PROBATE EVOLVING ISSUES AND TITLE COMPANY ...Probate: Evolving Issues and Title Company Requirements...

2010 TEXAS LAND TITLE INSTITUTE ‐ PROBATE – EVOLVING ISSUES

PROBATE – EVOLVING ISSUES AND TITLE COMPANY REQUIREMENTS

Texas Land Title Institute December, 2010

Bruce L. Goldston Vice President and Regional Counsel

WFG National Title Insurance Company 613 NW Loop 410, Suite 150 San Antonio, Texas 78216

(877) 366‐8781 [email protected]

BRUCE L. GOLDSTON

Vice President and Regional Counsel South Central Region

WFG National Title Insurance Company 613 NW Loop 410, Suite 150 San Antonio, Texas 78216

(877) 366‐8781 (210) 444‐9473 (FAX)

Professional:

Mr. Goldston was in private practice for 15 years, where he concentrated on real estate, probate and commercial matters. He subsequently handled commercial and real estate litigation for the Federal Deposit Insurance Corporation for 3 years. In 1996 he joined Alamo Title Insurance as Claims Counsel where he supervised the administration and resolution of all claims which arose from policies issued by Alamo Title in Texas and New Mexico. In July, 1998, he became Underwriting Counsel for Fidelity National and Alamo Title, and in 2009 he was named State Counsel for Texas and Oklahoma. He joined WFG National Title Insurance Company as Vice President and Regional Counsel of the South Central Region in March, 2010, where he manages underwriting and educational activities. Education:

Austin College

Sherman, Texas BA 1972 St. Mary’s University School of Law

San Antonio, Texas JD 1975

Training/Speaking Experience:

Mr. Goldston has spoken over 240 times on title insurance, underwriting, claims and legal issues. Some of the topics he has covered include:

Introduction to Title Insurance Manufactured Housing Avoiding and Administering Claims Examiners’ Training Current Underwriting Issues Insuring Around Home Equity Lending Insuring Construction Transactions Legislative Updates Probate and Intestate Succession Bankruptcy Ethics for Title Company Employees Reverse Mortgages Voluntary and Involuntary Liens Taxes and Title Insurance Escrow and Indemnity Agreements Marital Rights Business Entities Foreclosures Homesteads Minerals and Title Insurance Title Policy Endorsements

Probate: Evolving Issues and Title Company Requirements

Bruce L. Goldston WFG National Title Insurance Co. San Antonio, Texas

Sales by Independent Executors

Sect. 331. Court Must Order SalesSect. 341. Application for Sale of Real Estate

Pay expenses and claimsIn best interest of the estatePerish, waste, or deteriorateProperty incapable of partition

2010 TEXAS LAND TITLE INSTITUTE

Property specifically devised.Consider requiring:

Devisees to join in the deed.Devisees execute a ratification.


Sect. 332 Sales Authorized by WillDebts of the estate create implied power of sale.

Indicate those facts on the deed.Obtain affidavit from IE that specific debts will be paid.


Sales by Independent Administrators

Sect. 145 Creation of Independent Administration

Does IA have a greater power of sale than an IE?

HB 3085Sect. 177F. Granting Power of Sale by AgreementSect. 177K. Power of Sale.


Sales by an IARequire that application and order grant the power of saleRequire the IA to satisfy the 4 step processRequire heirs/devisees to join in the deed or sign ratifications


Minors in Title

Gift deeds to minorsTake exception to disabilities of minority.Require donor to acknowledge complications of vesting a minor with title.


Pretermitted Children

Born to or adopted after the will was signed, and not provided for in the will or otherwise

Require resolution of any claim by a pretermitted child, or require joinder or a ratification.


Disclaimers

If valid, property will pass as if the disclaimant pre deceased the decedent

Within 90 days after decedent’s deathCannot disclaim and direct title too

Technical errorSubstantive error


The disclaimant must have had knowledge of what was being disclaimed

Be cautious with blanket devises and blanket disclaimers


Wills and Divorce

Sect. 69 treats a divorced spouse as if he/she had predeceased the testatorStatute amended in 2007 after Nash case

Which version was in force when will was executed?


Life (Estates), Death and Taxes


Reciprocal Post Mortem Deeds

Sect. 5.041 “A person may make an inter vivos conveyance of an estate of freehold or inheritance that commences in the future, in the same manner as by a will.”Terrell v. Graham


Joint Wills

Sect. 59A Contracts Concerning Succession

They must comply with the statute if executed on or after September 1, 1979


JTWROS

Sect. 451 and Sect. 452.Holmes v. Beatty

Held that a joint tenancy by definition includes a right of survivorshipBe sure there is an ‘agreement’


He Who Hesitates Loses in Court

Sect. 73. Period for Probate4 years after date of death “not in default”

Kamoos v. WoodwardRothrock EstateBe careful if a will was recently probated more that 4 years after date of death.



2010 TEXAS LAND TITLE INSTITUTE – PROBATE – EVOLVING ISSUES Page i

Table of Contents

I. SALES BY PERSONAL REPRESENTATIVES – INDEPENDENT EXECUTORS........................................ 1

II. SALES BY PERSONAL REPRESENTATIVES – INDEPENDENT ADMINISTRATORS ............................. 2

III. MINORS IN TITLE ........................................................................................................................... 4

IV. PRETERMITTED CHILDREN ............................................................................................................ 5

V. DISCLAIMERS................................................................................................................................. 6

VI. WILLS AND DIVORCE ..................................................................................................................... 7

VII. LIFE (ESTATES), DEATH AND TAXES............................................................................................... 8

VIII. RECIPROCAL POSTMORTEM DEEDS............................................................................................ 10

IX. JOINT WILLS................................................................................................................................. 10

X. JTWROS (NEW AND IMPROVED)................................................................................................. 11

XI. HE WHO HESITATES LOSES IN COURT......................................................................................... 12

2010 TEXAS LAND TITLE INSTITUTE – PROBATE – EVOLVING ISSUES Page 1

PROBATE - EVOLVING ISSUES

AND TITLE COMPANY REQUIREMENTS

Bruce L. Goldston WFG National Title Insurance Company

San Antonio, Texas I. Sales by Personal Representatives – Independent Executors A. It is commonly said that “an independent executor can do anything without a court order that an administrator can do with a court order.” When can a dependent administrator sell?

Sec. 331. COURT MUST ORDER SALES. Except as hereinafter provided, no sale of any property of an estate shall be made without an order of court authorizing the same. The court may order property sold for cash or on credit, at public auction or privately, as it may consider most to the advantage of the estate, except when otherwise specially provided herein.

Sec. 341. APPLICATION FOR SALE OF REAL ESTATE. Application may be made to the court for an order to sell property of the estate when it appears necessary or advisable in order to: 1. Pay expenses of administration, funeral expenses and expenses of last sickness of decedents, and allowances and claims against the estates of decedents. Sect. 341(1) 2. Dispose of any interest in real property of the estate of a decedent, when it is deemed to the best interest of the estate to sell such interest. Sect. 341(2) 3. Sell property that is liable to perish, waste, or deteriorate in value, or that will be an expense to the estate. Sect. 333(a). 4. To sell property that is incapable of partition in kind. Sect. 149B(b).

B. Does this present off‐record limitations on the ability of an IE, acting under a testamentary “power of sale provision” to sell real property?

C. Should the deed recite why the IE is selling the property?


Title Company Requirement: If the property is specifically devised, you should consider requiring the devisee(s) to either join in the deed as a grantor or execute a sworn ratification of the sale by the IE.

D. Section 332 of the Texas Probate Code authorizes an Independent Executor to sell real property if a will authorizes a sale by the executor.

Sec. 332. SALES AUTHORIZED BY WILL. Whenever by the terms of a will an executor is authorized to sell any property of the testator, no order of court shall be necessary to authorize the executor to make such sale, and the sale may be made at public auction or privately as the executor deems to be in the best interest of the estate and may be made for cash or upon such credit terms as the executor shall determine; provided, that when particular directions are given by a testator in his will respecting the sale of any property belonging to his estate, the same shall be followed, unless such directions have been annulled or suspended by order of the court.

E. Sometimes a will provides that the executor is to have “all the powers of a trustee.” Since a trustee has the inherent power of sale, a will which gives the executor “all the powers of a trustee” is sufficient to confer a power of sale. Texas Property Code, Sect. 113.010. Gatesville Redi‐Mix, Inc. v. Jones, 787 SW2d 443 (Tex.App.Waco 1990, writ denied). F. An independent executor has the authority to sell estate property for the purpose of paying expenses of administration, funeral expenses, expenses of last illness, allowances, or claims against the estate, even if the will does not confer an explicit power of sale. Roy v. Whitaker, 48 SW 892 (Tex. Sup. 1898), modified, 49 SW 367, Tex. Sup. 1899). The existence of these types of debts vests the independent executor with an implied power of sale.

Title Company Requirement: The grantor of such a deed should be: “George Burns, Independent Executor of the Estate of Gracie Allen, Deceased, pending in the Probate Court of Bexar County, Texas, No. 2010‐PC‐9999, acting for the purpose of paying debts of the Estate.” Title Company Requirement: The closer should also obtain an Affidavit from the IE specifying which debts will be paid from the proceeds.

II. Sales by Personal Representatives – Independent Administrators A. Section 145 of the Probate Code governs the application for and appointment of independent administrators. They may be appointed in multiple situations, whether the decedent died intestate or testate.


B. Some attorneys believe that the Independent Administrator can sell real property of the estate without court approval and without the joinder of heirs or devisees. Often we are referred to the "no further action" wording in Section 145(h). Some probate courts agree.

Section 145(h) states that " . . . further action of any nature shall not be had in the county court except where this code specifically and explicitly provides for some action in the county court."

C. Section 331 specifically and explicitly requires court approval to sell real property.

Sec. 331. COURT MUST ORDER SALES. Except as hereinafter provided, no sale of any property of an estate shall be made without an order of court authorizing the same. The court may order property sold for cash or on credit, at public auction or privately, as it may consider most to the advantage of the estate, except when otherwise specially provided herein.

D. Does an IA have a power of sale that is greater than an IE who is acting without a testamentary power of sale? E. HB 3085 was introduced during the 2009 regular session of the Texas Legislature. The following sections deal with the power of sale.

Sec. 177F. GRANTING POWER OF SALE BY AGREEMENT. In a situation in which a decedent does not have a will or the will does not contain or insufficiently contains language authorizing the personal representative to sell real property, the court may include in an order appointing an independent executor … such general or specific authority regarding the power of the independent executor to sell real property as may be consented to by the beneficiaries who are to receive any such real property in their consents to the independent administration. The independent executor, in such event, may sell the real property under the authority granted in the court order without the further consent of those beneficiaries. (Emphasis supplied)

Sec. 177K. POWER OF SALE. (a) General. (1) An independent executor has the power of sale set forth in the will, if applicable, exercisable without court approval as otherwise provided for independent administrations. (2) Unless limited by the terms of a will, an independent executor has, in addition to any power of sale given in the will, the same power of sale for the same purposes as personal representatives have in a supervised administration, but without the requirement of court approval. The procedural requirements applicable to a supervised administration do not apply. (b) Protection of Person Purchasing Estate Property. (1) A person who is not a devisee or heir is not required to inquire into the independent executor's power


of sale or the propriety of the exercise of the power of sale if the person deals with the independent executor in good faith and: (A) a power of sale is granted to the independent executor in the will or in the court order appointing the independent executor; or (B) the independent executor provides an affidavit, sworn to under oath and recorded in the deed records of the county where the property is located, that the sale is necessary or advisable for any of the purposes described in Section 341(1) of this code. (2) As to acts undertaken in good faith reliance, the affidavit executed by the independent executor and described by Subsection (b)(1)(B) of this section is conclusive proof, as between a purchaser of property from an estate, and the personal representative of an estate or the heirs and distributees of the estate, with respect to the authority of the independent executor to sell the property. The signature or joinder of any person who is a devisee or heir and who has an interest in the property being sold as described in this section is not necessary for the purchaser to obtain all right, title, and interest of the estate in the property being sold. (Emphasis supplied) . . . Title Company Requirement: Require that the application and order grant the IA power of sale. Title Company Requirement: Require the IA to comply with the 4 step process, if the probate court will entertain the application. Title Company Requirement: If the court will not entertain the application, require the devisees or heirs to join in the deed or execute sworn ratification agreements.

III. Minors in Title

A. Many situations can result in vesting title to real estate in the name of a minor. Minors are often heirs of intestate decedents, or devisees in wills. In testamentary situations, prudent will drafting will avoid the problem by establishing trusts to hold title on behalf of minors. B. From time to time the title professional will be asked to close a transaction wherein, through inter vivos transfer, title will vest in a minor. Since a minor can hold title, it is doubtful there is anything improper about insuring such a transaction.

Title Company Requirement: When issuing an owner policy to a minor who has received property by inter vivos gift, take a Schedule B exception for the disabilities of minority.


Title Company Requirement: The title company should consider requiring the donor to acknowledge that difficulties may ensue if the minor wants to deed or mortgage the property before reaching the age of majority.

C. For sales by a minor, Probate Code Sect. 889 is most helpful, but it is limited to situations where the minor’s interest in the property does not exceed $100,000.00. Beyond that, a formal guardianship may be required. D. The legislative amendments that increased the monetary limit to $100,000.00 also removed the language in Section 889 that referred to title derived from an estate. There is nothing in the section now that prohibits its use in situations where a minor acquired title other than through a decedent’s estate. E. Lastly, a “Management Trust” for an incapacitated person under Probate Code Sect. 867 may be another option. Although the statutorily permitted applicant is usually the guardian of the ward (person or estate or both) or an attorney or guardian ad litem, the applicant may also be “a person interested in the welfare of an alleged incapacitated person who does not have a guardian of the estate.” Sect. 867(a‐1)(5). Third parties holding property belonging to the person are ordered to turn it over to the trustee. Sect. (f). The trustee of a Management Trust apparently has the power of sale. Sect. 869B. IV. Pre Termitted Children (When Born is Not Born) A. These are children born to or adopted by the testator after the will was executed. Sect. 67. This includes a non marital child born after the will was executed. Estate of Gorski v. Welch, 993 SW2d 298, 304 (Tex.App. – San Antonio, 1985, pet. denied). In order for consequences to follow the existence of a pretermitted child, the child must not be provided for in the testator’s will, or otherwise. The statute addresses three situations, one of which will apply:

a. The testator had no other children when the will was executed. Sect. 67(a)(2).

b. The testator had other children when the will was executed and the will made provision for them. Sect. 67(a)(1)(B)

c. The testator had other children when the will was executed and the will did not make provision for them. Sect. 67(a)(1)(A)

B. Kevin Bailey’s life progressed as follows:


Date Event

August 9, 1984 Keith Hodges born Post August 9, 1984 Kevin Bailey married Beth Hodges, Keith’s mother April 27, 1993 DNA established Kevin was Keith’s father July 29, 1996 Kevin executed his will 1997 Court declared Kevin was Keith’s father

November 19, 2006 Kevin Bailey died C. Kevin’s will left everything to his wife, Beth, if she survived him. If she pre deceased, he left his estate to his “heirs at law.” D. Keith’s argument was that he was a pretermitted child because the court did not adjudicate that Kevin was his father until 1997, after Kevin wrote his will, even though he was born in 1984. He claimed that he was not “constructively born” until 1997. The court held that once Keith was adjudicated to be Kevin’s child, he was to be treated as Kevin’s child from the date of his natural birth. Bailey v. Warren, 12‐09‐00277‐CV (Tx.App. Tyler 2010, no pet.)

Title Company Requirement: If there is a claim outstanding of a pretermitted child, exception should be taken to that claim. If that is not acceptable to the insureds, require the claimant to join in the transaction or execute a sworn ratification.

V. Disclaimers A. We care about disclaimers; if done correctly, a property interest that would otherwise vest in an heir or a devisee leapfrogs over that person (or entity) and any clouds against the disclaimant do not attach to the title. The Probate Code provides that any person can execute a disclaimer of a devise, causing the property to vest as it would have if the disclaiming person had pre‐deceased the testator. Texas Probate Code, Sect. 37A(c). B. The most common technical mistake is failing to adhere to the strict time limit established in the Probate Code. C. A common substantive mistake occurs when a disclaimant attempts to disclaim “in favor of” someone. The statue directs what is to happen with the disclaimed interest; the disclaimant has to say so. D. If a devisee attempts to disclaim, but the disclaimer does not technically comply with the statute (for example, the 90 day deadline is missed, or the disclaimer is not acknowledged), the act is ineffective except “as an assignment of such property to those who would have received same had the person attempting the disclaimer died prior to the decedent.” Texas Probate Code, Sect. 37A.


E. What if the disclaimer complies with the statute in all respects, but it is executed “in favor of” a third party?

The disclaimer is effective, but the “assignment” is not. Estate of George E. Peyrot, Sr., Deceased, 2006 Tex.App. LEXIS 6067 (Tex.App. – Fort Worth 2006); Tate v. Siepielski, 740 SW2d 92 (Tex.App. – Fort Worth 1987, no writ).

F. Once the named devisee has taken title, the named devisee can direct the title to a third party:

A person entitled to receive property . . . from a decedent under a will (or) by inheritance . . and who does not disclaim the property . . . may assign the property . . . to any person. Sect. 37B(a).

“An assignment under this section is a gift to the assignee and is not a disclaimer or renunciation under Section 37A of this code.” Sect. 37B(d).

G. If the disclaimer is valid, any liens or claims which were of record against the disclaimant do not attach to the title. 1. The rule is not the same if the US is the claimant. Drye v. United States, 120 S.Ct. 474 (1999). H. “… to be effective, a disclaimer of an inheritance is enforceable against the maker only when it has been made with adequate knowledge of that which is being disclaimed. McCuen v. Huey, 255 SW3d 716, 731 (Tex.App. – Waco 2008, no pet.). I. Beware of blanket devises (such as through the residuary clause) and blanket disclaimers. Was the disclaimant aware of what was being disclaimed? Should you remove that AJ from Schedule C?

Title Company Requirements: Closely examine the will and the disclaimer. If there is no will, examine the order determining heirship.

Title Company Requirements: If the devise was not specific, consider requiring a statement from the disclaimant that he was aware that title to the property passed to him under the will. Make a similar requirement in intestate cases.

VI. Wills and Divorce A. Marvin Nash was married to Vicki in 1994 when he executed his will. He left everything to Vicki, and if she did not survive him by at least 30 days, to his “beloved step‐child, Shelley Rene Tedder.” Marvin and Vicki divorced in 2002, and Marvin died 2 years later without ever changing his will.


B. Section 69 of the Probate Code specifies that if a testator divorces after executing a will, any provisions in favor of the former spouse must be read as if the former spouse pre deceased the testator. Naturally, Vicki argued that the application of Section 69 caused all of Marvin’s property went to her daughter, Shelley. Estate of Nash, 220 SW3d 914 (Tex. 2007).

C. The Texas supreme court agreed with the Nash family; it held that Sect. 69 applied only to will provisions that “favor a former spouse” and has no consequence beyond that. In other words, Sect. 69 could not be used to vest title in Shelley. D. At the time of the Nash decision, Sect. 69 read, in part, as follows:

(a) If, after making a will, the testator is divorced or the testator’s marriage is annulled, all provisions in the will in favor of the testator’s former spouse … must be read as if the former spouse failed to survive the testator, and shall be null and void and of no effect unless the will expressly provides otherwise. (emphasis supplied)

Following the Nash decision, the Legislature amended Sect. 69:

(b) If, after making a will, the testator’s marriage is dissolved, whether by divorce, annulment, or a declaration that the marriage is void, all provisions in the will, including all fiduciary appointments, shall be read as if the former spouse and each relative of the former spouse who is not a relative of the testator failed to survive the testator, unless the will expressly provides otherwise. (emphasis supplied)

E. Suppose Marvin’s will had named the ASPCA instead of Shelley as a contingent beneficiary; would Sect. 69 have worked to vest title in the ASPCA? Probably not under the prior version of Sect. 69, but it would now. F. What if Marvin’s contingent beneficiaries had been his step daughter Rene and his own natural daughter, Claire? Title Company Requirement: Be sure to apply the correct version of Sect. 69, depending on the date the will was executed. VII. Life (Estates), Death and Taxes A. If a decedent dies intestate, leaving a spouse and children, as to decedent’s separate real property, his surviving spouse takes a life estate in 1/3 of the land, with the remainder to be divided among his children. Texas Probate Code, Sect. 38b(1); White v. Hebberd, 89 SW2d 482, 486 (Tex.Civ.App. – 1936, n.w.h. ).


B. If the deceased have a child or children, or their descendants, the surviving husband or wife shall take … an estate for life, in one‐third of the land of the intestate, with remainder to the child or children of the intestate and their descendants. Texas Probate Code, Sect. 38b(1) C. As a life tenant, it is a well recognized rule of law that it is the duty of a life tenant in possession of real estate to pay the ordinary taxes thereon in the absence of some contrary intention manifested by the creator of the life tenancy and remainder. Trimble v. Farmer, 303 SW2d 157, 161 (Tex. 1857). D. We are further of the opinion that under the common law the owner of the life estate is liable for current taxes. Richardson v. McCloskey, 276 SW 680, 681 (Texas Comm’n. App. 1925, opinion adopted)) Sargeant v. Sargeant, 15 SW2d 589, 594 (Tex. 1929). E. We further note that under the common law, the owner of the life estate is liable for current taxes. Copeland v. Tarrant Appraisal District, et al, 906 SW 148, 152 (Tex.App. – Fort Worth, 1995 writ denied). F. If the life tenant does not pay the taxes, the property will be sold for taxes and all title interests will be sold, not just the life estate.

G. When property is redeemed, the result is to put the parties back in their original positions, just as if the tax suit had never been filed. Redemption does not establish new title; it restores the parties to the position they were in before the taxes became delinquent. UMLIC VP LLC v. T & M Sales and Environmental Systems, Inc., 176 SW 3d 595, 606 (Tex. App. – Corpus Christi, 2005, pet den.).

H. An owner who redeems his property does not strengthen his title against other owners or lien holders. Associates Home Equity v. Hunt, 151 SW 3d 559, 562 (Tex. App. – Beaumont, 2004 no pet.). Redemption merely relieves the property of the tax sale; title is restored to what it was before the tax sale. Id., at 562 n. 7.

I. If the fee owner later acquires title from the tax sale purchaser in an arm’s length transaction, that also will result in reinstatement of the Defendant’s life estate. Reynolds v. Batchelor, 216 SW2d 663, 667 (Tex. Civ. App. – Fort Worth 1948, ref’ n.r.e.). The same principle applies when a cotenant purchases from the tax sale purchaser, in which case he will be treated as having only redeemed the property, and this seems to be true even though the last purchase be made after the redemption period but before the cotenants have been evicted from the property. Id.

J. So, how does the owner of the remainder interest get rid of the life tenant who is not paying taxes? How does he get good title?


Title Company Requirements: Require a final judgment from a court of competent jurisdiction terminating all of the life tenant’s interest in the property because of the failure to pay ad valorem taxes.

VIII. Reciprocal Post Mortem Deeds A. Section 5.041 of the Property Code: “A person many make an inter vivos conveyance of an estate of freehold or inheritance that commences in the future, in the same manner as by a will.” B. Terrell v. Graham, 576 SW2d 610 (Tex. 1979) held that when two brothers, E. H. and H. R., executed reciprocal post mortem deeds to each other the instruments will be read together as deeds and not as attempts to make a will. Id., p. 612. The court decided that the intent of the parties was that the survivor would hold the land in fee. “Such conveyance left each grantor with a life estate in his undivided one‐half interest in the land as well as the estate in expectancy conveyed to him by his brother. Id. Title Company Requirements: Compare the deeds to the opinion in the Terrell case. IX. Joint Wills A. Ernest and Velma were married. In 1992 they executed identical, reciprocal wills, that each contained the following clause:

8. Contract With Spouse. I hereby declare that I have an oral and/or written agreement with my spouse as to the disposition which may be made of my property, and property taken under this Will or my spouse’s property upon the death of either of us. We have identical, or legally similar Wills, intending thereby to be contractually bound.

B. When Velma died in 1994, her will was probated. Ernest took Velma’s property under Velma’s will. Ernest executed a new will in 1999; trouble ensued after his death. C. Section 59A of the Probate Code:

Sec. 59A. CONTRACTS CONCERNING SUCCESSION. (a) A contract to make a will or devise, or not to revoke a will or devise, if executed or entered into on or after September 1, 1979, can be established only by: (1) provisions of a written agreement that is binding and enforceable; or (2) provisions of a will stating that a contract does exist and stating the

material provisions of the contract. (b) The execution of a joint will or reciprocal wills does not by itself suffice

as evidence of the existence of a contract.


D. The court held: “The language in the wills fails to expressly recite the consideration exchanged for the contract or state the wills could not be changed or revoked without mutual consent. The language in the wills fails to expressly state the wills are contractual wills under section 59A of the Probate Code.” Ray v. McMaster, 296 SW3d 344, 348 (Tex.App. – Houston [1st Dist.] 2009, no pet). E. Was this the intent of the testator? X. JTWROS (New and Improved) A. Sec. 451. RIGHT OF SURVIVORSHIP. At any time, spouses may agree between themselves that all or part of their community property, then existing or to be acquired, becomes the property of the surviving spouse on the death of a spouse. B. Sec. 452. FORMALITIES. An agreement between spouses creating a right of survivorship in community property must be in writing and signed by both spouses. If an agreement in writing is signed by both spouses, the agreement shall be sufficient to create a right of survivorship in the community property described in the agreement if it includes any of the following phrases: (1) "with right of survivorship"; (2) "will become the property of the survivor"; (3) "will vest in and belong to the surviving spouse"; or (4) "shall pass to the surviving spouse." An agreement that otherwise meets the requirements of this part, however, shall be effective without including any of those phrases. C. In Holmes v. Beatty, 290 SW3d 852 (Tex. 2009), the court addressed the question of whether securities held as “JT TEN” created a JTWROS. The court of appeals held they did not, but the supreme court reversed, holding as a matter of law that “A joint tenancy carries rights of survivorship.” Id., p. 857. “The main difference between a joint tenancy and a tenancy in common is that a joint tenant also has a right of automatic inheritance known as survivorship.” Id. “.. a joint tenancy cannot be held without rights of survivorship; such a joint agreement should be a tenancy in common.” Id., p. 858. “A ‘joint tenancy’ or ‘JT TEN’ designation on an account is sufficient to create rights of survivorship in community property under section 452.” Id., p. 859. Title Company Requirements: Be sure you have an ‘agreement’. Merely taking title as JTWROS or JT TEN is probably not enough.


XI. He Who Hesitates … Loses in Court

A. Probate Code Section 73. PERIOD FOR PROBATE. (a) No will shall be admitted to probate after the lapse of four years from the death of the testator unless it be shown by proof that the party applying for such probate was not in default in failing to present the same for probate within the four years aforesaid; and in no case shall letters testamentary be issued where a will is admitted to probate after the lapse of four years from the death of the testator. . . .

B. In Kamoos v. Woodward, 570 SW2d 6 (Tex.Civ.App. – San Antonio, 1978, writ ref’d n.r.e.), an “impoverished widow” waited 5 years after her husband’s death to probate his will. She did not act earlier, because she did not think it necessary. The estate was valued at $4,000.00. Later, when she learned her husband was heir to royalty interests, she offered the will as a muniment of title. The court held that she was not in default for failing to probate the will within 4 years of her husband’s death.

C. Jerry Rothrock, “a very successful lawyer in Washington, D. C.”, did not offer his father’s will for probate until 14 years after his father’s death. Jerry and his 5 siblings had agreed to not probate the will, which named Jerry sole beneficiary. A land man later told Jerry that his father owned mineral interests in Cherokee County. A month later, Jerry filed to probate the will. In Estate of Rothrock, 312 SW3d 271 (Tex.App. – Tyler 2010 no pet.). “It cannot be said that one who has custody of a will, and refrains for the statutory period from presenting it for probate for mere personal considerations or under the assumption that his title to property is safe without it, is not in default under this statute.” Id., p. 274. Title Company Requirements: Never assume that a will can be probated as a muniment of title if more than 4 years has passed since the date of death. Title Company Requirements: If a will is probated more than 4 years after the decedent’s death, do not insure until the time for appeal has expired.

~ I acknowledge the helpful suggestions I received from the following: Hon. David Hodges; Hon. Ray West; Prof. Gerry Beyer; Paul Holladay; Craig Woodring; Bert Massey, II; Stan Keeton; Betsy Thompson; Brian Watts.

RATIFICATION BY DEVISEES

OF SALE BY INDEPENDENT EXECUTOR / EXECUTRIX Date: GF No. Escrow Agent: Underwriter: Decedent: Cause Number: Executor/rix: Sale Price: Property:

We, the undersigned, being the devisees of the Property under the probated will of Decedent, state as follows: We are aware of the transaction in which the Property is being sold for the Sale Price and we are aware that the conveyance will be made by the Independent Executor /Executrix without our joinder in the deed.

By our signatures below, we each ratify the transaction, and we each waive and

release any claim any of us might have against the Escrow Agent and Underwriter arising out of the fact that the sale and conveyance was made without requiring our joinder on the deed.

We further agree and authorize the Escrow Agent to disburse the net proceeds of

sale to the Independent Executor/Executrix. STATE OF COUNTY OF SWORN TO AND SUBSCRIBED before me by on this the ____ day of , 20__.

Notary Public State of Texas

Dater hiy21,2006

Grantor: MARY JANE PRATT

Grantor's Mailing Addressr

I 1 60 Vy'cst Pecan

Stephenville, Erath County, Texas 76401

Granteer JOHN K. PRATT.'\Grantee's Mailing Address:

i 160 West Pecan


6588e JUL258 oRIGINAL

TilARRANTY DEEDESTATE IN FUTURO

Consideration;

TEN AND NO/100 DOLLARS and in kind consiileration of areciprocal conveyance,executed simultaneously and in conjunction r+'ith this instrument, to Grantor byGrantee of an estate in futuro in a one-half (%) undivided interest in the propsrtydescribed below, which conveyance is to be effective only al Grantee's death,pursuant to Texas Property Code $ 5,041.

Properfy;

All ofthe following described real property:

BEING all of Lot No. I 3, (Thineen) in Block No, 6 (Six) in the John Kighr SecondAddition, to the City of Stephenville; Erath County, Texas, according to the Map andPlat thereof as recorded in the Deed Records ofErath County, Texas.(This being tlre same identical property conveyed to John K. Pratt, a single man, byWarranty Deed, from Wem David Whitenton and wife, Pauline Whitenton, datedOctober3l, 1967, andrecorded in Vol, 419, Page 93, oftheDeed Records ofErath' County, Texis, to which reference is made herein for all purposes).

Res€rvatlons froo and Exceptions to Conveysnce and Warranty:

This conveyance is made and accepted SUBJECT TO the fotlowing:

I ) This conveyance shall take effect and become absolute at Grantor's death. Theright of fuIl possession and enjoyment shall remain in Grantor until Grantor's death, : :

2) Any valid rights ofway, easements, restricrions, and reservations or conveyaniemade by prior owners of interests in oil, gas and other minerals, contained in .

insfruments ofrecord in the office ofthe County Clerk ofErath County, Texas.

. Grantor, for the consideration and subject to the reservations from and exceptions to

conveyance and wananty, grants, seils, and conveys to Grantee the property, together with all and

singular tbe rights and appurtenances thereto in any wise belongitrg, to have and hold it to Crantee,rcrantee's heirs, exscutors, administrators, successors, or assigns forever. THIS CONVEYANCESHALL TAKE EFFECT AND BECOtr,{E ABSOLUTE AT CRANTOR,S DEATH PURSUANTTO TEXAS PROPERTY CODE $ 5.04I. This instrurnent vests an estate in expect&ncy in Grantee

w8tranry Dccd-&tate in €xpcctancy Pagc.l of 2

IILt2et FAfi[o?9s

in the property described herein, a fee simple title to take efftct and become absolute only at

Grantoi's death, with a right of fult possession and enjoyment remaining in Granlor during his

lifetime. Crantor binds Crantor and Grantar's heirs, executors, administrators, and successors to

wanant and forever defend all and singular the property to Grantee and Grantee's heirs, executors,

administrators, s1ccessors, and assigns against every persou whomsoever lawfully claiming or to

claim the same or any part thereo{ except as to the reservations from and exceptions to conveyance

and warranty.

This instrument is intended to create in the grantee an "estate in futuro" and aa "estate in

expectancy" as those terms are defined in the holding ofthe Texas Supreme Court in Terrell v,

Grahqm,576 S.W.zd 610 (Tex l979).

This instrurnent is to be read together with the reciprocal deed executed by Gtantee in favor

of Graltor on this date, simulcaneously and in conjunction with this instrument.

When the context requires, singular nouns and pronouns include the plural.

STATE OF TEXAS

COI.JNTY OF ERATH

Notary Public, State olTexasMycommission "*eir*, eU4 t4t?/)lO

This insuument was acknowledged before rne on this the f,Q|day of July, 2006, by JANEPRATT.

8r.rfld-ftflGffiftffiffiffirffi#lF "rtijvjiiip,-

BLATNE SIMMONSiErti' /r '.-.& Notary Public iliqiDK:iE srArE oF rrxas iE t+:i.:;fJ My Commission !f__l':,i,-,.gf S,r" Expn a s 0z t 1 Jt2fi aiI4a!!Ar--ri, - i.

PREFARED IN THE OFFICE OF:

Coan & Elliott, P.C.188 N. GrahamStephenville , TX76401Tel: (254) 965-5066Fax: (254) 965:5065 :

AFTER RECORDING RETURN TO:

Coan & Elliotr, P,C,188 N, GrahamStephenville, TX764Cl'lel; (254) 965-5066Fax: (25a) 965-5065

waruly Dced-Estate in Expecmcy

:t0Ll2s l f[ffE02ee

Pagc 2of2

55888

WARRANTY DEEDESTATE IN tr'UTURO

ORICINALJUL 25 8

Date: July 21,2006

JOHN K. PRATTGrantor:

Grantor's Mailing Address:

1160 West Pecan


Granteer MARYJANEPRATT

Grantee's Mailing Address:

I 160 \I/esl Peeern


Considerationl

TEN AND NOi I 00 DOILARS and in kind consideration ofareciprocal conveyance,

execuled simultaneously and in conjunction with this instrurnent, to Grantor by

Grantee ofan estate infuturo in a one-half(r/:) undivided interest in the property

described below, which conveyance is to be effective only at Grantee's death,

pursuant to lexas Property Code $ 5.041.

Property:

Ali of the following described real propeny:

BEING atl of Lot No. 13, (Thirteen) in Block No. 6 (Six) in the John Kight Second

Addition, to the City of Stephenville; Erath County, Tsxas, according Lo the Map and

Plat therecfas recorded in the Deed Records ofErath County' Texas.(This be.ing the same identical prope'ry conveyed to John K. Pratt, a single man, by

Wananty Deed, from Wem David Wlitenton and wife, Pauline Whitenton, dated

Octobet 3 l, i967, and recorded in Vol. 41 9, Page 93, ofthe Deed Records ofErathCounty, Texas, to which reference is made herein for all purposes).

Reserrations from and Exceptions to Conveyance and Warranty:

, This conveyance is made a-nd accepted SUBJECT TO the following:

I ) This conveyance shall take effect and become absolute at Grantor's death. The

right of full possession and enjoyment shall remain in Grantor until Grantor's death.

2) Any valid rights ofway, easements, restdctions, and reseryalons or conveyance .

. . made by prior.owners of interests in oil, gas and other minerals, c$ntained ininstruminis ofrecord in the office ofthe County Clerk ofErath County, Texas. :

Grentor, for. the consideration and subject to the reservations fiom and exceptions to

conveyance and warranty, gratrts, sells, and conveys to Grantee the property, together with alt and

singular the rights arrd.appurtenances thereto in any wise belonging, to have and hold it to Grantee,

Grantee's heirs, executors, administrators, successors, or assigns forcver. THIS CONVEYANCESHALL TAKE EFFECT AND BECOME ABSOLUTE AT GRANTOR:S DEATH PURSUANT

Wmanry Dccd*Esate in Expcchncy

lilLl?el PA0l02es

PEgc I ofz

TO TEXAS PROPERTY CODE $ 5.041. This instrument vests an estate in expectancy in Grantee

in the property described herein, a fee simple title to take effect and become absolute only at

Grantor's death, with a right of full possession and enjoyment remaining in Cyrantor during his

lifetime. Grantor binds Grantor and Grantor's heirs, executors, administrators, and successors to

warrant and forever defend all and singular the property to Grantee and Grantee's heirs, executors,

administrators, successors, and assigns against every person whomsoever lawfully claiming or toclaim the same or any pan fiercof,, except as to the reservations from and exceptions to conveyanca

and warrarty,

This insrr'.rment is intended to create in ihe grantee an "estate in futuro" and an "estate inexpectancy" as those tenns are defined ia the holding ofthe Texas Supreme Court in Terrell v.

Graham,s76 S.W.2d 610 (Tex. I979).

This instrument is to be read together with the reciprocal deed executed by Grantee in favo!of Grantor on this date, sinultaneously and in conjunction with this instrument.

When the context requires, singular nouns and pronouns inolude the plural,

STATE OF TEXAS

COUNTY OF ERATH

This instrument was acknowledgedbefore me onthis ,5, !#auv of.Tuly,2006, byJOHNK. PRATT.

E ..q.iTi],FIr,,. BLAINE SIMMONSit..llr..".-.-"4 Notary Public ?T!*sF*! STATE OF TEXAS :!'t q:f)ie-.s MY commission ii..'ft llfill-.-E":pi:'.33i!"31.3"9i3!

Notary Public, State of Texas r IMy commission expft es: --@l,Wp-!)JD-

PREPARED INTHE OFFICE OF:

Coan & Ellioft, P,C.188 N. GrahamStephenville, TX 7640tTel: (254) 965-5066Fax: Q54) 965-5065

AFTER RECORDING RETURN TO:

Coan & Elliott, P.C.188 N. GrahamStephenville, TX?6401'Tel: (254) 965-5066Fax: (254) 965-5065

WErran!y DGd:Estete in Expcctancy PaEe 2 o[?

r[Ll2el PA0r0u 96

PROBATE EVOLVING ISSUES AND TITLE COMPANY ...Probate: Evolving Issues and Title Company Requirements...

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Transcript of PROBATE EVOLVING ISSUES AND TITLE COMPANY ...Probate: Evolving Issues and Title Company Requirements...