LITIGATION IN PROBATE COURT

Transcription

1 LITIGATION IN PROBATE COURT MARY C. BURDETTE BRANDY BAXTER-THOMPSON Calloway, Norris, Burdette & Weber, PLLC 3811 Turtle Creek Blvd., Suite 400 Dallas, Texas (214) Dallas Bar Association Friday Clinic March 15, 2013

2 LITIGATION IN PROBATE COURT I. Decedents s Estates A. Suit to compel the delivery of a will (Texas Probate Code ( TPC ) 75) B. Will Contest (TPC 10) 1. Lack of testamentary capacity - Lowrey v. Saunders, 666 S.W.2d 226, 232 (Tex. App. San Antonio 1984, writ ref d n.r.e); Lindley v. Lindley, 384 S.W.2d 676, 679 (Tex. 1964). a. Testamentary capacity is defined as the testator having sufficient mental ability at the time of execution of the will to be able to do the following: (1) understand the act of making a will; (2) understand the effect of his act of making a will; (3) understand the general nature and extent of his properties; (4) know his next of kin and the natural objects of his bounty; and (5) collect in his mind the elements of the business to be transacted and to hold those elements long enough to perceive their obvious relation to each other, and to form a reasonable judgment as to them. 2. Undue influence - Rothermel v. Duncan, 369 S.W.2d 917, 922 (Tex. 1963); Long v. Long, 125 S.W.2d 1034, 1036 (Tex. 1939). a. Elements: (1) the existence and exertion of an influence; (2) that the influence operated to subvert or overpower the person s mind when executing the document; and (3) that the person would not have executed the document but for the influence. b. Factors: (1) The surroundings and circumstances attending the execution of the will, including the relationship between the testator and the beneficiary and any others who might be expected to be recipients of the testator s bounty. (2) The motive, character, and conduct of the persons benefitted by the will. (3) The participation by the beneficiary in the preparation or execution of the will.

3 (4) The words and acts of the parties. (5) The interest in and the opportunity for the exertion of undue influence. (6) The physical and mental condition of the testator at the time the will was executed, including the testator s age, any weakness or infirmity, and the extent to which he was dependent upon and subject to the control of the beneficiary. (7) The improvidence of the transaction by reason of an unjust, unreasonable or unnatural disposition of the testator s property. 3. Insane delusion - Lindley v. Lindley, 384 S.W.2d 676 (Tex. 1964); Knight v. Edwards, 264 S.W2d 692 (Tex. 1954); Bauer v. Estate of Bauer, 687 S.W.2d 410 (Tex. App. Houston [14th Dist. 1985, writ ref d n.r.e.). a. An insane delusion is the belief of a state of supposed facts that do not exist and that no rational person would believe. The insane delusion, if any, must have caused the person to dispose of his property in a way that he would not have but for the insane delusion. A belief or decision, however illogical, if arrived at through a process of reasoning based on existing facts, is not an insane delusion. 4. No contest (forfeiture) clauses - good faith exception (TPC 64) 5. Period for Contesting Probate (TPC 93 - within 2 years of will s admission to probate) C. Tortious interference with inheritance rights - King v. Acker, 725 S.W.2d 750, 754 (Tex. App. Houston [1st Dist.] 1987) (adopting the RESTATEMENT (SECOND) OF TORTS 774B (1977)); Brandes v. Rice Trust, Inc., 966 S.W.2d 144, (Tex. App. Houston [14th Dist.] 1998, pet. denied); (TPC 10C) D. Contest Qualification of Personal Representative (TPC 78) E. Will construction suit (CPRC ; TPC 58) F. Section 5B - Probate Court authority to assert jurisdiction over a matter pending in another court related to a Decedent s estate G. Marital-related causes of action 1. Contest marriage based on lack of capacity (Fam Code 6.111; TPC 47A) 2. Common law spouse claims. (Fam. Code 2.401; 2 year limitations period) 3. Community property vs. Separate property issues (Fam Code ) 4. Family Allowance (TPC , 290)

4 5. Homestead issues (TPC 284) 6. Child support claims (Fam. Code , , ) 7. Post-divorce enforcement of divorce decree / property division (Fam. Code 9.001) 8. Nontestamentary transfers (TPC 439, 471 et seq.) 9. Appointment of ex-spouse as personal representative; Bequest to ex-spouse (TPC 69) H. Suits against Personal Representative 1. Contest Inventory (TPC 258) 2. Demand for accounting of estate (after 15 months - TPC 149A) 3. Demand for accounting and distribution of estate (after 2 years - TPC 149B) 4. Removal (TPC 149C) 5. Breach of fiduciary duty a. General duties to collect assets, pay debts, set aside exempt property and distribute estate to beneficiaries b. Owes same fiduciary duties as a trustee. 6. TRO/Temporary injunction (TRCP 680; CPRC Ch. 65) 7. Appointment of Receiver (CPRC ) 8. Fiduciary Fraud (Penal Code 32.45) I. Suits by Personal Representative (TPC 233A) 1. Show Cause to recover personal property or papers belonging to estate (TPC 232) 2. Demand accounting by Agent under Power of Attorney (TPC 489B) 3. Malpractice by estate planners (survives Decedent s death and can be pursued by executor under recent change in law) - Smith v. O Donnell, 288 S.W.3d 417 (Tex. 2009) 4. Wrongful death / personal injury claims 5. Any lawsuit that relates to the Decedent or his property (TPC 233A) J. Creditor s Claims 1. Enforcement of Claim by Suit (TPC 147, 313) 2. Liability of Independent Executor (TPC 146(c)) II. Trusts A. Jurisdiction in District Court and Probate Court (Trust Code ;TPC 4A 4H) B. Trust Contest (Trust Code )

5 1. Lack of contractual capacity a. To enter into a valid contract, one must understand the business relationship and the terms of the contract; there must be a meeting of the minds. Daugherty v. McDonald, 407 S.W.2d 954 (Tex. Civ. App. Fort Worth 1966, no writ). 2. Undue influence 3. No contest clauses - good faith exception (Trust Code ) C. Suit to modify trust (Trust Code ) D. Suit to terminate trust (Trust Code ) E. Construction of trust instrument (CPRC ; Trust Code ) F. Suits against Trustee 1. Breach of Fiduciary Duty (Trust Code ) a. Duty of Loyalty (Trust Code ) (1) Including self-dealing b. Duty of Impartiality (Trust Code ) c. Duty of Competence d. Duty of Full Disclosure (Trust Code (a)) e. Duty to Reasonably Exercise Discretion (Trust Code (a)) 2. Removal (Trust Code ) 3. Improper investments - Uniform Prudent Investor Act (UPIA), Chapter 117 of Texas Property Code 4. Demand for Accounting (Trust Code ) 5. Compel distributions (Trust Code ) 6. Exculpatory clause. a. Ineffective for breaches in bad faith, intentional, & with reckless indifference (Trust Code ) 7. Statute of Limitations - 4 years (CPRC ) G. Remedies for breach of trust (Trust Code ) 1. Compel performance 2. Compel accounting 3. Appointment of receiver

6 4. Suspend trustee 5. Disgorgement 6. Constructive trust 7. Monetary / exemplary damages III. Guardianships A. Contest proposed ward s incapacity 1. Definition of incapacity (601) 2. Findings required (684) 3. AAL (646, 694C), GAL (645) 4. Court investigator (648A) B. Contest of applicant s appointment 1. Standing to contest (642) 2. Order of priority (676, 677) 3. Designation of Guardian (677A, 679) 4. Disqualification (681) C. Costs 1. If guardian appointed, paid from ward s assets, if in good faith (665B, 669) 2. If no guardian appointed, applicant must pay (669(b))