CASE LAW UPDATE
GERRY W. BEYER
Governor Preston E. Smith Regents Professor of Law
Texas Tech University School of Law
1802 Hartford St.
Lubbock, TX 79409-0004
(806) 742-3990, ext. 302
gwb@ProfessorBeyer.com
www.ProfessorBeyer.com
www.BeyerBlog.com
26th Annual
WILLS AND PROBATE INSTITUTE
South Texas College of Law
September 23, 2011
Houston, Texas
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© 2011 Gerry W. Beyer
revised 8/27/2011
Electronic copy available at: http://ssrn.com/abstract=1932355
TABLE OF CONTENTS
TABLE OF CASES ........................................................................................................................................... ii
I. INTRODUCTION .................................................................................................................................. 1
II. INTESTACY ......................................................................................................................................... 1
III. WILLS.................................................................................................................................................. 1
A. Testamentary Intent................................................................................................................................1
B. Interpretation and Construction – “Nieces and Nephews”..................................................................1
C. Pretermitted Children.............................................................................................................................2
1. “Constructive Birth” and “Provided For” ..........................................................................................2
2. “Otherwise Provided For” .................................................................................................................2
D. Contests ....................................................................................................................................................3
1. Undue Influence.................................................................................................................................3
2. Standing .............................................................................................................................................3
IV. ESTATE ADMINISTRATION .......................................................................................................... 4
A. Venue ........................................................................................................................................................4
B. Appeal.......................................................................................................................................................4
1. Order to Account ...............................................................................................................................4
2. Order of Sale......................................................................................................................................4
3. Admitting Will to Probate and Granting Independent Administration ..............................................4
C. Statute of Limitations..............................................................................................................................4
D. Lost Will – Evidence to Rebut Revocation Presumption .....................................................................5
E. Late Probate – Proponent Not in Default ..............................................................................................5
F. Personal Representative – Qualification ................................................................................................5
G. Inventory..................................................................................................................................................6
H. Creditors – Duty of Personal Representative to Unsecured Creditor ................................................6
I. Recovery for Unauthorized Bank Transactions.....................................................................................7
J. Contempt...................................................................................................................................................7
K. Attorney Fees...........................................................................................................................................8
1. Removal of Personal Representative .................................................................................................8
2. Will Proponent...................................................................................................................................8
V. TRUSTS ................................................................................................................................................. 8
A.
B.
C.
D.
Pro Se........................................................................................................................................................8
Long-Term Leases ...................................................................................................................................9
Attorneys’ Fees ........................................................................................................................................9
Criminal Liability....................................................................................................................................9
VI. OTHER ESTATE PLANNING MATTERS ..................................................................................... 9
A. Joint Account ...........................................................................................................................................9
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TABLE OF CASES
Bailey v. Warren............................................................................................................................................................2
Bowen v. State...............................................................................................................................................................9
Guyton v. Monteau ........................................................................................................................................................5
In re Byrom....................................................................................................................................................................7
In re Estate of Hendler...............................................................................................................................................1, 2
In re Estate of Johnson...........................................................................................................................................3, 8, 9
In re Estate of Perez.......................................................................................................................................................5
In re Estate of Redus......................................................................................................................................................3
In re Estate of Reistino ..................................................................................................................................................1
In re Estate of Rogers ....................................................................................................................................................4
In re Estate of Vrana......................................................................................................................................................8
In re Guetersloh .............................................................................................................................................................8
In re Hudson ..................................................................................................................................................................4
Jarvis v. Feild.............................................................................................................................................................4, 6
Jefferson State Bank v. Lenk .........................................................................................................................................7
Kennemer v. Fort Worth Cmty. Credit Union ...............................................................................................................9
Mohseni v. Hartman ......................................................................................................................................................6
Myrick v. Moody Nat’l Bank ........................................................................................................................................9
Pollard v. Pollard ...........................................................................................................................................................4
Rawlins v. Weaver.........................................................................................................................................................4
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The appellate court reversed.
The court
determined that fact issues exist regarding
whether Testator had testamentary intent when he
placed the handwritten statement on the bottom
of his attested will and thus summary judgment
was improper. The court explained that there are
two interpretations of Testator’s words: (1) a
mere recitation of facts that he is divorced and
has not revoked his will and (2) a statement that
he reviewed his prior will with his divorces in
mind and that his prior will still states his
property disposition desires.
Because both
interpretations are reasonable, the trial court erred
in issuing a summary judgment.
I. INTRODUCTION
This article discusses judicial developments
relating to the Texas law of intestacy, wills,
estate administration, trusts, and other estate
planning matters.
The article covers
approximately twenty cases that were reported
after the cut-off date for Case Law Update, in
South Texas College of Law, Wills & Probate
Institute ch. P (2010). The reader is warned that
not all recent cases are presented and not all
aspects of each cited case are analyzed. You
must read and study the full text of each case
before relying on it or using it as precedent. Writ
histories were current as of August 27, 2011
(KeyCite service as provided on WESTLAW).
Moral: Attorneys should warn clients not to
make self-help changes to their existing wills or
prepare holographic testamentary documents
because the clients may not do so correctly.
The discussion of each case concludes with a
moral, i.e., the important lesson to be learned
from the case. By recognizing situations that
have led to time consuming and costly litigation
in the past, estate planners can reduce the
likelihood of the same situations arising with
their clients.
B. Interpretation and Construction – “Nieces
and Nephews”
In re Estate of Reistino, 333 S.W.3d 767
(Tex. App.—Waco 2010, no pet. h.).
For summaries of cases decided after the closing
date for this article, please visit my website at
www.ProfessorBeyer.com and click on the
“Texas Case Summaries” link.
Testator’s will established a trust for his daughter
with the remainder passing to his “nieces and
nephews who shall be living * * * per capita”
upon his daughter’s death. A dispute arose as to
whether descendants of predeceased nieces and
nephews were entitled to share in the distribution.
II. INTESTACY
The appellate court examined the language of the
testamentary trust and held that it was
unambiguous and thus the grandnieces and
nephews were not remainder beneficiaries. Just
like the term “children” does not include
grandchildren, the court held that grandnieces
and grandnephews are not included in a gift to
“nieces and nephews.”
[no significant cases]
III. WILLS
A. Testamentary Intent
In re Estate of Hendler, 316 S.W.3d 703
(Tex. App.—Dallas 2010, no pet.).
On the bottom of the last page of Testator’s valid
attested will, the Testator handwrote a statement
in which he indicated that he was now divorced
and that his prior will still exists. The trial court
granted summary judgment that this holographic
material was a valid codicil and acted to
republish the will.
A concurring opinion made the excellent point
that Testator imposed a survivorship requirement
and mandated a per capita distribution. Thus, a
niece or nephew must survive to be a beneficiary.
Testator also mandated a per capita distribution
which is inconsistent with allowing descendants
of deceased beneficiaries to be included as
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beneficiaries (that is, a per stirpes or per capita
with representation distribution).
Testator’s heirs had Testator’s wife not survived.
The court also explained that even if Son Two
was not included in this class gift, he would still
not be entitled to share in Testator’s estate
because he would be limited to sharing in the
contingent gift to Son One as an heir at law.
Because Testator’s wife survived, Son One
received nothing and thus Son Two would
receive nothing as well.
Moral: To avoid confusion, testators should
expressly state whether descendants of deceased
beneficiaries are or are not to be substituted for
deceased beneficiaries. Relying on phrases such
as “who shall then be living” may appear clear
but could lead to litigation.
C. Pretermitted Children
Moral: If a testator wishes to prevent his or her
intended property disposition from being
challenged by children alleging to be
pretermitted, the testator should include an
express provision in the will such as, “I
intentionally make no provision for any
pretermitted child and I intend that pretermitted
children receive nothing from my estate either
under this will or by intestacy.”
1. “Constructive Birth” and “Provided For”
Bailey v. Warren, 319 S.W.3d 185 (Tex.
App.—Tyler 2010, pet. denied).
Testator’s valid will left his entire estate to his
wife but if she did not survive him, to his heirs at
law. Testator had two non-marital children who
claimed they were entitled to his estate as
pretermitted children under Probate Code § 67.
Son One claimed that although he was born
twelve years before Testator executed the will, he
was nonetheless pretermitted because Testator
was not adjudicated as his father until one year
after Testator executed his will. Son Two
claimed he was pretermitted because he was born
after Testator executed the will and is not
provided for even though the contingent
beneficiary of the will was Testator’s “heirs at
law.” The trial court granted summary judgment
in favor of both children.
2. “Otherwise Provided For”
In re Estate of Hendler, 316 S.W.3d 703
(Tex. App.—Dallas 2010, no pet.).
Testator executed a valid will in 1990 leaving his
entire estate to Brother. Testator later had two
children. In 1999, he signed a holographic
statement on the last page of his will indicating
that his prior will still exists. After Testator’s
death, his two children claimed that they were
pretermitted and thus each entitled to half of
Testator’s estate under Probate Code § 67. The
trial court granted a summary judgment rejecting
the children’s claim holding that the codicil acted
to republish the will and thus the children could
not be treated as being born after the date
Testator executed the will. In addition, the court
found that even if the children were pretermitted,
they were otherwise provided for and thus
precluded from sharing in the estate. The
children appealed.
The appellate court reversed. With regard to Son
One, the court rejected the argument that he was
“constructively born” after will execution
because Testator was not adjudicated as his
father until after Testator executed his will.
Instead, once an adjudication of paternity occurs,
Son One is treated as being Testator’s child from
the moment of child’s birth which was twelve
years prior to will execution.
The court determined that the summary judgment
holding the holographic material to be a codicil
was improper. Thus, it is possible, depending on
the outcome of a trial on the issue of the validity
of the holographic statement as a codicil, that the
children were pretermitted. The court then
examined whether one or both of the children
were “otherwise provided for” so they could not
take even if they were determined to be
pretermitted.
The court began its analysis of Son Two’s case
by recognizing that Son Two was a pretermitted
child because he was born many years after
Testator executed his will. However, Son Two
was mentioned or otherwise provided for in
Testator’s will and thus not entitled to a
pretermitted child’s share. The contingent class
gift to Testator’s “heirs at law” encompassed Son
Two as Son Two would have been one of
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the four month trial which supported the jury’s
determination that the elements of undue
influence were satisfied.
The court examined three possible ways in which
Testator provided for his children. First, Testator
paid social security taxes which allowed his
children to receive death benefits. Rejecting the
reasoning in Estate of Gorski v. Welch, 993
S.W.2d 298 (Tex. App.—San Antonio 1999, pet.
denied), the court held that Testator did not
voluntarily supply the social security death
benefits because they are a product of federal law
which mandates the payment of social security
taxes.
Moral: Overturning a jury finding of undue
influence on appeal is difficult. Accordingly, the
will proponent should present the best evidence
at trial.
2. Standing
In re Estate of Redus, 321 S.W.3d 160
(Tex. App.—Eastland 2010, no pet.).
Second, the court rejected the argument that
Testator’s court-ordered child support obligations
were sufficient to show that he had provided for
his children. The support order was rendered by
default and the obligation ended upon Testator’s
death unlike the order in Gorski which was
entered by consent and continued after the
testator’s death.
Proponent One sought to probate Testator’s 2007
will naming Proponent One as the sole
beneficiary. Proponent Two claimed that the
2007 will was invalid and sought to probate
Testator’s 2005 will naming Proponent Two as a
primary beneficiary. The trial court determined
that Proponent Two lacked standing and
dismissed Proponent Two’s action. Proponent
Two appealed.
Third, the court agreed that one of the children
was indeed otherwise provided for because
Testator named him as a contingent beneficiary
on one of his life insurance policies. The court
rejected this child’s argument that a contingent
disposition is insufficient because Probate Code
§ 67(d) states that the disposition may be “vested
or contingent.”
The appellate court reversed. The court began its
analysis by looking at Probate Code § 10 which
requires that a person must have an interest in an
estate to have standing. The court then turned to
Probate Code § 3(r)’s definition of “interested
person.” Even Proponent One agreed that a
beneficiary of a prior will has standing.
However, Proponent One asserted that Proponent
Two failed to introduce important evidence at the
in-limine hearing such as the 2005 will itself,
proof of the elements necessary to probate a
missing will, and evidence to overcome the
presumption of revocation that arises when the
original cannot be produced. The appellate court
explained that Proponent One was commingling
the issues to be decided in an in-limine hearing
with those decided at a trial on the merits. To
establish standing, it was sufficient for Proponent
Two to testify that he was a beneficiary of
Testator’s 2005 will, file a copy of the will, and
present other evidence of the will’s existence and
that he was a named beneficiary (e.g., testimony
from the drafting attorney).
Accordingly,
Proponent Two has standing.
Moral: A court will be reluctant to determine
that a pretermitted child was otherwise provided
for unless it is clear that the testator thought
about providing for the child after the testator’s
death and that the omission from the will was not
because of accident or oversight.
D. Contests
1. Undue Influence
In re Estate of Johnson, 340 S.W.3d 769
(Tex. App.—San Antonio 2011, pet.
stricken).
The jury determined that several of Testator’s
wills and trusts were invalid because they were
executed as a result of undue influence. The
appellate court affirmed. The court began with
an extensive discussion of the law of undue
influence and the leading Texas cases. It then
went through each element of undue influence
reviewing some of the evidence developed during
Moral: The requirements to establish standing
to contest a will or probate a will are significantly
less than the requirements to contest a will
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successfully or to have the will admitted to
probate.
jurisdiction to hear the appeal as the order was
interlocutory and hence non-appealable.
IV. ESTATE ADMINISTRATION
Moral: An order to sell estate property is not
appealable.
3. Admitting Will to Probate and Granting
Independent Administration
A. Venue
Jarvis v. Feild, 327 S.W.3d 918 (Tex.
App.—Corpus Christi-Edinburg 2010, no
pet. h.).
In re Hudson, 325 S.W.3d 811 (Tex.
App.—Dallas 2010, no pet. h.).
Will Contestant requested a jury trial. However,
the trial court heard the application without a jury
and over Contestant’s objection. The court then
admitted the testator’s will to probate and issued
an order granting independent administration.
Contestant then filed a petition for a writ of
mandamus.
Litigant objected to the court’s venue to probate a
will. Because Litigant did not object until
Litigant appealed the admission of the will to
probate, the court held that she waived her venue
argument.
Moral: Objections to venue should be timely
filed or else they will be deemed waived.
The appellate court denied the petition because
Contestant has an adequate remedy on appeal.
The court held that an order admitting a will to
probate
and
granting
an
independent
administration was a final order and thus
appealable.
B. Appeal
1. Order to Account
Pollard v. Pollard, 316 S.W.3d 238 (Tex.
App.—Dallas 2010, no pet.).
Moral: An order admitting a will to probate and
granting independent administration is a final
order which a dissatisfied person may appeal.
Husband obtained an order from the trial court to
require Wife’s independent executor to account
under Probate Code § 149A. The executor had
resisted Husband’s request arguing that Husband
was not an interested person who had standing to
request an accounting claiming that Wife had
successfully divorced Husband prior to her death.
The executor appealed.
C. Statute of Limitations
In re Estate of Rogers, 322 S.W.3d 361
(Tex. App.—El Paso 2010, no pet.).
The trial court found that Decedent died intestate,
determined heirs, and appointed Independent
Administrators in 2006.
In 2009, Friends
attempted to set aside these orders and probate
Decedent’s will. Independent Administrators
claimed that it was too late to challenge the
orders as both the time to appeal and file a bill of
review under Probate Code § 31 (two years from
date of judgment) had elapsed. Friends claimed
that they were within the four year period to
probate a will under Probate Code § 73. The trial
court granted summary judgment in favor of
Independent
Administrators
and
Friends
appealed.
The appellate court dismissed the appeal for lack
of jurisdiction. The court explained that an order
to account is interlocutory and not appealable
because (1) no statute declares such an order to
be final and (2) the order is not part of any
proceeding other than the overall independent
administration of Wife’s estate.
Moral: A trial court’s order to the executor to
account is not appealable.
2. Order of Sale
Rawlins v. Weaver, 317 S.W.3d 512 (Tex.
App.—Dallas 2010, no pet.).
The appellate court affirmed.
The court
recognized that normally a will proponent has
four years from the date of the testator’s death to
probate the will. However, Probate Code § 73
The trial court granted Executor’s order to sell
specified real property of the estate. An appeal
followed. The appellate court held that it lacked
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E. Late Probate – Proponent Not in Default
does not address the situation where the court has
already entered a final judgment that the decedent
died intestate. Friends had the options of
appealing the trial court’s judgment or filing a
bill of review. Because Friends did neither in a
timely manner, they are barred from setting aside
the judgment.
In re Estate of Perez, 324 S.W.3d 257
(Tex. App.—El Paso 2010, no pet. h.).
Wife attempted to probate Husband’s will
approximately ten years after his death. Both the
trial and appellate courts determined that she was
“not in default” under Probate Code § 73(a) for
probating Husband’s will until after four years
from his death. Wife had limited financial
resources and could not afford to probate the will
timely. She also testified that she was relatively
uneducated having only attended grade school.
She explained that she believed it was
unnecessary to probate Husband’s will and did
not know about the four year time limit. Once
she realized she needed to probate the will to stop
the claims of Husband’s children, she filed the
will for probate within thirty days. Accordingly,
the court held that she exercised reasonable
diligence and was not in default.
Moral: A
person
dissatisfied
with
a
determination of heirship should timely appeal or
file a bill of review.
D. Lost Will – Evidence to Rebut Revocation
Presumption
In re Estate of Perez, 324 S.W.3d 257
(Tex. App.—El Paso 2010, no pet.).
Testator died after executing two wills: one in
1975 leaving his estate to his Children and
another in 1993 leaving his estate to his new
Wife. Wife was successful in having the 1993
will admitted to probate even though she could
not produce the original. Children appealed.
Moral: A court may be very willing to accept
excuses for not probating a will timely such as, “I
could not afford it” or “I did not know better.”
The appellate court affirmed. After reviewing
Probate Code § 85, the court reviewed the
evidence and determined that it was sufficient to
overcome the presumption of revocation that
arises when the original will cannot be produced
in court.
The evidence the court found
determinative included (1) Testator never asked
his attorney to revoke the 1993 will or to make a
new will, (2) the keys to the cedar chest in which
Testator placed the will were easily available to
Children before his death, and (3) several
witnesses testified they saw Children remove
items from the chest. However, there was no
evidence that Children removed the 1993 will
and Children testified they did not even know the
will was in the chest.
F. Personal Representative – Qualification
Guyton v. Monteau, 332 S.W.3d 687 (Tex.
App.—Houston [14th Dist.] 2011, no pet.
h.).
At first, the trial court appeared willing to
appoint Daughter as the successor administratrix
even though she had been convicted of a Class C
misdemeanor five years previously. At the
urging of Mother, the court reopened the
evidence and took judicial notice of all matters in
the record. The court then ruled Daughter was
unsuitable due to family discord, hostility, and a
potential conflict of interest. Daughter appealed.
Moral: A testator who wishes to revoke a will
should not rely on revocation by physical act. As
this court stated, only “a scintilla of evidence” is
needed to support a trial court’s determination
that a will proponent has rebutted the revocation
presumption. Thus, revocation by a subsequent
writing is preferable. Or, at least, a testator
should make “a big production” out of revoking
by physical act to create sufficient evidence of
the revocation.
The appellate court reversed.
The court
recognized that there is no legislative or judicial
definition of what causes a person to be
unsuitable to serve as a personal representative
under Probate Code § 78 and thus the trial court
has broad discretion to make that determination.
The appellate court then determined that the trial
court abused its discretion by making an arbitrary
and unreasonable determination of unsuitability
without reference to guiding principles.
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The court explained that the only ground for
disqualification properly before the trial court
was the misdemeanor conviction which the court
rejected. The alleged discord, hostility, and
potential conflict of interest were never placed at
issue but rather were raised by the trial court sua
sponte after the hearing was over and without
giving the parties proper notice. Even if the court
may determine unsuitability sua sponte, the
evidence did not support the court’s ruling. The
court abused its discretion by taking judicial
notice of all documents and testimony in the
dozen years the estate had been litigated.
Judicial notice is only for facts not subject to
reasonable dispute; personal knowledge is not
judicial knowledge.
Litigant’s argument, the court decided to review
the inventory approval because appellate issues
should be liberally construed so the right to
appeal is not lost. After examining the evidence,
the court determined that the trial court did not
err in approving the inventory.
Moral: A person dissatisfied with the court’s
approval of an inventory should take action in a
timely manner and clearly indicate the court
order to which the person is objecting.
H. Creditors – Duty of Personal
Representative to Unsecured Creditor
Mohseni v. Hartman, ___ S.W.3d. ___,
2011 WL 2304133 (Tex. App.—Houston
[1st Dist.] 2011, no pet. h.).
The appellate court also rejected an argument that
if Daughter’s attorney could serve as the estate’s
attorney, then Daughter could not serve and that
estate expenses are less if the personal
representative is an attorney.
A personal
representative, even if an attorney, may recover
reasonable attorney fees. An estate can be
separately charged for both legal and
administrative services even if they are both
performed by the same person.
Unsecured Creditor (UC) sued Independent
Executor (IE) for breach of fiduciary duty,
negligence, fraud, and conversion. UC claimed
that IE’s misconduct caused the estate to lack
sufficient funds to pay his claim. The trial court
granted IE summary judgment ruling that an
independent executor owes no legal duty to an
unsecured creditor of the estate. UC appealed.
The appellate court affirmed holding “that an
independent executor does not owe a general
legal duty of care to the unsecured creditor of an
estate in the management of the estate’s assets.”
The court explained that the executor’s duty runs
to the beneficiaries of the estate. It is the
beneficiaries who have title to the property under
Probate Code § 37 subject to the payment of
debts. The executor thus holds the property in
trust for the benefit of the title holders, not the
creditors. The court made the analogy that a
creditor cannot bring an action against living
debtors who cannot pay their debts because they
mismanage property.
Moral: To show that a person is unsuitable to
serve as a personal representative, “real”
evidence of unsuitability is needed, rather than
speculation and innuendo. To have the greatest
impact, this evidence should be brought forth in
an adversarial context so there is notice and
opportunity to rebut.
G. Inventory
Jarvis v. Feild, 327 S.W.3d 918 (Tex.
App.—Corpus Christi-Edinburg 2010, no
pet. h.).
Litigant appealed asserting that an approved
inventory was incomplete and misstated the value
of the listed property. However, Litigant’s
appeal did not specifically indicate she was
appealing the inventory order but rather objected
to the approval of the account for final settlement
which the court issued many months later.
Litigant argued that the two orders were linked so
the appeal of the account for final settlement
automatically appealed the approval of the
inventory. Although there was no support for
The court also discussed how public policy
supports the court’s holding. To create “such a
duty
would
undermine
independent
administrations and conflict with the executor’s
duty to administer the estate for the benefit of the
heirs and legatees * * *. Also, it could conflict
with the executor’s statutory duties to other
classes of creditors. * * * The creditor’s remedy
is to seek a judgment against the executor in her
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capacity as the estate administrator and seek
execution against the estate[’s] assets.”
has the right to all of the decedent’s business
records and papers under Probate Code § 37.
Moral: An independent executor’s duties run
toward the heirs and beneficiaries, not unsecured
creditors who seek to deprive them of the
property to which they are otherwise entitled.
Moral: A personal representative must examine
bank account statements immediately after being
appointed or else risk that the repose period will
run barring a recovery for unauthorized
withdrawals from the decedent’s accounts.
I. Recovery for Unauthorized Bank
Transactions
Warning: The repose period can run before the
personal representative obtains knowledge of the
account. Thus, the personal representative must
take prompt action to locate all of the decedent’s
accounts. The decedent’s most recent income tax
returns may be helpful in determining the
existence of the accounts.
Jefferson State Bank v. Lenk, 323 S.W.3d
146 (Tex. 2010).
After Decedent’s death in 2000, Fake
Administrator presented Bank with fraudulent
letters of administration and over the next few
months, withdrew most of Decedent’s funds from
the account. In 2003, the court appointed Real
Administratrix.
In February 2004, Real
Administratrix learned about Decedent’s account
at Bank but did not contact Bank until June 2005
when she demanded that Bank recredit the
account for the funds Fake Administrator
withdrew. Bank refused pointing to Business and
Commerce Code § 4.406 which provides a one
year repose period to make claims which had
been reduced to 60 days by contract. Real
Administratrix, however, claimed that the period
did not begin to run until Bank made the bank
statements available. The appellate court held
that Bank’s sending statements to Fake
Administrator and holding the statements at
Bank’s office were insufficient to satisfy its duty
and thus Real Administratrix could recover.
Bank appealed.
J. Contempt
In re Byrom, 316 S.W.3d 787 (Tex.
App.—Tyler 2010, mandamus denied).
Creditor presented Independent Executor with
unsecured claims based on previous probate court
orders stating that the claims were to be paid
from estate funds within thirty days. When
Creditor presented these claims, the thirty days
had already elapsed. Executor rejected both
claims. Two years later, Creditor filed suit to
remove Executor. The trial court removed
Executor from office but did not discharge him.
The court also ordered Executor pay Creditor’s
attorney fees and expenses within thirty days and
to deposit estate property into the registry of the
court. Executor did not comply with these orders
and thus Creditor filed a motion to enforce the
orders by contempt. After hearing evidence, the
court remanded Executor to jail unless he made
the required payments. Because Executor did not
comply, he was confined to jail. After posting
bond, he was, however, released from jail. He
filed for writ of habeas corpus which was denied
and he was again taken to jail. Executor filed for
a writ of mandamus.
The Texas Supreme Court reversed. The court
held that in the context of deceased customers,
“(1) a bank satisfies its burden by retaining
account statements for retrieval by the estate
administrator, and (2) the repose period begins to
run once an administrator is appointed.” Thus,
since Real Administratrix waited until over two
years after her appointment to demand that Bank
recredit the account, her demand came too late
and thus was barred. The court explained that
after a customer’s death, the bank cannot send
statements to the customer and thus retaining the
statements is appropriate. Once a personal
representative is appointed, the time period
begins to run as the personal representative now
The appellate court explained that a person who
willfully disobeys a valid court order is guilty of
contempt and that imprisonment is normally
appropriate.
However, Texas Constitution
Article I, § 18, prohibits a person from being
imprisoned for a debt. After a lengthy analysis of
contempt law, the court concludes that Executor
was held in contempt for failing to deposit funds
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2. Will Proponent
which would be used to pay debts and thus the
contempt order was unconstitutional. Thus, the
court granted Executor’s petition for a writ of
habeas corpus.
In re Estate of Johnson, 340 S.W.3d 769
(Tex. App.—San Antonio 2011, pet.
stricken).
Moral: The ability to have a misbehaving
executor imprisoned for violating court orders is
limited because of the constitutional prohibition
against debtor imprisonment.
The jury determined that will proponents
probated wills (and thus contested other wills) in
good faith and with just cause. The jury then
awarded over $3 million in reasonable and
necessary attorneys’ fees under Probate Code
§ 243. The appellate court affirmed the award
rejecting the argument that the award of fees was
improper because the individual plaintiffs did not
personally pay the fees but that they were instead
paid by trusts created for their benefit. The court
explained that the manner in which attorneys’
fees are paid does not preclude their recovery.
K. Attorney Fees
1. Removal of Personal Representative
In re Estate of Vrana, 335 S.W.3d 322
(Tex. App.—San Antonio 2010, pet.
denied).
The trial court removed Independent Executor
(IE) from office after Beneficiaries proved that IE
breached his fiduciary duties. Beneficiaries then
obtained a judgment awarding them the
attorneys’ fees they incurred in having IE
removed. IE appealed.
Moral: The court may award attorneys’ fees
under Probate Code § 243 even if the claimant
did not personally pay or advance those fees.
V. TRUSTS
The appellate court affirmed. IE claimed that
only an estate is entitled to reimbursement of
attorneys’ fees, not the beneficiaries directly.
The court rejected this argument pointing to
Probate Code § 245 which authorizes the court to
award reasonable attorneys’ fees against the
executor who is removed from office. The
statute is silent with respect to the entity entitled
to recover the fees and thus the statute does not
limit recover of attorneys’ fees to the estate.
A. Pro Se
In re Guetersloh, 326 S.W.3d 737 (Tex.
App.—Amarillo 2010, no pet. h.).
Trustee attempted to represent himself pro se,
that is, without an attorney, in both his capacity
as a trustee and in his individual capacity. The
appellate court held that Trustee had no right to
proceed pro se in his representative (trustee)
capacity but could proceed without an attorney
with regard to claims in his individual capacity.
The court also rejected IE’s claim that the award
of fees was improper because Beneficiaries did
not
segregate
recoverable
fees
from
nonrecoverable fees. The court determined that
the work the attorneys’ performed with respect to
the removal action was inextricably intertwined
with Beneficiaries’ other causes of action against
the IE so that the general duty to segregate did
not apply.
The court explained that allowing Trustee to
proceed pro se in his representative capacity
would be the unauthorized practice of law. The
court stated that “if a non-attorney trustee
appears in court on behalf of the trust, he or she
necessarily represents the interests of others,
which amounts to the unauthorized practice of
law.” The court relied on Steele v. McDonald,
202 S.W.3d 926 (Tex. App.—Waco 2006, no
pet.) in which the court held that a non-lawyer
may not appear pro se in the capacity as an
estate’s independent executor.
Moral: A beneficiary who is successful in
removing a personal representative from office is
entitled to recover reasonable attorneys’ fees
which the beneficiary pays out of his or her own
pocket.
Moral: A trustee who is not an attorney may not
appear in court pro se in the trustee’s
representative capacity.
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B. Long-Term Leases
Moral: The court may award attorneys’ fees
under Trust Code § 114.064 even if the claimant
did not personally pay or advance those fees.
Myrick v. Moody Nat’l Bank, 336 S.W.3d
795 (Tex. App.—Houston [1st Dist.] 2011,
no pet. h.).
D. Criminal Liability
Trustee entered into a lease extending beyond the
termination of the trust.
Beneficiary sued
asserting that doing so was a breach of duty. The
trial court found in favor of Trustee and
Beneficiary appealed.
Bowen v. State, 322 S.W.3d 435 (Tex.
App.—Eastland 2010, pet. granted).
A jury convicted Trustee of misapplication of
fiduciary property valued at over $200,000 under
Penal Code § 32.45. Trustee was then sentenced
to eight years in prison, fined $10,000, and
ordered to pay $350,000 in restitution. Trustee
appealed.
The appellate court affirmed. Section 113.011(b)
of the Trust Code grants the trustee the authority
to “execute a lease containing terms or options
that extend beyond the duration of the trust”
unless the trust instrument provides otherwise.
See § 113.001. The court examined the trust
instrument and found no provision which would
limit Trustee’s ability to enter into a long-term
lease. The court rejected Beneficiary’s argument
that the requirement that Trustee distribute
property to Beneficiary when the trust terminates
operates to prohibit long-term leases.
See
§ 112.052.
The appellate court agreed there was substantial
evidence that Trustee misapplied well over
$200,000 of trust assets.
However, the
indictment specifically stated that these trust
assets were owned by one named beneficiary or
held for her benefit; it did not list all of the
beneficiaries. Because only about $100,000 was
held in trust for the named beneficiary and
because the jury charge did not include a lesser
included offense, Trustee’s conviction was
reversed.
Moral: A settlor who wishes to prohibit longterm leases must expressly so provide in the trust
instrument.
Moral: An indictment for misapplication of
fiduciary property should list all beneficiaries as
the owners of the property and a jury charge
should include a lesser included offense.
C. Attorneys’ Fees
In re Estate of Johnson, 340 S.W.3d 769
(Tex. App.—San Antonio 2011, pet.
stricken).
VI. OTHER ESTATE PLANNING
MATTERS
The jury awarded the successful contestants of
several trusts over $3 million in reasonable and
necessary attorneys’ fees. The appellate court
affirmed. The court explained that Trust Code
§ 114.064 permits the trial court to make the
award in any manner that is “equitable and just.”
The court examined the evidence and found it
sufficient to show that the trial court did not
abuse its discretion or make an award by acting
without reference to any guiding rules or
principles. The court rejected the claim that it is
not equitable or just to award attorneys’ fees in
favor of individuals who did not personally pay
the fees but where the fees were instead paid by
trusts created for their benefit.
A. Joint Account
Kennemer v. Fort Worth Cmty. Credit
Union, 335 S.W.3d 843 (Tex. App.—El
Paso 2011, pet. filed).
Credit Union used a single contract to govern all
of a customer’s accounts opened under the same
membership number. The contract provided that
any joint accounts opened under the contract
would have rights of survivorship. After one
party (husband) to a joint account died, Credit
Union paid all funds in the account to the
survivor (wife). Approximately one year later,
Independent Executor claimed that the account
lacked the survivorship feature because the
specific account lacked its own survivorship
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agreement. Accordingly, the executor asserted
that the estate was entitled to one-half of the
account because the account contained
community property. The trial court granted
summary judgment in favor of Credit Union and
Independent Executor appealed.
The appellate court affirmed. The court found
that the language of the contract which both
husband and wife signed governed all of the
accounts they had in Credit Union whether they
were open at the time they signed the agreement
or thereafter.
Note: The court reached an issue which was not
necessary to decide, that is, whether the account
had the survivorship feature. Credit Union was
entitled to pay any party to the joint account any
part of or all of the funds in the account under
Probate Code § 445.
The court failed to
distinguish between ownership of the funds in the
account and the ability to withdraw those funds.
Even if the account lacked the survivorship
feature, Credit Union had the authority to pay all
funds in the account to the surviving joint party.
Moral: A financial institution may rely on one
account contract to govern multiple accounts.
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