What the heck is a Muniment of Title and When Can It Be Used? from Austin Estate Planning Lawyer Liz Nielsen.

Muniment of Title Austin Estate Planning

What is a Muniment of Title?

A Muniment of Title allows a document, such as a Last Will and Testament, to be treated as proof of title to property. This procedure to settle estates is unique to Texas.

A will admitted to probate as a muniment of title serves to act as a link in the “chain” of title that would otherwise not exist by reason of the decedent’s death. In the past, the process was limited to transferring real property, but now can be used to transfer many kinds of estate property under limited circumstances.

The utilize such a proceeding, there must be no need for a formal administration. On the other hand, a muniment of title proceeding can be used to settle an estate more than four years after the decedent passed away, when a formal administration is no longer possible.

Advantages of Muniment of Title

To probate a will in Texas, there is usually a requirement to appoint an estate Executor or Administrator. However, in the limited situations where it is appropriate, a Muniment of Title offers a streamlined process that bypasses the typical administration of a will.

By presenting the will before the probate court, the parties are basically asking the judge to recognize them as owners of the properties designated to them and that no other court action is necessary on the estate. In this instance, the will acts like a deed proving ownership over a particular property.

Because there is no administration, probating a will as a muniment of title can be faster and less expensive than a formal administration. However, since many administrations in Texas are independent of court involvement, the cost savings are often minimal.

Probating a will as a muniment of title is most effective for transferring real property, such as a home or mineral interests. The same cannot be said with respect to bank accounts, financial accounts, or similar assets of the decedent. Since the concept of Muniment of Title is unique to Texas and lawyers representing banks or other financial institutions are often from other states, they frequently do not have a solid grasp of the concept and therefore are not willing to accept it. It is wise to reach out to the financial institution to confirm that they will accept a Muniment of Title before filing an application with the court.

When can Muniment of Title be Used?

Probating a will as a muniment of title is only appropriate in certain limited circumstances. There are a few requirements that must be met:

  • The decedent must have died leaving a valid will.
  • A Texas court must have jurisdiction over the estate of the decedent, and the citation has been served and returned.
  • The estate must have no outstanding debts, except obligations that are secured by liens on the real property.
  • There must be no Medicaid claim against the estate.
  • There must be no need for administration of the estate.

When these requirements are met, the will may be probated as a Muniment of Title in Texas. In addition, the probate proceedings may carry on without the need for appointing an Executor or Administrator of the estate.

Why Might I Want a Muniment of Title?

As an example: A person has died leaving behind real property in Texas in her name. That real property is the only asset of the estate. Now, this property cannot be sold or leased without the decedent’s signature on the legal documents. The name of the decedent must, therefore, be removed from the title in order to allow her beneficiaries to sell or transfer the property. A Muniment of Title allows the beneficiaries of the property to do exactly that.

In a Texas Muniment of Title proceeding, there is no need for the appointment of an Executor. When the court issues an order, it can serve as a legal authority to all the beneficiaries who have a stake in the property belonging to the estate to transfer the property without the need for an estate Executor or Administrator. The beneficiaries have the right to deal with the property as if the title were in their names. Once the court signs and approves the order to admit the will to probate as a Muniment of Title, the order may be used to transfer real estate and other assets that are in the decedent’s name.

What Can Go Wrong?

Unfortunately, as with all probate options, there are times when probating as a muniment of title is not appropriate. For example:

  • You may end up spending more than a full administration, if you pay a lawyer to file a Muniment of Title and the application is rejected because the requirements for probating as a muniment of title are not met (for example, there is an outstanding creditor).
  • Often, an administration is necessary, for example to sell real property prior to distribution to the beneficiaries, to deal with creditors, or to transfer non-real estate assets. In these cases, a Muniment of Title may not be appropriate.
  • As mentioned above, banks are often reluctant to release funds based on a Muniment of Title. The safer option is to seek Letters Testamentary, especially if you are unsure of all of the assets of the estate. Our experience shows that many banks will not accept a Muniment of Title, especially larger banks that are not familiar with this particular probate option under Texas law.

It is important to discuss whether a Muniment of Title action is appropriate with your attorney. Often, the small additional cost of having an executor appointed and obtaining Letters Testamentary is warranted for the peace of mind that the estate administration will be completed in an efficient and timely manner. At Nielsen Law, we help our clients determine what type of probate action is appropriate based on the specific facts of each case.

Nielsen Law PLLC provides family focused estate planning to individuals and families in Austin, Round Rock, Cedar Park, and the Central Texas area. For more information and to learn about our firm, please contact us.