate while the estate is under administration. A creditor of an estate cannot have a personal judgment against heirs or legal representatives of the estate of a decedent. www.san-antonio-probate.com