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By: Will Powell Watson

When it comes to settling the affairs of a deceased person, financial institutions (like banks) often require certain legal documents to ensure the proper administration of the person’s estate. In Texas, two common documents that play a significant role in this process are Letters Testamentary and Letters of Administration. Let’s delve into what these documents are and why financial institutions tend to demand them.

Letters Testamentary are issued by a probate court when a deceased person has left behind a valid will (that is, they died “testate). This document grants the executor the legal authority to manage and distribute the assets of the estate according to the terms outlined in the will. Essentially, it serves as proof of the executor’s authority to act on behalf of the estate.

On the other hand, Letters of Administration are issued in two cases:

Most often, Letters of Administration are issued when someone dies without a valid will (that is, they died “intestate”). This document appoints an administrator to oversee the estate’s administration and gives the administrator the authority to distribute the estate’s assets in accordance with the state’s intestacy laws (that is, the laws that determine “who gets what” when a person dies without a valid will). The administrator, typically a close family member, has the authority to handle the estate’s affairs and ensure that assets are distributed to the rightful heirs.

The other instance when Letters of Administration are issued is when all of the named executors in the will either fail or cease to serve. In that event, an administrator is appointed to carry out the terms of the will, much like an executor.

Financial institutions often require Letters Testamentary or Letters of Administration to protect themselves from potential liability. By demanding these documents, they ensure that the person seeking access to the deceased person’s assets has the legal authority to act on behalf of the estate. It helps prevent unauthorized individuals from gaining control over the estate’s funds and assets, thereby safeguarding the rights of beneficiaries and creditors.

Moreover, these documents provide a clear chain of responsibility and accountability. Financial institutions can confidently communicate and transact with the executor or administrator, knowing that they are acting within the confines of the law and with the court’s authorization.

While the requirement of Letters Testamentary or Letters of Administration may add an extra step in the estate settlement process, they serve as crucial safeguards for all parties involved. They protect the interests of beneficiaries, creditors, and financial institutions alike, ensuring that the estate’s affairs are handled correctly and in compliance with Texas law.

If you find yourself in the position of managing a loved one’s estate, it is essential to consult with an experienced probate attorney to understand the specific requirements and procedures related to obtaining these documents. The attorneys at Middleton & Middleton have extensive experience in estate administration and probate matters. Whether you’re dealing with an intestate administration or the probate of a loved one’s will, our attorneys will be there to offer competent guidance each step of the way.