Wills & Estates

Question 1

Probate

Answer 1

Judicial proceeding in which the court 1) determines that the decedent left a validly executed wills (or died intestate, in which case heirs are determined) and 2) appoints a personal representative (executor if named in the will, administrator if appointed by the court)

Question 2

Letters Testamentary** (or letters of administration)

Answer 2

Show authority to wind up decedent’s affairs and administer the estate

Question 3

Non-Probate Transfers

Answer 3

Pass by right of survivorship, not through probate

Question 4

Residuary Estate

Answer 4

What remains after administration expenses and debts have been paid and any specific bequests made by the will have been satisfied

Question 5

Requirements of a Duly Executed Will***

Answer 5

Testator must be 18

Signed by testator or by someone at T’s direction and in her presence

Two attesting witnesses over age 14

Each witness must sign in Testator’s presence

No requirement that witnesses know they are witnessing a will, that the testator sign in the witnesses’ presence, that witnesses sign in each other’s presence, or that the testator sign at the foot or end of will)

Question 6

Order of Signing

Answer 6

Does not matter when the execution occurs in on contemporaneous transaction

Question 7

Conscious Presence Test

Answer 7

Testator does not have to be able to actually see the witnesses sign, so long as they are in his presence and he is conscious of what they are doing

Question 8

Proving Wills in Probate

Answer 8

1. Testimony of one attesting witness in open court
2. If all witnesses are dead or unreachable, testimony of two people as to the handwriting of the testator or either attesting witness. (one sufficient if no more can be reached)
3. Self-proving affidavit acts as substitute for live testimony of the attesting witnesses in open court
   a) Two step ceremony - T and Ws sign will, then affidavit
   b) One step ceremony - Attestation clause cites all the elements of due execution, attestation clause is prepared as a sworn statement

Question 9

Proper Venue for Probate

Answer 9

County where decedent resided.

If decedent was not a TX resident, i) county where principal property located, ii) county in which nearest kin resides, or iii) county where died

Question 10

Who can examine contents of safe deposit box?

Answer 10

Spouse, child over 18, or anyone named executor in will.

ONLY IN PRESENCE OF BANK OFFICIAL

Question 11

If Attesting Witness is Beneficiary

Answer 11

Interested witness does not affect validity of will. But bequest to witness is void unless:

1. Will can be proved without interested witness’s testimony
2. OR the interested witness’s testimony is corroborated by the testimony of a disinterested and credible person,
3. OR interested witness would be an heir if will were not probated, in which case interested takes lesser of intestate share and legacy under the will

Question 12

Holographic Wills

Answer 12

Recognized in TX, but must be wholly in testator’s handwriting and signed by testator.

Holographic codicil to typewritten will OK

Surplusage Rule - Extraneous printed words can be disregarded

Question 13

Can a document operative during T’s lifetime be a will?

Answer 13

No, must be intended to take effect at death

Question 14

TX Anti-Lapse Statute

Answer 14

Prevents the lapse of gifts left to beneficiaries who pre-decease the testator

Only applies if there is a will

Pre-deceasing beneficiary must be must be descended of testator’s parent and left descendants who survive testator by 120 hours

Question 15

Class Gifts Rule of Construction

Answer 15

In a gift by will to a class of persons, if a member of the class predeceases the testator, the class members who survive take

Question 16

Rule of Convenience

Answer 16

The Class-Closing Rule of Construction used to define takers of a class gift. The class is closed when some class member is entitled to a distribution

Question 17

Void Gifts

Answer 17

Where a named beneficiary was dead at the time the will was executed. Anti-lapse statute and surviving beneficiaries rules apply.

Question 18

Intestate Succession

Answer 18

Applies where:

1) Decedent left no valid will
2) Will does not make a complete disposition of the estate, or
3) Heir successfully contests the will and will is denied probate

Question 19

Intestate Succession: Surviving Spouse

Answer 19

Community Property - All, unless decedent survived by descendants who were not descendants of the surviving spouse. Then, spouse keeps her half, other half is divided among all children.

Separate Property - 1/3 if decedent left descendants

Question 20

HEF

Answer 20

1. Homestead
2. Exempt Personal Property
3. Family Allowance

“If the home qualifies as a homestead, W is entitled to exclusive occupancy of the homestead for so long as she occupies it. Also, some of the personal property assets may qualify for an exempt personal property set-aside in W’s favor. Finally, if W owns little or no separate property, she can partition for a family allowance in the amount needed for her support up to one year. The exempt personal property set-aside and family allowance come ‘off the top’ of the estate before the intestate distribution is made.”

Question 21

Do children born out of wedlock inherit from their natural father?

Answer 21

No, unless there is a presumption of paternity under the family code

1. Child born during or within 300 days of marriage
2. Parties married after child’s birth and man voluntarily asserted paternity in a record filed with the BVS, or by consenting to be named the father on birth certificate, or by promising to support the child
3. During first two years of child’s life, he resided with the child and represented to others the child was his

OR: Man signed sworn statement acknowledging paternity

OR: Paternity established by suit

OR: Paternity established in probate proceedings

Question 22

Inheritance Rights of Adopted Children

Answer 22

Adoption establishes parent-child relationship for all purposes.

Adopted child can still inherit from natural parents unless inheritance rights were expressly terminated in the decree terminating the parent-child relationship

Person adopted as adult cannot inherit from biological parents.

Question 23

Posthumous Children

Answer 23

No right of inheritance accrues unless the person was born before or was in gestation at the intestate’s death and survived for at least 120 hours.

A person is presumed to have been in gestation if born within 300 days of the intestate’s death.

Question 24

120-Hour Rule

Answer 24

If heir or beneficiary passes within 120 hours (or 5 days) after you die, they are treated as if they predeceased you for purposes of inheritance.

Does not apply if will requires survival, covers simultaneous death, or deaths in a common disaster.

Applies to life insurance policies and joint and survivor bank accounts. Also to property held in joint tenancy with right of survivorship. In effect, treated as a tenancy in common: One-half passes as though the one joint tenant survived, one-half passes as though the other joint tenant survived.
*To trigger right of survivorship, one party must survive the other by 120 hours

Question 25

Disclaimer by Heir or Beneficiary

Answer 25

Must be in writing, signed, describe the interest being disclaimed, and delivered to decedent or personal representative.

No time limit on making disclaimer.

Estate acts as though disclaimant predeceased the decedent

Question 26

Lifetime Gifts in TX

Answer 26

Not treated as advancement (contra, common law) unless:

1) declared as such in a contemporaneous writing by the donor, or
2) Acknowledged as such in writing by the donee

Question 27

Half & Half Rule

Answer 27

Applies to decedent’s property right in the unauthorized commercial use of his name or likeness.

Party making unauthorized use can be liable for damages, profits obtained, exemplary damages, and attorney’s fees.

Recovery goes 1/2 to surviving spouse and 1/2 to descendants

Question 28

What if testator marries after will is executed?

Answer 28

No pretermitted spouse statute, marriage has no effect on will

Question 29

What if testator is divorced after will is executed?

Answer 29

Final decree of divorce or annulment of a marriage revokes all gifts and fiduciary appointments in favor of former spouse and relatives of former spouse. Read as though former spouse and relatives predeceased the testator

Question 30

Pretermitted Child

Answer 30

If no other children when will executed: Chlid takes intestate share of all property not bequeathed to child’s other parent

If there are other children when will executed and they are not provided for: Child takes intestate share of all property not bequeathed to child’s other parent

If there are other children when the will is executed and they are provided for: Child’s share is limited to teh gifts to such other children. Nobody else’s gift is reduced.

Unless child is provided for by nonprobate transfer taking effect at testator’s death or is provided for or mentioned in the will (even if gift is contingent)

Question 31

Dealing with Community Property and a Pretermitted Child

Answer 31

1. Take spouse’s half off table
2. Take money bequeathed to other parent off table
3. How much would child inherit if parent died unmarried

Question 32

Revocation of Wills

Answer 32

A will can be revoked by:

1. A subsequent testamentary instrument that expressly revokes earlier wills, or
2. By physical act

Question 33

Presumptions Regarding Revocation

Answer 33

Where last seen in T’s possession or control but not found after death, presumption: T destroyed by physical act with intent to revoke

Where will last seen in testator’s possession or control is found in torn or mutilated condition, presumption: T revoked by physical act

Presumptions do not arise if will last seen in the possession of someone adversely affected by its contents or if evidence is admissible to rebut the presumption or that will was destroyed by accident

Question 34

3-Point Test to Probate a Lost Will

Answer 34

1. Due execution must be proved
2. Cause of will’s nonproduction must be proved (overcoming presumption of revocation)
3. Contents must subsequently be proved by one who has read the will, heard it read, or can identify a copy

Question 35

Changes made on face of executed will

Answer 35

Plastic overlay rule for holographic codicil

Partial revocation by physical act (crossing out one section) not valid in TX

Question 36

Revival of Revoked Wills?

Answer 36

Not in TX

Question 37

What to do when two wills are found

Answer 37

Later will treated as a codicil to the first and revokes the first only to the extent they are inconsistent.

If wholly inconsistent, first will is revoked by implication.

Question 38

Classes of Testamentary Gifts

Answer 38

1. Specific devise or bequest: “I devise Blackacre to John.”
2. Demonstrative Legacy: General amount from specific source (e.g., “I bequeath $25,000 to be paid out of the proceeds of the sale of my Exxon stock to Sally.”)
3. General Legacy: “I bequeath $10,000 to my nephew, Ned.”
4. Residuary Gift: “I give all the rest, residue, and remainder of my estate to B.”
5. Intestate Property: E.g., partial intestacy because the will does not contain a residuary clause

Question 39

Order of Abatement of Legacies to Pay Debts

Answer 39

1. Intestate property
2. Residuary estate–personal property
3. Residuary estate–real property
4. General legacies of personal property
5. General legacies of real property
6. Specific bequests of personal property
7. Specific devises of real property

Question 40

Bequests of Stock and Other Securities

Answer 40

A specific bequest of stock includes stock produced by a stock split or stock dividend declared after the will was executed, but not cash dividends declared before death, even though not paid until after death

Question 41

Specific Gift of Encumbered Property

Answer 41

For wills executed before Sep. 1, 2005 liens on specifically devised real property are exonerated from residuary estate..

For wills executed on or after Sep. 1, 2005, specifically devised real property is taken subject to any lien, mortgage, etc.

Question 42

Ademption

Answer 42

If specific devise or bequest is not in the estate at the time of testator’s death, the gift is adeemed and the gift fails.

TX applies identity doctrine. Objective test, testator’s probable intent is irrelevant.

Question 43

Incorporation by Reference

Answer 43

An extrinsic document, not present when the will was executed and thus not part of the duly executed will, can be incorporated by reference into the will if:

1. Writing must be in existence when will executed
2. Will must show an intent to incorporate the writing, and
3. Document must be clearly identified by language in the will “such that there can be no mistake as to the identity of the document referred to.”

Holographic will cannot incorporate a typewritten document by reference

Question 44

Acts of Independent Significance (nontestamentary acts) Doctrine

Answer 44

Lifetime act with lifetime motive or purpose is given full effect even though it affects the will

Question 45

Mistakes or Ambiguities in Wills

Answer 45

Latent Ambiguity - Misdescription. Can be cured with extrinsic evidence, but if evidence does not cure, gift fails

Patent Ambiguity - “I bequeath the sum of Twenty-five dollars ($25,000)…” Can be cured with extrinsic evidence.

2015 Statute - Will scan be reforemd to correct a scrivener’s error to conform with the testator’s intent if the mistake is shown by clear and convincing evidence

Wills can also be reformed upon petition by executor if appropriate (i) to prevent impairment of estate’s administration, or (ii) to achieve tax objectives or to qualify beneficiary for governmental benefits

Question 46

Contracts Relating to Wills

Answer 46

A contract to make a will or not to revoke a will “can be established only by (1) provisions in the will stating that a contract does exist and stating the material provisions of the contract, or (2) a binding and enforceable written agreement

If contractual will is established, (i) the new will that purported to revoke the agreed upon disposition under the contractual will is admitted to probate, and then (ii) a constructive trust is imposed in favor of the beneficiaries of the contractual will

Question 47

NonProbate Assets

Answer 47

Pass at death other than by will or intestacy. Not part of the estate for probate purposes.

1. Property passing by right of survivorship
2. Property passing by contract (e.g. life insurance, employee death benefits)
3. Property held in trust
4. Property over which decedent held a power of appointment

Question 48

Words of Disenheritance

Answer 48

Given full effect under 1991 statute.

Distribute estate as though disinherited party predeceased the testator

Question 49

Power of Appointment

Answer 49

Permits life beneficiary to designate the remaindermen

Donee of a General Testamentary Power of Appointment - Is not limited in the class of beneficiaries. Can appoint the property to anyone, including herself, her creditors, or her estate.

Donee of a Special/Limited Testamentary Power of Appointment - Limited in the class of persons to whom she can appoint

Takers in Default of Appointment - Take property on death of donee if the power of appointment is not exercised

Will must expressly exercise power of appointment

To exercise power of appointment, must be a specific reference to the power

Question 50

What must be alleged and proved to show that a testator had sufficient mental capacity to make a will?

Answer 50

Did the testator have sufficient mental capacity to:

1. Understand the nature of teh act he was doing?
2. Know the nature and approximate value of his property?
3. Know the natural objects of his bounty?
4. Understand the disposition he was making?

Evidence of T’s capacity or lake thereof must relate to the circumstances at the time the will was executed

Adjudication of incapacity admissible as evidence of a lack of testamentary capacity, but will not support a directed verdict

Question 51

Who may contest a will?

Answer 51

Only interested parties, including those with an economic interest that would be adversely affected by the will’s probate and heirs under an earlier will who would be defeated if the will was probated

One who accepts benefits under a will is estopped from contesting it, only if he had full knowledge of the facts on which the contest might be based when he accepted the distribution

Question 52

Undue Influence

Answer 52

Existence of testamentary capacity subjected to and controlled by a dominant influence or power. Contestant has the burden of proof and must prove;

1. Existence and exertion of the influencer
2. Effect was to overpower the mind and will of the testator, and
3. Product was will (or gift in will) that would not have been made but for the influence

Mere opportunity or susceptibility to influence not enough. Nor is the mere fact of an unnatural disposition.

Where a will is procured by one in a confidential relationship who benefits from the will, an inference of undue influence exists, and is strengthened when there are suspicious circumstances

Question 53

Gifts to lawyer in will he drafted

Answer 53

Void unless beneficiary was related to testator within third degree of consanguinity or affinity (marriage)

Question 54

No-Contest Clauses

Answer 54

Given full effect unless trial court finds the contest was brought in good faith with just cause

Question 55

Independent Administration

Answer 55

Central feature of TX estate administration law

Wills may name an independent executor, and provide that no action shall be held in the courts other than probate of the will and filing an inventory and list of claims of the estate

Consequence: Will is administered without court supervision or involvement

Authorized by Estates Code when provided for in will or if all distributees agree

Ind. administrator can do without court order whatever a dependent administrator can be authorized to do by court

Question 56

Timeline for Independent Administration

Answer 56

1. Inventory to be filed within 90 days (or affidavit in lieu of)
2. Interested parties entitled to an accounting upon demand after 15 months then every 12
3. Interested party can petition for distribution 2 years after appointment of IE
4. Within 120 days of appointment, IE must:
   a) Post fiduciary surety bond unless waived by will
   b) Publish notice of administration
   c) File inventory
   d) Give notice to named beneficiaries
   e) File certificate that notice to beneficiaries was given

Question 57

For what can IE be removed?

Answer 57

1. Cannot be served with process
2. Has misapplied or embezzled estate funds
3. Failure to post bond
4. Material conflict of interest

Question 58

How can an estate be administered with the least burden and cost without the appointment of a personal representative (IE)?

Answer 58

General Principle: TX favors informal administration of estates, but certain formalities are required where a procedure to clear title is required to recognize ownership rights of successors

1. Probate will as Muniment (link in the chain) of Title (only possible if no unpaid debts other than mortgage on homestead)
2. Statutory Heirship Proceeding - Can provide formal recognition to establish title of successors by inheritance

Question 59

Small Estate Administration

Answer 59

If decedent died intestate and the value of the probate estate (not counting homestead, exempt personal property, and non-probate assets) is less than $75,000, affidavit issued by court clerk serves same function as letters testamentary granted to an executor or letters of administration to administrator.

Party with affidavit can collect decedent’s assets by furnishing a copy of the affidavit.

Affidavit recorded in county where land is located can clear title to D’s homestead

Homestead must be only real property

Question 60

What if subsequently found will revokes gift already granted to beneficiary and sold to BFP?

Answer 60

Beneficiary under new will have an action against initial beneficiary to recover lost damages but cannot set aside the sale if order admitting first will to probate was validly issued

Question 61

When must a will be offered for probate?

Answer 61

Within 4 years, unless party shows he was not in default.

After 4 years, can only be probated as muniment of title, but no personal representative can be appointed and no estate administration can be opened

Question 62

Priority as to who is to be appointed personal representative?

Answer 62

1. Executor named in will
2. Surviving spouse
3. Principal beneficiary named in will
4. Any other beneficiary named in will
5. Next of kin

Minors, incapacitated persons, convicted felons, and people the court finds unsuitable are all disqualified

Question 63

Can a nonresident serve as administrator of a TX estate?

Answer 63

Yes, but must appoint resident agent for service of process

Question 64

Temporary Administrator

Answer 64

Can be appointed for 180 days and have only the powers appointed by the court

Question 65

Compensation of Executors and Administrators

Answer 65

5% in, 5% out rule - Entitled to 5% of all sums actually received or paid out in cash

Does not apply to cash on hand or distributions to beneficiaries or heirs

Question 66

Procedures for Presentment of Creditors’ Claims Against an Estate

Answer 66

Same for dependent or independent administration

1. Notice by publication in newspaper in the county
2. Permissive personal notice to unsecured creditors
3. Mandatory notice to secured creditors by registered or certified mail

In a dependent administration, a general creditor must file an authenticated claim supported by an affidavit with probate court or administrator. Administrator must write a memo of action on claim in 30 days or it is rejected and creditor must file suit within 90 days.

No 90 day requirement for independent administrations

Question 67

Secured Creditors

Answer 67

If decedent was personally liable on a note secured by a mortgage, the creditor can present its claim for payment out of the general assets of the estate, even if teh note is not yet due.

Creditor must file claim as matured secured claim or it will be classified as a preferred debt and lien meaning it can foreclose but is not entitled to a deficiency judgment (but if preferred, has priority over all other claims)

Question 68

Order of Priority for Claims Against Estate

Answer 68

Class 1: Funeral expenses and expenses of last illness up to $15,000

Class 2: Expenses of administration

(IRS claims between 2 and 3)

Class 3: Secured claims to extent covered by lien

Class 4: Child support arrearages

Class 5: State Taxes

Class 6: Claims for repayment of medicaid assistance paid by state

Class 7: Cost of confinement if died in prison

Class 8: All other claims

Question 69

HEF

Answer 69

H - Homestead: Qualifying residence exempt from creditors’ claims

E - Exempt Personal Property Set-Aside: Up to $100,000 of personal property, including auto, furnishings, cattle, etc. (jewelry cannot exceed $25,000)

• -If estate is solvent, exempt property set-aside is only temporary during period of estate administration, after which property passes under will or intestacy.
• -If estate is insolvent, set-aside is permanent

Question 70

Outline procedural steps for sale of real property in a court-supervised administration

Answer 70

1. File application for sale describing property, amount of outstanding creditor’s claims, property on hand available to pay creditors, other facts showing need to sell real estate for authorized purpose: funeral and admin. expenses, debts, family allowance, etc.
2. Date for hearing set, notice given to all persons interested in the estate
3. Hearing held, at which court orders sale and specifies terms
4. Property sold, sale reported to court within 30 days
5. After notice to interested parties, confirmation hearing is held and court affirms sale
6. Personal representative gives deed to purchaser

Question 71

2013 Anti-Forfeiture Statute

Answer 71

Applies to Independent Administration

Secured creditor who elects matured secured claim cannot foreclose on mortgage without approval of independent executor or court approval.

Secured creditor with preferred debt and lien cannot exercise foreclosure rights within first 6 months of administration

Question 72

Consequences of Qualifying as a Homestead

Answer 72

1. Both spouses must join in conveyance or mortgage of homestead property (even if HS is one spouse’s separate property)
2. Free from creditors’ claims, except: (purchase money mortgage lien, taxes on property itself, federal tax liens, MML for improvements on the HS, up to 80% of value of equity in second mortgage)
3. HS passes free of creditors’ claims if survived by spouse or minor child
4. Probate Homestead - Right to occupy HS rent-free for life, or for so long as occupied as a homestead, in favor of surviving spouse or minor children

Question 73

If decedent did not own a homestead (i.e., apartment dwellers)

Answer 73

$45,000 in lieu of homestead

Question 74

Family Allowance

Answer 74

Provides support for surviving spouse and minor children during period when D’s assets are in probate administration.

Permissible Allowance: Amount needed for support for one year (even if survivor earns money and received nonprobate tranfers)

Question 75

TX Proof of Lost Wills Statute

Answer 75

Allows wills to be probated even if they cannot be produced in court, if the will proponent meets a 3-point statutory test:

1. Due execution must be proved as in any other case
2. Testimony must establish the cause of the will’s non-production sufficient to show that the will cannot be produced after diligent search
3. The will’s contents must be substantially proved by the testimony of a credible witness who has read the will or heard it read, or who can identify a copy of the will

Question 76

Under TX Statute, who is entitled to inherit when decedent dies intestate?

Answer 76

Surviving spouse and children to the exclusion of everyone else

Question 77

How can spouses create a joint tenancy with a right of survivorship with respect to community property?

Answer 77

Both spouses must sign the governing instrument

Agreement must specify a right of survivorship. “As joint tenants” is not sufficient to create a survivorship estate.

“Shall vest in and belong to the survivor” or words of like effect are sufficient

Question 78

Options for transferring the assets of an estate to the appropriate heirs:

Answer 78

1. Statutory Heirship Proceeding - An action for a declaratory judgment, which can provide formal recognition to establish title of successors by inheritance without need to appoint a personal representative
2. Order of No Administration - Court may enter an order that no administration of decedent’s estate is necessary if there are no unpaid debts apart from the mortgage and the entire value of the assets–excluding the homestead and exempt personal property–does not exceed the amount to which the surviving spouse, minor children, and adult incapacitated children are entitled as a family allowance
3. Small Estate Administration by Affidavit - Available if intestate decedent’s estate does not exceed $75,000, not including homestead and exempt personal property and there are no debts other than a mortgage on the homestead
4. Probate Will as Muniment of Title - Only an option when a will exists

Question 79

How are life insurance beneficiary designations and joint tenancy dispositions governed?

Answer 79

By the lifetime transfer rule for community property. Spouses may make a reasonable gift of community property without the other spouse’s consent, subject to the fraud on the spouse doctrine. Under the doctrine, a gift may be challenged if it was intended to defeat community property rights. Factors the court considers include:

a. Whether the donee is related to the spouse
b. The amount of the gift relative to the entire community estate
c. Whether the other spouse receives at least that much in other property
d. Whether the gift was the donor’s sole management property