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THE SAN ANTONIO ESTATE PLANNERS COUNCIL’S
DOCKET CALL IN PROBATE COURT
PITFALLS OF THE NOT SO “SIMPLE” PROBATE
MARY C. BURDETTE
Calloway, Norris, Burdette & Weber
3811 Turtle Creek Blvd., Suite 400
Dallas, Texas 75219
February 17-18, 2005
TABLE OF CONTENTS
I.
DISPUTED CREDITOR CLAIMS................................................................
A.
Introduction. .........................................................................................
B.
Duties Owed to Creditors. ....................................................................
C.
Independent Administration. ................................................................
1.
Notice to Creditors.. ...................................................................
a.
Notice by Publication. .....................................................
b.
Notice to Secured Creditors.............................................
c.
Penalty for Failure to Give Required Notices..................
d.
Permissive Notice. ...........................................................
2.
Presentment of Claim by Secured Creditor................................
3.
Non-Judicial Foreclosure. ..........................................................
a.
Prior to Administration. ...................................................
b.
During Administration.....................................................
4.
Presentment of Unsecured Claim...............................................
5.
Enforcement of Claims by Suit. .................................................
6.
Liability of Independent Executor. ............................................
7.
Unliquidated Claims. .................................................................
D.
Dependent Administration. ..................................................................
1.
Notices. ......................................................................................
2.
Presentment of Claims. ..............................................................
3.
Exceptions to Presentment. ........................................................
4.
Action by Personal Representative with Respect to Claims. .....
a.
Form of Claim. ................................................................
b.
Objections to the Form of Claims....................................
c.
Endorsement of Claim. ....................................................
d.
Limitations on Claims......................................................
e.
Rejected Claims. ..............................................................
E.
Classification of Claims. ......................................................................
1.
Duty of Personal Representative................................................
2.
Claims for Child Support. ..........................................................
a.
Child Support Accrued Before Death..............................
b.
Child Support Accrued After Death. ...............................
c.
Credit for Social Security Death Benefits. ......................
3.
Debts Due to the United States. .................................................
4.
Order of Payment of Claims. .....................................................
5.
Secured Creditors.......................................................................
a.
Election by Secured Creditor...........................................
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F.
G.
H.
II.
b.
Time for Election............................................................. 9
c.
Matured Secured Claims.................................................. 9
d.
Preferred Debt and Lien. ................................................. 9
Setting Aside Exempt Assets. .............................................................. 9
1.
Action by Personal Representative. ......................................... 10
2.
Delivery of Exempt Assets. ..................................................... 10
3.
Homestead................................................................................ 10
4.
Partition of Homestead. ........................................................... 10
5.
Homestead Free from Debts. ................................................... 11
6.
Title to Exempt Assets. ............................................................ 11
Setting Allowances............................................................................. 11
1.
Family Allowance. ................................................................... 12
a.
Time for Setting............................................................. 12
b.
Amount of Allowance. .................................................. 12
c.
Payment of Allowance................................................... 12
2.
Allowances in Lieu of Exempt Property.................................. 12
a.
Setting Allowances.. ...................................................... 12
b.
Delivery of Allowances. ................................................ 13
3.
Timely Setting Allowance. ...................................................... 13
Non-probate Assets. ........................................................................... 13
RECOVERING TANGIBLE ASSETS. .......................................................
A.
Right to Possession.............................................................................
B.
Show Cause Order..............................................................................
C.
Order Under Sections 232, 233. .........................................................
D.
File Suit and Seek Injunctive Relief...................................................
E.
Contempt Actions...............................................................................
1.
Authority of the Court to Find Contempt.................................
2.
Definitions................................................................................
3.
Direct Contempt. ......................................................................
4.
Constructive Contempt. ...........................................................
5.
Distinguishing Contempt. ........................................................
6.
Due Process..............................................................................
a.
Notice.............................................................................
b.
Pleadings........................................................................
(1)
Specificity. ................................................
(2)
Ambiguity. ................................................
(3)
Opportunity to Purge. ...............................
c.
Miscellaneous Provisions. .............................................
(1)
Continuance of Hearings...........................
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(2)
(3)
(4)
(5)
Appointment of Counsel. ..........................
Officers of the Court. ................................
Monetary Sanctions. .................................
Delay. ........................................................
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III.
CONVERTING BETWEEN INDEPENDENT AND DEPENDENT
ADMINISTRATIONS. ................................................................................ 20
A.
Converting from Independent to Dependent. ..................................... 20
B.
Converting from Dependent to Independent Administration. ............ 21
IV.
ADMINISTERING COMMUNITY PROPERTY IN DISPUTED ESTATES .... 21
A.
V.
Introduction. .......................................................................................
1.
Probate Code §177(b). .............................................................
2.
Fiduciary Duties.......................................................................
3.
Inventory. .................................................................................
4.
Probate Code §156. ..................................................................
5.
Powers of Executor. .................................................................
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DEALING WITH THE NON-PAYING CLIENT.......................................
A.
Representing the Independent Executor.............................................
1.
Engagement Letter. ..................................................................
2.
Retainer. ...................................................................................
3.
Non-payment............................................................................
B.
Representing the Dependent Administrator. ......................................
C.
Representing a Beneficiary. ...............................................................
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PITFALLS OF THE NOT SO “SIM PLE” PROBATE
PITFALLS OF THE NOT SO “SIMPLE” PROBATE
I.
the representative’s attorney or in care of
“Representative, Estate of _________”. A copy
of the printed notice together with the publisher’s
affidavit that the notice was properly published
shall be filed in the court where the cause is
pending. Published notice is required in all
independent administrations.
DISPUTED CREDITOR CLAIMS
A. Introduction
A decedent’s estate can be a trap for the unwary
creditor who is seeking to enforce a lien or collect
a debt against a deceased debtor. A creditor must
be aware of Texas law in both independent and
dependent administrations and act appropriately
in order to protect its claim against an estate.
How a personal representative deals with
creditors’ claims, allowances and exempt assets
can materially affect the assets passing to the
family members.
b. Notice to Secured Creditors
A personal representative in an independent
administration must also give notice to secured
creditors in accordance with Section 295 of the
Code. Within two (2) months after receiving
letters, the personal representative shall give
notice of the issuance of such letters to each and
e v e r y p e r s o n k n o w n to th e p e r s o n a l
representative to have a claim for money against
the estate of a decedent that is secured by real or
personal property of the estate. If the personal
representative does not have actual notice of such
a creditor within two (2) months of receiving
letters, then within a reasonable time after
obtaining actual knowledge of the existence of a
secured creditor, the personal representative shall
give notice to that person of the issuance of
letters. Notice to secured creditors shall be given
by certified or registered mail, with return receipt
requested, addressed to the record holder of such
indebtedness or claim at the record holder’s last
known post office address. A copy of each notice
to a secured creditor, a copy of the returned
receipt, and an affidavit of the representative
stating that the notice was mailed as required by
law, giving the name of the person to whom the
notice was mailed, shall be filed with the Clerk of
the Court from which the letters were issued.
B. Duties Owed to Creditors
Although some prior cases indicated to the
contrary, a recent Houston Court of Appeals case
specifically held that an executor’s statutory duty
to approve and pay claims does not give rise to a
fiduciary duty, and the executor does not hold the
estate property in trust for those with claims
against the estate. FCLT Loans, L.P. v. Estate of
Bracher, 93 S.W.3d 469 (Tex. App.–Houston
[14 th Dist. 2002, no writ). Compare Cochran’s
Administrators v. Thompson, 18 Tex. 652 (1857);
Farmers’ & Merchants’ Nat. Bank v. Bell, 31
Tex. Civ. App.–124, 71 S.W. 570 (1902, writ
ref’d).
C.
Independent Administration
1.
Notice to Creditors.
Sections 146 and 294 of the Texas Probate
Code provide for the notices that a personal
representative in an independent administration is
required to give to creditors.
a. Notice by Publication
Within one (1) month after receiving letters, the
personal representative of an estate shall publish
in some newspaper, printed in the county where
the letters were issued, a notice requiring all
persons having claims against the estate being
administered to present the same in the time
prescribed by law. The notice shall include the
date of issuance of letters held by the
representative, the address to which the claims
may be presented and an instruction of the
representative’s choice that the claims be
addressed in care of the representative, in care of
c.
Penalty for Failure to Give
Required Notices.
Pursuant to Probate Code Section 297, if a
personal representative fails to give notice by
publication or to a secured creditor, the
rep resen tative an d th e su reties o n th e
representative’s bond shall be liable for any
damage which any person suffers by reason of
such neglect, unless it appears that such person
had notice otherwise.
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PITFALLS OF THE NOT SO “SIM PLE” PROBATE
d. Permissive Notice.
S e c tio n 1 4 6 p r ovid e s th a t a p e rs o n a l
representative in an independent administration
may give notice permitted under Section 294(d)
of the Code and bar a claim under that
subsection.
Section 294(d) provides that
permissive notices may be given to unsecured
creditors at any tim e before an estate
administration is closed. Such notice may be
given by certified mail with return receipt
requested to an unsecured creditor having a claim
for money against the estate expressly stating that
the creditor must present a claim within four (4)
months after the date of the receipt of the notice
or the claim is barred, provided the claim is not
already barred by the applicable statute of
limitation. A notice must include: (1) the date of
issuance of letters held by the representative; (2)
the address to which claims may be presented;
and (3) the instruction of the representative’s
choice that the claim be addressed in care of: (a)
the representative; (b) the representative’s
attorney; or (c) “Representative, Estate of
_______ (naming the estate)”.
It is also
suggested that the notice instruct the creditor that
the claim must be in the form required by the
Texas Probate Code and that the attorney for the
estate cannot give advice as to the proper
procedure for filing a claim, so the creditor
should contact an attorney of its choice with
respect to the procedures for filing the claim.
This should decrease the number of phone calls
received by the attorney for the personal
representative from creditors asking for help in
filing claims. It also puts the creditor on notice
that the claim needs to be in a particular form.
See Appendix A.
a matured secured claim to be paid in the due
course of administration. If this election is not
timely made, the claim is classified as a preferred
debt and lien against the specific properties
securing the indebtedness and shall be paid
according to the terms of the contract that secured
the lien, and a claim may not be asserted against
other assets of the estate.
The independent
representative may pay the claim before the claim
matures if paying the claim before maturity is in
the best interest of the estate. If a secured
creditor’s claim is considered a preferred debt
and lien, then the creditor may not seek any
deficiency against the other assets of the estate.
Prior to this addition to Section 146, the secured
creditor was not bound to such an election and
could still seek a deficiency against the estate in
an independent administration.
3.
Non-Judicial Foreclosure
a. Prior to Administration
It has long been the law in Texas that, in a
dependent administration, an attempted exercise
of a power of sale in an extrajudicial foreclosure
is void. Pearce v. Stokes, 291 S.W. 2d 309
(Tex.1956); Hury v. Preas 673 S.W. 2d 949
(Tex.A pp--Tyler 1984, writ ref’d n.r.e.);
Bozem an v. F ollitt, 556 S.W . 2d 608
(Tex.Civ.App.—Corpus Christi 1977, writ ref’d
n.r.e.).
Consequently, if a secured creditor
foreclosed upon a deceased person’s assets prior
to a dependent administration being opened, the
foreclosure would be void, but the foreclosure
would stand if an independent administration was
opened. Taylor v. Williams, 101 Tex. 388, 108
S.W. 815 (1908); Fischer v. Britton, 125 Tex.
505, 83 S.W.2d 305 (1935).
Further, a
nonjudicial foreclosure while a dependent
administration is pending is void, as the
administration suspends the power of sale.
Because of the changes in Section 146, does a
secured creditor also take a risk by foreclosing
prior to the opening of an independent
administration? There are no cases addressing
this point since the changes to Section 146.
However, in Bozeman v. Folliott, the Court seems
to base its decision on the fact that in an
independent administration, a creditor cannot
enforce its claim against the executor in probate
court. However, in a dependent administration,
the creditor is required to seek permission from
the probate court to foreclose and to enforce its
2. Presentment of Claim by Secured
Creditor.
A major difference between a dependent
administration and an independent administration
is the form in which a claim must be presented by
a creditor. Pursuant to Section 146(b), a secured
claim for money must be presented within six (6)
months after the date letters are granted, or within
four (4) months after the date notice is received if
the notice was sent more than two (2) months
after the date letters were issued, whichever is
later. A creditor with a claim for money secured
by real or personal property must give notice to
the independent representative of the creditor’s
election to have the creditor’s claim approved as
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PITFALLS OF THE NOT SO “SIM PLE” PROBATE
claim. In Section 146, a secured creditor is now
put to an election, and that election must be made
within six months. Since a secured creditor in an
independent administration is now put to an
election, and an independent executor has the
right to pay the claim in accordance with the
contract, does this some how change the law with
respect to nonjudicial foreclosures prior to the
opening of an independent administration? If a
creditor forecloses prior to the opening of an
independent administration, do the provisions of
Section 146 not apply to that estate? In the
Supreme Court decision of Pearce v. Stokes, the
Court’s decision seems to turn more on the fact
that the Court felt that a sale of property pursuant
to a nonjudicial foreclosure prior to the opening
of an administration would always interfere with
the due administration of an estate. The Court
held that the secured creditor is protected in the
payment of his debt when the property is brought
into administration. He has a choice of methods
he may pursue in obtaining payment. Now that
the secured creditor is put to the same election
and choices in both an independent and
dependent administration, can it be argued that a
nonjudicial foreclosure before the opening of an
independent administration is voidable?
(Tex. Civ. App.–San Antonio 1983, writ ref’d
n.r.e.). Conducting a nonjudicial foreclosure sale
pursuant to a deed of trust does not constitute
state action for purposes of the due process clause
of the United States Constitution. Barrera v.
Security Building and Investment Corporation,
519 F.2d 1166 (5 th Cir. 1975); Williamson v.
Tucker, 615 S.W.2d 881 (Tex. Civ. App.–Dallas
1981 writ ref’d n.r.e.); Armenta v. Nussbaum, 519
S.W.2d 673 (Tex. Civ. App.–Corpus Christi
1975, writ ref’d n.r.e.). An argument can be
made based on Section 146(b) that a secured
creditor cannot exercise foreclosure rights under
the contract until the expiration of six months
after the date that letters are granted to an
Independent Executor. See Rivera v. Morales,
733 S.W. 2d 677, 679 (Tex. App. - San Antonio
1987, writ ref’d n.r.e.) (A claim secured by a
mortgage is a “money claim” under §298 even
though it contains a power of sale by way of a
non-judicial foreclosure.)
4.
Presentment of Unsecured Claim.
In an independent administration, an
unsecured creditor who has a claim for money
against the estate and who has received the
permissive four (4) month notice, shall give
notice to the independent representative of the
nature and amount of the claim no later than the
120 th day after the date on which notice is
received, or the claim is barred. Section 146(e)
provides that the notice given by either a secured
creditor or an unsecured creditor responding to a
permissive four (4) month letter must be
contained in: (a) a written instrument that is hand
delivered with proof of receipt or mailed by
certified mail, return receipt requested, to the
independent executor or the executor’s attorney;
(b) a pleading filed in a lawsuit with respect to
the claim; or (c) a written instrument or pleading
filed in the court in which the administration of
the estate is pending. These provisions of Section
146 were added by the Legislature in 1995. Note
that the 120 day requirement is different than the
four (4) month requirement that is set forth in the
permissive notice letter. Consequently, if an
unsecured creditor filed a claim within four (4)
months, but later than the 120 th day, there is a
question as to whether or not the claim is barred.
This author believes that the claim is not barred
and that the creditor should have the full four (4)
months as provided in the notice. The claim does
not have to meet the formal requirements that are
b. During Administration
A power of sale under a deed of trust may be
validly exercised during the pendency of an
independent administration, and the sale is not
voidable by the independent executor. Robertson
v. Paul, 16 Tex. 472 (1856); Fischer v. Britton,
83 S.W.2d 307 Itex. 1935); Taylor v. Williams,
101 Tex. 388, 108 S.W. 815 (1908); Pottinger v.
Southwestern Life Ins. Co., 138 S.W.2d 645 (Tex.
Civ. App.–Waco 1940, no writ); Bozeman v.
Folliott, 556 S.W.2d 608 (Tex. Civ. App.–Corpus
Christi 1977, writ ref’d n.r.e.). This same rule
applies to federal tax lien foreclosures. I.T. 2918,
XIV-2 Cum. Bull. 263.
A foreclosure sale
conducted during an independent administration
remains valid even though the administration is
later brought under court supervision. Bozeman
v. Folliott, supra.
Notice of the foreclosure sale pursuant to a
deed of trust is given to the independent executor
in the same manner as would have been given to
the decedent, as prescribed by Texas Property
Code §51.002 and the applicable provisions of
the deed of trust. Fenimore v. Gonzales County
Savings and Loan Association, 650 S.W .2d 213
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PITFALLS OF THE NOT SO “SIM PLE” PROBATE
set forth in a dependent administration for the
form of claims of creditors, Ditto Investment Co.
v. Ditto, 293 S.W. 2d 267 (Tex. Civ. App.—Fort
Worth 1956, no writ), but the delivery of the
notice must meet the requirements of Section
146(e), or the claim is barred. For instance, if the
creditor simply sends by regular mail a statement
showing the amounts owed, it does not comply
with Section 146(e) because it was not hand
delivered with proof of receipt or mailed by
certified mail. Therefore, a strict reading of the
statute requires that the claim be barred. An
executor’s attorney receiving claims from
creditors should always keep the envelope in
which the claim is received as proof as to whether
or not it was properly delivered.
believes the estate has sufficient assets to pay all
claims against the estate. Probate Code §146(c).
7.
Unliquidated Claims.
Section 146 and Section 294 provide for
permissive notice to unsecured creditors having a
claim for money. Consequently, an unliquidated
claim may not be presented and is not subject to a
four (4) month bar if a letter under Section
146(a)(2) is sent. Case law has construed “all
claims for money” to require presentment of a
claim if the amount can be ascertained with
certainty. Examples of such unliquidated claims
are tort claims See Wilder v. Mossler, 583 S.W.
2d 664 (Tex. Civ. App.—Houston 1964, no writ)
and quantum meruit claims for services rendered
See Wells v. Hobbs, 122 S.W. 451 (Tex. Civ.
App.—1909, no writ); and Moore v. Rice, 80
S.W. 2d 451 (Tex. Civ. App.—Eastland 1935, no
writ).
5.
Enforcement of Claims by Suit.
Pursuant to Section 147, any person having a
debt or claim against the estate in an independent
administration may enforce the payment of same
by suit against the independent executor; and
when judgment is recovered against the
independent executor, execution shall run against
the estate of the decedent in the hands of the
independent executor which is subject to such
debt. However, if the estate is insolvent, a
creditor who secures judgment against the
independent executor cannot have estate property
sold under execution and applied to his debt to
the exclusion of other creditors. Woods v.
Bradford, 284 S.W. 673 (Tex. Civ. App. 1926, no
writ). An independent executor is not required to
plead to any suit brought against him for money
until after six (6) months from the date the
independent administration was created and the
order appointing an independent executor was
entered. Probate Code §147. Consequently,
unlike a dependent administration, a claimant
may file suit against the executor on its claim at
any time provided the statute of limitations has
not expired or, if the claimant has received the
permissive four (4) month letter, four (4) months
have not lapsed.
D.
Dependent Administration.
1.
Notices.
In a dependent administration, the same
notices as set forth above for an independent
administration are required under Sections 294
and 295 for a dependent administration;
therefore, a published notice and notice to
secured creditors are required. In addition, the
permissive four (4) month notice may be given to
unsecured creditors.
2.
Presentment of Claims.
In a dependent administration, the creditor is
required to formally “present” its claim. The
Probate Code authorizes two different methods
by which a claim may be presented: (a) the
creditor may present the claim directly to the
executor or administrator as authorized by
Section 298(a); or (b) claims may also be
presented by depositing, or filing, same with the
Clerk pursuant to Section 308 of the Probate
Code. If a claim is deposited with the Clerk, then
the Clerk is directed to notify the “representative”
of the estate of the deposit of the claim with the
Clerk, but Section 308 goes on to provide that
failure of the Clerk to give that notice does not
affect the validity of the presentment or the
presumption of rejection if the claim is not acted
upon within thirty (30) days after it is filed with
the clerk.
6.
Liability of Independent Executor.
A n in d ep en d en t ex ecu to r, in th e
administration of an estate, may pay at any time,
without personal liability, a claim for money
against the estate to the extent approved and
classified by the personal representative if: (a) the
claim is not barred by limitations; and (b) at the
time of payment, the independent executor
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PITFALLS OF THE NOT SO “SIM PLE” PROBATE
b. Objections to the Form of Claims.
Under Section 302, an administrator is
deemed to have waived “any defect of form, or
claim of insufficiency of exhibits or vouchers
presented” in a claim, unless he files a written
objection thereto within thirty (30) days after
presentm ent.
T h e d ilem m a facing the
administrator on this subject is whether a defect
in a claim is one of form only, or is a fatal defect,
rendering the claim a nullity. In City of Austin v.
Aguilar, 607 S.W . 2d 310 (Tex. C iv.
App.—Austin 1980, no writ), the creditor filed
two claims in which the authenticating affidavit
was not properly executed by a representative of
the corporation. The Administratrix rejected both
of those claims although the Administratrix made
no written objections to either claim. More than
ninety days passed after the rejection of the
claims. The Administratrix took the position that
the claims were barred under Section 313 of the
Code. The claimant argued that the claims were
null because of its own failure to comply with
Section 304. The Court of Appeals disagreed
with the claimant and held that the defects in the
claims were defects in form only, which were
waived by the Administratrix because she filed
no written objection as to the form of the claim.
The claims were barred because the claimant
failed to file suit ninety days after rejection.
However, in Boney v. Harris, 557 S.W. 2d 376
(Tex. Civ. App.—Houston 1977, no writ), the
affidavit filed by the claimant did not comply
with Section 301 because the affidavit stated that
all legal offsets, payments and credits through a
certain date had been allowed, but the affidavit
was filed four months after the stated date. No
representation was made in the claim concerning
any offsets, payments or credits after the date set
forth in the claim. The Administrator rejected the
claim and the claimant failed to file suit within
ninety days thereafter. The Court of Appeals, in
reversing the trial court, held that the rejection of
the improperly verified claim did not set in
motion the ninety day statute of limitation. The
Court stated that: “A claimant may sue for the
establishment of his claim only after rejection of
it by the personal representative and only if the
claim was legally presented.” The Court found
the claim at issue to be void and held that the
ninety-day limitation period could not run against
a void claim.
Consequently, a personal
representative who receives a claim that is not in
the proper form has the dilemma of whether or
3.
Exceptions to Presentment.
There are a few exceptions to the
requirement of presentment of claims in a
dependent administration: (a) as discussed in
independent administrations above, unliquidated
claims need not be presented because Section 298
requires only that “claims for money” be
presented to the administrator; and (b) Section
317(c) eliminates presentment as a requirement
with respect to: (1) claims of any heir, devisee, or
legatee who claims in such capacity; (2) claims
that accrue against the estate after the granting of
letters for which the representative of the estate
has contracted, such as attorneys’ fees,
accounting fees, or other administration expenses
(3) claims for delinquent taxes against the
decedent’s estate that is being administered in
probate in: (a) a county other than the county
where the taxes were imposed or (b) the same
county in which the taxes were imposed if the
probate of the decedent’s estate has been pending
for more than four (4) years.
4. Action by Personal Representative with
Respect to Claims.
a. Form of Claim.
Section 301 of the Code prohibits an
administrator from allowing, and the Court from
approving, any claim that is not supported by an
affidavit that the claim is just and that all legal
offsets, payments and credits known to the affiant
have been allowed. Consequently, any time a
claim is received in a dependent administration, it
should be checked for these magic words. In
addition, Section 304 of the Probate Code
contains the requirement that if the claim is made
on behalf of a corporation, it must provide that
the “cashier, treasurer or managing official” of
the corporation made the affidavit authenticating
the claim and that it is sufficient to state in such
affidavit that the person making it “has made
diligent inquiry and examination, and that he
believes that the claim is just and all legal offsets,
payments and credits known to the affiant have
been allowed”.
A corporate representative
signing in his or her individual capacity, or
simply signing the name of the corporation, with
nothing else, is not proper, and the claim should
be rejected.
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PITFALLS OF THE NOT SO “SIM PLE” PROBATE
not to object to the form of the claim. This
author’s practice is to reject a claim that is not in
the proper form and state that the reason for the
rejection of the claim is because the claim does
not comply with the form required by the Texas
Probate Code. If the creditor fails to timely file a
proper claim and does not file suit within ninety
days of the rejection, the personal representative
can argue that the claim is barred because the
claim was rejected. If the personal representative
had sent the four month permissive notice under
Section 294(d) and the trial court decides to
follow the reasoning under Boney, the personal
representative could then argue that the creditor
failed to file a properly authenticated claim as
required by the Texas Probate Code, and
therefore, the claim is void, as it was not filed
within the requisite four month period.
Consequently, a dependent administrator should
always consider sending the permissive notice
allowed under Section 294(d) because this puts
the burden on the creditor to timely file a claim
that strictly complies with the requirements of the
Code.
16.062 of the Texas Civil Practice and Remedies
Code, the general statute of limitation which
would otherwise apply, are tolled for a period of
twelve (12) months after a decedent’s death or
until “an executor or administrator of a
decedent’s estate qualifies”, whichever occurs
first. The running of the statute of limitations is
not tolled by filing a suit to establish a claim
which has not been properly presented. See Furr
v. Young, 607 S.W. 2d 532, 536 (Tex. Civ. App. Fort Worth 1975, no writ).
e. Rejected Claims.
An administrator may reject a claim at any
time during the 30-day period following
presentation. Probate Code §309. No actual
notice of rejection must be given to the creditor.
See Russell v. Dobbs, 163 Tex. 282, 354 S.W. 2d
373 (1962); Cessna Finance Corp. v. Morrison,
667 S.W. 2d 580 (Tex. App. - Houston [first
dist.] 1984, no writ). The administrator is under a
duty to reject any claim barred by the statute of
limitation.
Probate Code §298(b).
If an
administrator
in a dependent administration
rejects a claim, the Court cannot override the
rejection unless the rejected claim is established
by suit. See, eg, Smith v. State, 493 S.W. 2d 650
(Tex. Civ. App. - Eastland 1973, writ ref’d
n.r.e.); Small v. Small, 434 S.W.2d 940 (Tex.
Civ. App. - Waco 1968, writ ref’d n.r.e.).
Similarly, the court cannot approve a claim which
has not been presented to the administrator.
Probate Code §314; Butler v. Summers, 151 Tex.
618, 253 S.W.2d 418 (1952); Clements v.
Chajkowski 146 Tex. 408, 208 S.W.2d 841
(1948). When that occurs, the Court may then
render a judgment granting the claim and
classifying it. Under Section 314, a creditor
cannot obtain a valid judgment against an
administrator unless he goes through the claims
process, including presentment, rejection by the
administrator, and obtaining a judgment in a suit
on the rejected claim. If an administrator rejects
a claim in a dependent administration, then the
creditor must, within ninety (90) days of
rejection, file suit or the claim is barred Section
313.
c. Endorsement of Claim.
Under Sections 309 and 310 of the Code, the
administrator must endorse on or annex to every
claim presented to him, within thirty (30) days
after presentment, a memorandum signed by him,
stating the time of presentation or filing, and
whether he allows or rejects it, or what portion
thereof he allows or rejects. The administrator’s
failure to take any action constitutes a rejection of
the claim; and, under Section 310, if the claim is
thereafter established by suit, the costs shall be
ta x e d a g a in s t th e estate rep resen tativ e ,
individually, or he may be removed on the
written complaint of any person interested in the
claim, after citation and hearing.
d. Limitations on Claims.
The administrator is expressly prohibited by
Section 298(b) from allowing any claim that is
barred by limitations. If the administrator allows
such a claim, and if the Court is satisfied that
limitations has run, Section 298(b) directs the
Probate Court to disapprove the claim. Under
Section 299 of the Code, the general statutes of
limitations are tolled: (1) by filing a claim which
is legally allowed and approved; or (2) by
bringing a suit on a rejected claim within ninety
(90) days after rejection. Also, under Section
6
PITFALLS OF THE NOT SO “SIM PLE” PROBATE
E.
been confirmed and reduced to money judgment
as determined under Subchapter F, Chapter 157,
Texas Family Code (See Section 2 below);
Classification of Claims.
1.
Duty of Personal Representative.
In both an independent and dependent
administration, a personal representative is
required to classify claims; however, Section 146
provides that the independent executor classify
the claims free from the control of the Court in
the same order of priority, classification, and
proration described in the sections of the Code
dealing with dependent administration.
In a
dependent administration, whenever a claim is
allowed by the personal representative, the Court
classifies the claim. Under Section 312(b) of the
Probate Code, the Court classifies a claim within
ten (10) days after the administrator has allowed
it and the claim has been placed on the claims
docket. The Court can approve the claim in
whole, in part or reject it.
Class 5: claims for taxes, penalties and
interest owed to the State of Texas;
Class 6: claims for cost of confinement
established by the institutional division of the
Texas Department of Criminal Justice;
Class 7: claims for repayment of medical
assistance payments made by the State under
Chapter 32, Human Resources Code, to or for the
benefit of the decedent; and
Class 8: all other claims.
If there is a deficiency of assets to pay all claims
of the same class, then such claims shall be paid
pro rata. Probate Code §321. This applies in
both independent and dependent administrations.
Bunting v. Pearson, 430 S.W.2d 470 (Tex. 1968).
Section 322 of the Probate Code sets forth
the eight classes in which the creditor’s claim
may be classified:
Class 1: funeral expenses and expenses
of last sickness for a reasonable amount to be
approved by the Court, not to exceed a total of
$15,000.00, with any excess to be classified and
paid as any other unsecured claim;
2.
Claims for Child Support.
a.
Child Support Accrued Before
Death
If a parent who is obligated to make child
support obligations is in arrears at the time of
such parent’s death, the party to whom the child
support was owed may obtain a judgment against
the estate for the arrearages. The judgment must
be obtained from the Court which retains
jurisdiction over the minor child, commonly the
Family Court which handled the divorce. Tex.
Fam. Code Ann. §157.005 (Vernon Supp. 1999)
Texas Probate Code §322; Martin v. Adair, 601
S.W.2d. 543 (Tex. Civ. App.—Beaumont 1980,
on remand); Fleming v. Easton, 998 S.W. 2d 252
(Tex. App. – Dallas, no writ) (Probate Court
lacked jurisdiction to sign judgment for child
sup p ort arrearag es ; con tin u in g exclu sive
jurisdiction was in District Court that entered
Support Order). After a judgment for delinquent
child support is obtained, the next friend of such
minor child will be considered a creditor of the
decedent’s estate. Hutchings v. Bates, 393
S.W.2d 338 (Tex. Civ. App--Corpus Christi
1965), aff’d 406 S.W.2d 419 (Tex. 1966). The
next friend must then present a claim in the
amount of the judgement against the decedent’s
estate. If the decedent’s personal representative
Class 2: expenses of administration and
ex p en ses in cu rred in th e p res erv atio n ,
safekeeping and management of the estate
including fees and expenses awarded under
Section 243 (the last clause was added to change
the result reached in Hope v. Baumgartner, 111
S.W.3d 775 (Tex. App. - Fort Worth 203, no writ)
(Attorney’s fees awarded to unsuccessful will
contestant were a Class 8 claim under §322, not a
Class 2 claim))
Class 3: secured claims for money under
Section 306(a)(1), including tax liens, so far as
the same can be paid out of the proceeds of the
property subject to such mortgage or other lien
and when more than one mortgage, lien or
security interest shall exist upon the same
property, they shall be paid in order of their
priority;
Class 4: claims for the principal amount
of and accrued interest on delinquent child
support and child support arrearages that have
7
PITFALLS OF THE NOT SO “SIM PLE” PROBATE
denies the claim, the court handling the probate
proceedings is authorized to render judgment for
such debt against the decedent’s estate. Smith v.
Bramhall, 556 S.W.2d 112 (Tex. Civ. App-Waco 1977, writ ref’d n.r.e.).
provides as follows:
(a)(1) A claim of the United States
Government shall be paid first when (A) a person indebted to the
Government is insolvent and
(i) the debtor is without enough
property to pay all debts makes a
voluntary assignment of property;
(ii) property of the debtor, if absent, is
attached, or
(iii) an act of
bankruptcy is
committed; or
(B) the estate of a deceased debtor, in the
custody of the executor or administrator, is
not enough to pay all debts of the debtor.
(b) A representative of a person or an estate . . .
paying any part of a debt of the person or estate
before paying a claim of the Government is liable
to the extent of the payment for unpaid claims of
the Government.
b.
Child Support Accrued After
Death
The estate of a deceased person subject to a
child support order is not liable for child support
accruing after death unless agreed to in writing or
expressly provided in the Divorce Decree or
Child Support Order. Tex. Fam. Code Ann.
§154.006. However, one Court has held that
when a child support order is based on the
parties’ written agreement, the order is binding
on the obligor’s estate if it requires the payment
of child support for a definite amount and for a
definite period of time and does not require the
obligation to terminate at the obligor’s death.
Estate of Gorski v. Welch, 993 S.W. 2d 298 (Tex.
App. - San Antonio 1999, pet. denied).
c.
Credit for Social Security Death
Benefits
There is a split of authority among Texas
courts as to whether a judgment against a
decedent’s estate for child support payments
should be reduced by the amount of social
security or other governmental death benefits
paid to the same claimant as a result of the
decedent’s death. Compare Estate of Gorski v.
Welch, 993 S.W .2d 298 (Tex. App-San Antonio
1999, pet. denied) (credit allowed even though
agreement silent); and Lake v. Lake, 899 S.W.2d
737 (Tex. App-Dallas, 1995, no writ) (no credit
allowed because agreement did not expressly
provide for the credit). Effective September 1,
2001, child support payment obligations are
reduced by disability benefits and social security
old age benefits paid to or for the benefit of the
child. Tex. Fam. Code §§154.132, 154.133.
The cases have interpreted Section 3713 to
require payment to the IRS above other debts of
the estate; h ow ever, fam ily allow an ces,
administration expenses and funeral expenses
have been determined not to be “debts” and
therefore not subject to the superior priority of
the United States’ claims.
United States v.
Weisburn 48 F.Supp. 393 (E.D.Pa.1943); Rev.
Rul. 80-112, 1980-1 C.B. 306.; PLR 8341018
(1983); Schwartz v. Commissioner, 560 F.2d 311
(8 th Cir.1977). Note that only administration
expenses have a priority over federal tax claims
which are secured by a lien. However, not all
cases are consistent on this matter and care
should be taken in insolvent estates in
determining payment of expenses, debts and
claims due to the Federal Government so as not
to make the personal representative personally
liable for such amounts if assets of the estate
were distributed to creditors, family members or
beneficiaries instead.
3.
Debts Due to the United States.
Amounts owed to the United States
Government must be addressed before the
representative can pay any of the claims which
are classified under §322 of the Code. The
Probate Code does not mention amounts which
may be owing to the United States Government.
Under 31 U.S.C.A. §3713(a), a claim of the
United States Government must be paid before
other claims against the estate. Section 3713(a)
4. Order of Payment of Claims.
Although Section 322 provides for the
classification of claims, Section 320 provides the
order of payment of claims and when claims can
be paid. Basically, the order for payment of
claims is as follows: (a) funeral expenses and
expenses of last illness not to exceed $15,000.00;
(b) allowances made to surviving spouse and/or
8
PITFALLS OF THE NOT SO “SIM PLE” PROBATE
children; (c) expenses of administration and
expenses incurred in preservation, safekeeping
and management of the estate; and (d) other
claims against the estate in order of their
classification. After the date letters are granted
and on application by the personal representative
stating that the personal representative has no
actual knowledge of any outstanding or
enforceable claims against the estate, other than
those claims that have already been approved and
classified by the Court, the Court may order the
personal representative to pay any claim that is
allowed and approved. No claims for money
against the estate of a decedent shall be allowed
by the personal representative, and no suit shall
be instituted against the personal representative
on any such claim after an order for the final
partition and distribution is made; but after such
an order has been made, the owner of the claim, if
it is not barred by limitations, shall have an action
thereon against the heirs, devisees, legatees or
creditors of the estate limited to the value of the
property received by them in distribution from
the estate. Probate Code §318.
claim is to be allowed and approved either as a
matured secured claim or a preferred debt and
lien. If the secured claim is not timely presented,
or if the claim is presented without specifying
how the claim is to be paid, it will be treated as a
claim being paid as a preferred debt and lien, and
no deficiency may be allowed against any other
assets of the estate. Probate Code §306(b).
c. c.Matured Secured Claims.
If a secured claim is allowed as a matured
secured claim, the claim shall be paid in the due
course of administration, and the secured creditor
is not entitled to exercise any other remedies,
including foreclosure, in a manner that prevents
the preferential payment of claim s and
allowances as described in the Code. Probate
Code §360(c).
d. Preferred Debt and Lien.
When an indebtedness is allowed as a
preferred debt and lien, no further claim shall be
made against the other assets of the estate by
reason of the claim, but the claim shall remain a
preferred lien against the property securing the
same, and the property shall remain as security
for the debt in any distribution or sale thereof
prior to final maturity or payment of the debt. If
property securing a claim that is allowed as a
preferred debt and lien is not sold or distributed
within six months from the date letters are
granted, the representative of the estate shall
promptly pay all maturities which have accrued
on the debt according to the terms of the contract
and shall perform all of the terms of any contract
securing the same. If the representative defaults
in such payment or performance, on application
of the claimant, the Court shall require the sale of
the property or authorize a foreclosure. The
procedures for a foreclosure and sale of the
property are set forth in Section 306.
5. Secured Creditors.
a. Election by Secured Creditor.
When a secured creditor files a claim for
money against an estate, the creditor must
specify, in addition to the other matters required
in a claim: (1) whether it desires to have the claim
allowed and approved as a mature secured claim
that may be paid in the due course of
administration, in which event, it shall paid if
allowed and approved; or (2) whether it is desired
to have the claim allowed, approved and fixed as
a preferred debt and lien against a specific
property securing the indebtedness and paid
according to the terms of the contract, in which
event it shall be so allowed and approved if it is a
valid lien; provided, however, the personal
representative may pay said claim prior to
maturity if it is in the best interest of the estate to
do so. Section 306(a).
F. Setting Aside Exem pt Assets
In both a dependent and independent
administration, the personal representative is
required to set aside exempt assets for the use and
benefit of the surviving spouse, minor children
and unmarried children remaining with the family
of the deceased. Exempt property is considered
any property of the estate that is exempt from
execution of forced sale by the Constitution and
laws of the State of Texas. This includes the
b. Time for Election.
A secured creditor must make the election
described above within six months after the date
letters are granted, or within four months after the
date notice is received under Section 295 of the
Code, whichever is later. The secured creditor
may present its claim and specify whether the
9
PITFALLS OF THE NOT SO “SIM PLE” PROBATE
homestead and any property exempt from
execution as set forth in the Texas Property Code.
served by police protection, fire protection, and at
least three of the following: electricity, natural
gas, sewer, storm sewer and water. An urban
homestead can consist of no more than ten acres
of land in one or more contiguous lots, and
includes the improvements thereupon.
A
homestead is also considered urban if it is both an
urban home and a place of business. A rural
homestead consists of not more than 200 acres
which may be in one or more parcels and the
improvements thereupon if the home is occupied
by a family; or if the rural home is occupied by a
single adult person, it may not be more than 100
acres.
1. Action by Personal Representative.
Section 271 provides that the personal
representative, immediately after the inventory,
appraisement and list of claims has been
approved, shall by order of the Court, set apart
for the use and benefit of the surviving spouse,
m in or children, and unm arried ch ild ren
remaining with the family, all of such exempt
property of the estate. An independent executor
shall set aside such exempt assets without order
of the Court. Before approval of the inventory,
the surviving spouse, or any person who is acting
or authorized to act on behalf of a minor child of
the decedent, or an unmarried child remaining
with the family of the deceased, may apply to the
Court to have exempt property set aside by filing
an application and verified affidavit listing all of
the property that the applicant claims is exempt.
The applicant bears the burden of proof by a
preponderance of the evidence at the hearing on
the application.
4. Partition of Homestead.
The homestead rights of the surviving
spouse and children of the deceased are the same
whether the homestead be separate property of
the deceased or the community property between
the surviving spouse and the deceased, and the
respective interest of the surviving spouse and
children shall be the same in one case as in the
other. Probate Code §282. Upon the death of a
spouse, the homestead generally retains its prior
definition either as urban or rural; however, in the
case of a rural homestead, the homestead rights of
the decedent’s surviving spouse and children
continue, but only as to one hundred acres of the
rural homestead, as the spouse and child are at
that point determined to be single persons.
United States v. Blakeman, 750 F.Supp. 216
(N.D.Tex 1990), affirmed in part, reversed in
part, 997 F.2d. 1084 (5 th Cir. 1992), cert denied,
510 U.S. 1042 (1994). The homestead may not
be partitioned among the heirs of the deceased
during the lifetime of the surviving spouse, as
long as the survivor elects to use and occupy the
same as the homestead, or so long as the guardian
of the minor children of the deceased is permitted
under proper order of the Court to use and occupy
the same. Section 284. Note, however, if only an
unmarried adult child of the decedent is living in
the homestead, it may be partitioned. When a
surviving spouse dies or sells his or her interest in
the homestead, or elects to no longer use or
occupy the same as a homestead, or when the
proper court no longer permits the guardian of the
minor children to use or occupy the same as a
homestead, it may be partitioned among the
respective owners thereof in a like manner as
other property held in common. Probate Code
§285. The rights of the surviving spouse or child
2. Delivery of Exem pt Assets.
The exempt property set apart to the
surviving spouse and children shall be delivered
by the executor or the administrator without delay
as follows: (a) if there be a surviving spouse and
no children, or if the children be the children of
the surviving spouse, the whole of such property
shall be delivered to the surviving spouse; (b) if
there be children and no surviving spouse, such
property, except the homestead, shall be
delivered to such children if they be of lawful age
or to their guardian if they be minors; (c) if there
be children of the deceased of whom the
surviving spouse is not the parent, the shares of
such children in such exempt property, except the
homestead, shall be delivered to such children if
they be of lawful age or to their guardian if they
be minors; and (d) in all cases, homestead shall
be delivered to the surviving spouse if there be
one, and if there be no surviving spouse, to the
guardian of the minor children or to the
unmarried adult children, if any, living with the
family. Section 272.
3. Homestead.
A homestead can be defined as being either
urban or rural. An urban homestead is located
within a municipality or subdivision, and is
10
PITFALLS OF THE NOT SO “SIM PLE” PROBATE
entitled to homestead rights is considered a
homestead life estate under case law. The
homestead life tenant is required to pay
maintenance and upkeep on the property, taxes,
and interest on any mortgage against the
property. Principal payments on the mortgage
and insurance are the responsibility of the
remainder beneficiaries. Trimble v. Farmer, 157
Tex. 533, 306 S.W.2d 157(1957); Hill v. Hill,
623 S.W.2d 779 (Tex. App.-- Amarillo 1981, writ
ref’d n.r.e.).
estate is insolvent.
An estate is considered
insolvent if the debts exceed the assets; however,
in ascertaining whether an estate is insolvent, the
exempt property set apart to the surviving spouse
or children, or the allowance in lieu thereof and
family allowance shall not be considered as assets
of the estate. Probate Code §280.
If an estate is insolvent, then upon final
settlement of the estate, the title of the surviving
spouse and children to the exempt properties and
allowances in lieu of exempt property shall
become absolute and are not liable for any of the
debts of the estate except for Class 1 claims.
Probate Code §279. If the estate is solvent, then
the exempt property, except for the homestead
and any allowance in lieu thereof, shall be subject
to partition and distribution among the heirs and
distributees of the estate in like manner as the
other property of the estate. This can be a very
powerful tool in an insolvent estate for setting
aside autom obiles, household furnishings,
jewelry and other valuable exempt assets for the
benefit of the surviving spouse, minor children
and unmarried children remaining with the
family.
5. Homestead Free from Debts.
Except as provided in Section 270 of the
Code, the homestead shall not be liable for
payment of debts of the estate. Consequently, if a
constituent family member survives the decedent,
then the homestead passes free from the claims of
creditors, except as to those creditors defined in
Section 270, forever.
Constituent family
members include the spouse, minor children and
unmarried adult children remaining with the
family. In George v. Taylor, 296 S.W .2d 620
(Tex. Civ. App—Fort Worth 1956, writ refused
n.r.e.), the homestead is not liable for the
decedent’s debts following the death of the
widow.
Anyone who inherits the property
receives it free from debt. Further, the homestead
passes free from debt if the decedent is survived
by a constituent family member whether or not
such family member inherits the house.
Consequently, if the decedent is survived by a
minor child, but such minor child’s guardian does
not elect to exercise the minor child’s homestead
rights to live in the home, the homestead passes
free from the claims of creditors to the ultimate
beneficiaries of the homestead. Nat’l Union Fire
Ins. Co. v. Olson, 920 S.W .2d 458 (Tex. App. -Austin 1996, no writ).
G. Setting Allowances
In both independent and dependent
administrations, the personal representative
of the estate is required to set certain
allowances as required by the Code. In a
dependent administration, such allowances
are set by application and order of the Court.
In an independent administration, the
personal representative of the estate sets the
allowances without approval of the Court.
The author of this paper suggests that in an
independent administration, a memorandum
of allowance be filed in the probate
proceeding setting forth the allowances that
have been set by the independent personal
representative.
This documents the
allowances set. See Appendix B. Allowances
such as the family allowance, allowance in
lieu of exempt assets and allowance in lieu of
homestead can allow the surviving spouse
and children to retain more assets of the
estate.
C o n s e q u e n t l y, p e r s o n a l
representatives must always be aware of the
necessity for setting such allowances.
6. Title to Exem pt Assets.
The exempt personal property to be set aside
by the personal representative shall include any
property that is exempt from execution or forced
sale by the Constitution and the laws of the State
of Texas. This includes any property described in
Sections 42.001, et seq. of the Texas Property
Code. A traditional list of exempt assets is found
in Section 42.002, and certain retirement plans,
annuity contracts and life insurance are described
in Section 42.0021. The definition of exempt
property is important because the personal
representative has to determine whether or not the
11
PITFALLS OF THE NOT SO “SIM PLE” PROBATE
780 S.W.2d 913 (Tex. App.—Fort Worth 1989,
no writ).
1. Family Allowance
a.
c. Payment of Allowance.
The family allowance shall be paid in
preference to all other debts or charges against
the estate except Class 1 claims. Probate Code
§290. The family allowance shall be paid as
follows: (a) to the surviving spouse if there is a
surviving spouse for the use of the surviving
spouse and the minor children if such children be
the surviving spouse’s children; (b) if the
surviving spouse is not the parent of such minor
children or of some of them, the portion of such
allowance necessary for the support of such
minor children of which the surviving spouse is
not the parent shall be paid to the guardian or
guardians of such child or children; (c) if there be
no surviving spouse, the allowance to the minor
child or children shall be paid to the guardian or
guardians of such minor child or children; and
(d) if there be a surviving spouse and no minor
children, the entire allowance shall be paid to the
surviving spouse. Probate Code §291.
Time for Setting.
Section 286 provides that immediately after
the inventory, appraisement and list of claims has
been approved, the Court shall fix the family
allowance for the support of the surviving spouse
and minor children of the deceased. However,
before approval of the inventory, a surviving
spouse and any person who is
authorized to act on behalf of the minor child of
the deceased, may apply to the Court for the
family allowance by filing an application and a
verified affidavit describing the amount necessary
for the maintenance of the surviving spouse and
minor children for one year after the date of death
of the decedent, and describing the spouse’s
separate property and any property the minor
children have in their own right. The applicant
bears the burden of proof by a preponderance of
the evidence at any hearing on the application.
The Court shall fix the family allowance for the
support of the surviving spouse and minor
children of the deceased.
2. Allowances in Lieu of Exem pt Property
b. Amount of Allowance.
Section 287 provides that the amount of the
allowance shall be sufficient for the maintenance
of the surviving spouse and minor children for
one year from the time of death of the testator or
intestate. The allowance shall be fixed with
regard to the facts and circumstances then
existing and those anticipated to exist during the
first year. The allowance may either be paid in a
lump sum or in installments as the Court shall
order. The family allowance is a community debt
and therefore will be satisfied in part out of the
surviving spouse’s half of the community assets
under administration.
Miller v. M iller, 235
S.W.2d 624 (Tex. 1951). No allowance shall be
made for the surviving spouse when the survivor
has separate property adequate for the survivor's
maintenance, nor shall such allowance be made to
the minor children when they have property in
their own right adequate for their maintenance.
Section 288. However, it appears that at least one
court does not consider property inherited by the
surviving spouse, or non-probate assets such as
life insurance received by the surviving spouse as
a result of the death of the decedent, when setting
the allowance, although there was no holding to
this effect by the Court. Churchill v. Churchill,
a. Setting Allowances.
Section 273 provides for allowances in lieu
of exempt property if such exempt property is not
on hand
in the decedent’s estate. If there should not be
among the effects of the deceased all or any of
the specific articles exempted from execution or
forced sale by the Constitution and the laws of
the State, the Court may make a reasonable
allowance in lieu thereof to be paid to such
surviving spouse, minor children, and unmarried
children remaining with the family.
An
allowance in lieu of a homestead cannot exceed
$15,000.00 and the allowance in lieu of other
exempted property shall not exceed $5,000.00,
exclusive of the allowance for support of the
surviving spouse and minor children. Instances
where an allowance in lieu of homestead might
be appropriate is when the decedent and the
family were living in rented property or if the
mortgage on the homestead is so high that the
surviving spouse or minor children cannot
reasonably be expected to pay the mortgage and
therefore, the home is unavailable for their
occupancy. Ward v. Braun, 417 S.W.2d 888
(Tex. Civ. App.—Corpus Christi 1967, no writ).
12
PITFALLS OF THE NOT SO “SIM PLE” PROBATE
The exempt property other than the homestead or
an allowance made in lieu thereof, shall be liable
for payment of Class 1 claims, but such property
shall not be liable for any other debts of the
estate, as provided in Section 281. Consequently,
an allowance in lieu of homestead is paid before
any other claims. An allowance in lieu of exempt
property may be liable for payment of Class 1
claims but has priority over all other claims.
Further, if the estate is determined to be insolvent
under Section 280, then the allowance in lieu of
exempt property shall be set aside for the
surviving spouse, minor children and unmarried
children remaining with the family above any
other debts of the estate, except in Class 1 claims.
H. Non-probate Assets
In most instances, creditors of an estate
cannot reach non-probate assets. Non-probate
assets such as life insurance, IRA’s and qualified
plan assets pass pursuant to the beneficiary
designations and are outside the reach of the
decedent’s creditors unless paid to the estate.
Parker Square State Bank v. Huttash 484 S.W.2d
429 (Tex. Civ. App—Fort Worth 1972, writ
refused); Pope Photo Records, Inc. v. Malone
539 S.W.2d 224 (Tex. Civ. App.—Amarillo 1976,
no writ). However, some non-probate assets,
such as multi-party bank accounts and joint
tenancy with rights of survivorship may be
subject to the claims of creditors. Section 442 of
the Code provides that any multi-party bank
accounts, including right of survivorship
accounts, may be made available as necessary to
pay the decedent’s debts, taxes and expenses of
the administration, including statutory allowances
to the surviving spouse and children if other
assets of the decedent’s estate are insufficient.
Further, any party receiving payment from a
multi-party account after the death of the
decedent shall be liable to account to the
decedent’s personal representative for such taxes
and debts of the decedent, up to the amount
passing to the person from the bank account.
However, in order for the payee to be liable, the
personal representative must receive a written
demand from the surviving spouse, a creditor, or
one acting on behalf of the decedent’s minor
child. Any such action must be brought within
two (2) years after the decedent’s date of death.
A financial institution will not be liable for
paying such sums on deposit to the payee or
beneficiary, unless it receives written notice from
the personal representative stating that the sums
on deposit are needed to pay debts, taxes and
expenses of administration.
b. Delivery of Allowances.
Section 275 provides that the allowance in
lieu of exempt property shall be paid as follows:
(1) if there be a surviving spouse and no children,
or if all of the children are the children of the
surviving spouse, the whole shall be paid to the
surviving spouse; (2) if there be children and no
surviving spouse, the whole shall be paid to and
equally divided among them if they be of lawful
age, but if any of such children are minors, their
share shall be paid to their guardian; and (3) if
there be a surviving spouse and children of the
deceased, some of whom are not the children of
the surviving spouse, then the surviving spouse
shall receive one-half (½) of the whole plus the
shares of the children of whom the survivor is the
parent, and the remaining share shall be paid to
the children of whom the survivor is not the
parent, or if they are minors, to their guardian.
3. Timely Setting Allowance.
By properly setting a family allowance and
allowances in lieu of exempt property, the
personal representative of the estate can have
more non-exempt assets set aside for the benefit
of the spouse and children over other claimants
against the estate.
Consequently, this is an
important part of the duties of the personal
representative, and a personal representative can
be held liable for failure to properly set such
allowances. Further, many courts will not set a
family allowance if the request is made more than
one year after the date of death, the reason being
that if the surviving spouse or minor children
have managed for more than one year, there is
not a need to set allowances to support them for
that year.
II.
RECOVERING
TANGIBLE
ASSETS
A.
Right to Possession
A personal representative has both the right
of possession and the duty to acquire possession
of all estate assets. Probate Code § 37 provides:
[U]pon
13
the
issuance
of
letters
testamentary or of administration
upon any such estate, the executor
or administrator shall have the
right to possession of the estate as
it existed at the death of the
testator or intestate, with the
exception aforesaid; and he shall
recover possession of and hold
such estate in trust to be disposed
of in accordance with the law.
inconclusive in nature. It is not used to resolve
substantive legal issues. A show cause order
requires another to appear and show cause why
an order directing some action should not be
issued. If no such cause is shown, the order will
be entered.
Some courts have questioned the use of a
show cause order. In Francis v. Beaudry, 733
S.W.2d 331 (Tex. App. – Dallas 1987, writ ref’d
n.r.e.), the Administrator of an estate filed a
Motion to Show Cause requesting the court to
order two remaining stock holders of a
corporation of which the decedent owed an
interest to appear and show cause why they
should not be required to pay to the
Administrator a certain sum of money allegedly
owed to the decedent. The two stockholders
appeared, and the court conducted a full trial on
the issue and entered a money judgment against
them. Although the court of appeals affirmed the
judgment for other reasons, the court specifically
commented “in order that future litigants will not
be led astray by the procedure used” that the
proper procedure would have been to file an
original petition rather than a motion to show
cause. However, the court noted that the trial
court conducted the proceedings as though the
motion to show cause was in fact an original
petition and that neither of the defendants
objected to the procedure or raised any point of
error concerning the use of the motion to show
cause. This case may be distinguishable from
other cases on the basis that the show cause
proceeding was used to address what appeared to
be substantive legal issues. See also Poindexter
v. Brandon, 527 S.W.2d 824 (Tex. App. – El
Paso 1975, no writ).
The personal representative “shall collect and
take into possession the personal property,
records books, title papers and other business
papers of the estate.” Probate Code §232. In
addition, the personal representative is required to
use ordinary diligence to recover possession of all
property of the estate provided there is a
reasonable prospect of recovering such property.
If the personal representative willfully neglects to
use such diligence, he will be personally liable.
Probate Code §233. The executor’s right of
possession is not limited by the fact that there are
no debts or that the one claiming the property is
the sole distributee. Atlantic Ins. Co. v. Fulfs,
417 S.W.2d 302, 305 (Tex. Civ. App. - Fort
Worth 1967, writ ref’d n.r.e); Bloom v. Bear, 706
S.W.2d 146, 147 (Tex. App. - Houston [14 th
Dist.] 1986, no writ) (Probate court was obligated
to sign order directing that prospective devisee
deliver decedent’s property to independent
executor).
Upon the issuance of Letters Testamentary,
the executor should immediately request that any
person having possession of assets, records or
other property of the decedent’s estate turn over
such items to the executor. If these informal
requests are not successful, the executor has
several options.
B.
Other cases, however, have made no
objection to the show cause procedure. In Powell
v. Hartnett, 521 S.W.2d 896 (Tex. App. –
Eastland, 1975, no writ), the Administrator filed a
motion requiring an individual to appear and
show cause why he should not be required to
deliver certain money in his possession alleged to
belong to the decedent. The court ordered and
directed the individual to turn over the funds to
the Administrator. The court specifically stated
that the “order does not dispose of the issue of
ownership of the money or note, a fact
recognized by Powell. It merely places the items
under the care and control of the Probate Court
until a final determination of ownership be
made.” Similarly, in Brooks v. Norris, 1997 W.
Show Cause Order
The most expeditious procedure is a show
cause proceeding. A show cause order is a
creature of the common law, but the case law is
sparse. See Texas Mexican Ry. Co. V. Locke, 63
Tex. 623, 1885 WL 7097 (1885); Turner v.
Turner, 576 S.W.2d 452 (Tex. App. - Houston [1 st
Dist.] 1978); Green v. Green, 424 S.W.2d 479
(Tex. Civ. App. - Tyler 1968, no writ). Executors
and administrators are governed by the principles
of the common law, if they do not conflict with
the provisions of Texas Statutes. Probate Code
§32. A show cause Order is preliminary and
14
L. 695588 (Tex. App. – Dallas) (not for
publication), a judgment creditor whose claim
had been allowed by the Administrator and
approved by the Probate Court obtained a show
cause order against Brooks requiring him to show
why he should not be required to vacate the
decedent’s house and deliver all of the decedent’s
assets to the Administrator. The Probate Court
ordered Brooks to vacate the house and surrender
the decedent’s property. The Court of Appeals
affirmed the judgment without commenting on
the use of the show cause procedure. See also
Texas Mexican R’y Co. v. Locke, 63 Tex. 623,
1885 W.L. 7097 (Tex.) (Although filing a
petition may have been better approach, show
cause was sufficient for purposes of this case).
purposes the estate remains all the
while under the jurisdiction of the
County Court probating the Will under
which he is acting.
C.
Order Under Sections 232, 233.
As previously mentioned, a personal
representative is required to immediately collect
and take into possession the personal property,
records books, title papers and other business
papers of the estate and to use ordinary diligence
to recover possession of all estate property.
Probate Code §§232, 233. Although the author
has not used this approach, these sections appear
to authorize the court to issue an order directing
an individual to turn over estate assets to the
personal representative. In Bloom v. Bear, 706
S.W .2d 146, 147 (Tex. App. – Houston [14 th
Dist.] 1986, no writ) the independent executor of
an estate had attempted on three separate
occasions to have the probate judge sign an order
directing an individual to deliver property
admittedly belonging to the decedent in such
individual’s possession, but the probate court had
refused.
The independent executor filed a
mandamus action. Citing Sections 37, 232 and
233 of the Probate Code, the Court of Appeals
found that the executor’s right to possession and
duty to acquire such possession, are enforceable
by court order. The Court of Appeals found no
authority allowing the individual to maintain
possession of the property until the validity of her
claim was settled and held that the judge’s refusal
to sign the order constituted an abuse of
discretion.
The usual procedure is to first file a Motion
for Show Cause Order, present it to the Judge ex
parte and obtain an Order to Show Cause, which
directs the party to appear and show cause, if any,
why the requested order should not be made.
Citation must be served on the defendant and the
hearing date set after the Monday following at
least ten (10) days from the date of service.
Probate Code §33(f)(1). At the hearing, evidence
is presented, and an Order on the Order to Show
Cause will be signed either granting or denying
the requested action. Sample forms are attached
as Appendix C.
The Section 145(h) limitation on judicial
supervision of an independent executor should
not prevent an Independent Executor from
obtaining a show cause order. Such section
prohibits a court from interfering in an
independent executor’s administration of an
estate, but does not prohibit an independent
executor from accessing the courts.
An
independent executor is entitled to the same
judicial relief available to other parties. As stated
in Etter v. Tuck, 91 S.W .2d 875 (Tex. Civ. App. Dallas 1936, writ dismissed);
D.
File Suit and Seek Injunctive Relief
An executor or administrator may file suit to
recover estate property and should do so if there
is a reasonable prospect of recovering the
property. Probate Code §§232, 233, 233A. In
connection with such a lawsuit, a “mandatory”
temporary restraining order and/or temporary
injunction that compels the defendant to turn over
the disputed property to the Administrator
pending a final determination of ownership could
be requested. The rules governing injunctive
relief are found in Texas Civil Practice and
Remedies Code §65.001 et. seq.
An Independent Executor is not a law
unto himself.
His “independence”
consist largely in his right in the
administration of such estate to do
without an order of the County Court
every act which he could do with such
an order, were he acting under the
control of such court . . .
His
management of the estate is an
“Administration” of the same in
contemplation of the law, and for some
A statutory county court exercising probate
jurisdiction or statutory probate court is
authorized to issue writs of injunction and all
15
writs necessary for the enforcement of the
jurisdiction of the court.
Tex. Gov. Code
§25.0004. See Lucik v. Taylor, 596 S.W.2d 514
(Tex. 1980) (injunctive relief is “incident to an
estate” because it directly bears on the ultimate
collection and distribution of estate assets.);
Smith v. Lanier, 998 S.W.2d 324 (Tex. App. Austin 1999, writ denied); Dodson v. Seymour,
664 S.W.2d 158 (Tex. App. - San Antonio 1983,
no writ); and Edder v. Tuck, 91 S.W.2d 875 (Tex.
Civ. App. - Dallas 1936, writ dismissed). See
also Estate of Lee, 981 S.W.2d 288 (Tex. App. Amarillo 1998, writ denied).
Based on the
administrator’s right to possession of the property
during the estate administration and his duty to
protect and preserve estate property, and the
beneficiarys’ right to receive the decedent’s
property, the elements of irreparable injury and
lack of an adequate legal remedy should be met.
E.
Contempt Actions
1.
Authority of the Court to Find Contempt
subjective in nature and, therefore, should only
have decisions rendered on a case by case basis.
Neither the Texas Rules of Civil Procedure nor
the Texas Civil Practice and Remedies Code
furnish us with a definition of the term contempt.
Civil contempt has been defined, however, as
conduct which impedes, embarrasses, or obstructs
the Court; or interferes or prejudices parties or
witnesses; and places the authority for
administering the law in disrespect or impedes
the court’s operation. Black’s Law Dictionary,
Page 288 (5 th ed. 1979).
There are recognized two separate and
distinct types of contempt – criminal and civil.
Acts of criminal contempt are those which go
against the dignity of the Court. See Ex Parte
Landry, 65 Tex. Crim. App. 1912). These are
acts which show disrespect to the court or to its
process or which obstruct the administration of
justice. Ex Parte Arapis, 157 Tex. 627, 306
S.W.2d 884 (1957).
Criminal contempt has
sometimes been called direct contempt and is an
appropriate response for conduct in open court
which denounces, insults and slanders the court
and which paralyzes its proceedings. Mayberry
v. Pennsylvania, 400 U.S. 455, 91 S.Ct. 499, 27
L.Ed.2d 532 (1973).
If a person ordered to turn over estate
property refuses to do so, the Court may use its
contempt powers. The statutory probate court,
the county court at law with probate jurisdiction,
the constitutional county court, and the district
court all possess authority to enforce their acts
and orders through the use of contempt powers.
These courts may punish acts of civil contempt
by a fine not exceeding $500, confinement in the
county jail for not more than six (6) months, or
both a fine and confinement. Tex. Gov. Code
§21.002(b). Alternatively, the court may order
confinement of the party until the contemptor
purges the contempt by complying with the court
order which gave rise to the contempt. Ex Parte
Werblud, 536 S.W.2d 542 (Tex. 1976). While it
is correct that a contemptor may be confined until
he or she has complied with the court order, a
habeas corpus action is proper where the
contemptor does not have the power to comply.
Ex Parte DeWees, 146 Tex. 564, 210 S.W.2d 145
(1948).
In addition to general contempt
authority, the Probate Code also permits the
county or probate judge to confine executors,
administrators and guardians for up to three (3)
days for each offense of failure to obey court
orders. See Tex. Prob. Code Ann. §§24, 651.
Contrary to criminal contempt actions which
are usually assessed as punishment, civil
contempt or constructive contempt actions are
generally instituted to preserve and enforce the
rights of private parties to suits and to compel
obedience to court orders and decrees. See Ex
Parte Padron, 565 S.W.2d 921 (Tex. 1978). A
contempt proceeding is generally by its very
nature considered criminal, whether it arises out
of a criminal or civil action. Willson v. Johnston,
404 S.W.2d 870 (Tex. Civ. App. – Amarillo
1966, no writ). The only recourse provided for a
contempt judgment is a habeas corpus in the
appellate court. In a habeas corpus proceeding,
the guilt or innocence of the person is not at issue
and it is only the legality of the detention that is
in question. Ex Parte Friedman, 808 S.W.2d 166
(Tex. Civ. App. – El Paso - 1991, no writ).
Additionally, there exist two subcategories of
contempt, direct and constructive, each of which
is discussed below.
3.
2.
Direct Contempt
Definitions
Criminal
and
civil
contempt
are
Acts of direct contempt are those which take
place in the presence of the court and which are
both
16
subject to summary punishment.
Ex Parte
Werblud, supra at 546. In such cases, punishment
may take the form of fine or commitment to jail,
without charges, without notice and without a
hearing. Tex. Gov. Code §21.002. A finding of
direct contempt may be oral and the judge may
summarily punish the offender by fine and/or
confinement. Ex Parte Norton, 144 Tex. 445,
191 S.W.2d 713 (1946).
The procedural
requirements for a direct contempt order are:
a.
The court must have
jurisdiction of both the
subject matter and of the
parties.
Typically, the
court has continuing
jurisdiction
over
d ependent estates or
guardianships; however,
in independent estates,
one must make sure that
the jurisdiction of the
Court has been invoked
b e f o r e se e k in g th is
extreme relief.
b.
There
must
be
substantial evidence to
validate the contempt
judgment.
M ere
s u s p i c i o n
o f
disobedience
or
interference will not do.
Deramus v. Thornton,
1 6 0 T ex. 4 9 4 , 3 3 3
S.W.2d 824 (1960).
c.
4.
for constructive contempt are:
A written order of
com m itm en t either
separately, or as a part of
the contempt order, must
be submitted.
Constructive Contempt
Actions of constructive contempt are acts
which usually take place outside the presence of
the court. Constructive contempt is not presumed
to exist and the burden of proof is more stringent.
Ex Parte Cragg, 133 Tex. Crim. 118, 109 S.W .2d
479 (1937). The contemptuous acts must be
those which tend to belittle, degrade, obstruct,
interrupt, prevent or embarrass the administration
of justice. See Ex Parte Payle, 134 Tex. 148, 133
S.W.2d 565 (1939). The procedural requirements
17
a.
The Court must have
jurisdiction of both the
subject matter and of the
parties.
b.
There must be a specific
written complaint which
alleges the facts
necessary to form the
b asis
fo r
th e
contemptuous acts. The
person must receive full
and
unambiguous
n o tific a tion of th e
accusation of his or her
contemptuous conduct.
The notice should be in
the form of a show cause
order personally served
on
the
alleged
contemnor, and should
state when, how and by
what
means
the
con tem n o r has been
guilty of contempt. Ex
Parte Friedman, supra,
at 169.
c.
Reasonable notice must
be given to the party
charged with the acts and
omissions.
d.
There must be a hearing
conducted on the charges
of contempt. Where the
contempt sentence is
under six months, there
is no right to a jury trial.
A t the hearing, the
alleged contemnor may
not be forced to testify
and may even refuse to
be sworn as a witness.
See Ex Parte Werblud,
supra, at 548. A jury
trial is guaranteed where
the cumulative amount
of punishment exceeds
six months. Punishment
for contempt cannot be
d e te r m in e d p rio r to
h ea ring.
E x P a rte
Griffin, 682 S.W.2d
261 (Tex 1984),
states that it is
incumbent on the
trial judge to advise
the contemnor of his
right to a trial by
jury if the potential
punishm ent has
“serious” overtones.
Ex Parte Sproull,
815 S.W .2d 250
(Tex. 1991), states
that the trial court
record must show
affirmative notice of
the right to a jury
trial and a waiver of
such right will not
be presumed.
Ex
Parte Mathis, 822
S.W.2d 727 (Tex.
App. – Tyler 1991,
no writ).
e.
f.
g.
must be entered. Thus,
where an attorney agreed
to prepare an order to
ap p oint a tem p orary
adm inistrator an d to
transfer and freeze
assets, and the order
freezing the assets was
never signed, there was
no basis for a contempt
proceeding. Without the
signed order there was
not violation upon which
a contempt could be
based. See Parham v.
Wilbon, 746 S.W.2d 347
(Tex. App. – Fort Worth
1988, no writ).
h.
E v id en c e
must
be
offered to prove the
contemptuous conduct.
Thus, w here a will
contestant was ordered to
produce a diamond ring
taken at the deathbed of
decedent and failed to do
so, and then produced a
different
ring,
imprisonment
for
contempt was found to
be proper. See Clanton
v. Clark, 639 S.W.2d
929 (Tex. 1982).
5.
There must be a written
order of commitment, or
the commitment must be
a part of the judgment.
Ex Parte Barnett, 600
S.W.2d 252 (Tex. 1980).
Distinguishing Contempt
The method used most often to distinguish a
criminal or direct contempt from a civil or
constructive contempt is to look at the method
used for purging the contempt. When a criminal
contempt of court occurs, the penalty is typically
confinement for a finite number of hours or days
and/or a fine which is solely for the purpose of
punishing the contemnor. Beverly v. Roberts,
215 S.W . 975 (Tex. Com. App. 1919). In
contrast, the penalty for a civil contempt action is
coercive and remedial in nature, and the primary
purpose is not to punish, but to bring the
contemnor in compliance with the court’s order.
Imprisonment is conditional upon obedience and
therefore, the civil contemnor “carries the keys to
his prison in his own pocket.” Ex Parte Werblud,
supra, at 545.
The moving party must
also
show
by a
preponderance of the
evidence that the
contemnor has violated a
court order. See Whatley
v. Whatley, 493 S.W.2d
299 (Tex. Civ. App. –
Dallas 1973, no writ).
6.
Due Process
a. Notice
Where the court’s basis for contempt is not
founded on direct acts of the contemnor in open
court, a formal Motion for Contempt must be
filed and it must be served personally on the
person to be held in contempt. Ex Parte Avila,
659 S.W.2d 443 (Tex. Crim. App. 1983). The
A written order or
judgment reciting the
court’s jurisdiction and
the acts of misconduct
18
importance of the type of notice provided must be
stressed in that a contempt judgment without
proper service is void.
Therefore, personal
service is required regardless of whether the
contemnor has counsel. Ex Parte Herring, 438
S.W.2d 801, 803 (Tex. 1969).
constructive con tempt
confin ed w ithout a
written order. Also, any
contempt order must be
reduced to writing within
a reasonable time. Ex
Parte Calvillo Amaya,
748 S.W.2d 224 (Tex.
1988).
The contempt
order
must
be
unambiguous and correct
as to its findings. If the
o rd er con tain s tw o
grounds as a basis for
contempt and only one is
co rrect, the en tire
judgment is void.
Ex
Parte Lee, 704 S.W.2d
15 (Tex. 1986); Ex Parte
Herrera, 820 S.W.2d 54
(Tex. App. – Houston
[14 th. Dist.] 1991 no
writ).
To accommodate due process considerations
in a contempt action, complete and adequate
notice of the alleged acts must be furnished the
party to be charged. This notice must tell the
contemnor when, how, and by what means he or
she has been guilty of contempt. Ex Parte
Martin, 656 S.W.2d 443, (Tex. Crim. App.
1982); Ex Parte Bagwell, 754 S.W.2d 490 (Tex.
App. – Houston [14 th Dist.] 1988, no writ).
b.
Pleadings
(1) Specificity - Any party
c h a r g e d
w i t h
disobedience or failure to
comply with a court
order or direction, must
receive a copy of the
specific court order prior
to th e tim e that
compliance was ordered.
Ex Parte Blanchard, 736
S.W .2d 642 (Tex 1987).
Be aware that any show
cause order which
merely directs a person
to appear at a date, place
and time certain without
more specific details
would be insufficient to
inform that person of the
accusations against him
and, thus, fail to support
an order of contempt. Ex
P a rte G o rdon, 584
S.W.2d 686 (Tex. 1979).
A failure to extend the
minimum requirements
of due process to the
party renders a judgment
of contempt void. Ex
Parte Pink, 645 S.W.2d
262 (Tex. Crim. App.
1982).
(3) Opportunity to Purge A co u rt sh ou ld , in
constru ctive contem pt
situations, provide the
person, where possible,
an opportunity to purge
himself from
his
contem ptuous actions.
Thus, a judgment would
be void and habeas
corpus proper, where the
con ditions for th e
purging of oneself from
co n tem p t c a n n o t b e
performed.
Ex Parte
Chennault, 776 S.W.2d
7 0 3 (T e x . A p p . –
T e x arkan a 19 8 9 , n o
writ). It is important that
the substance of a motion
is not to be determined
from its caption or
heading, but from its
body and prayer for
relief.
Therefore, the
grounds for contempt
and the actions needed to
cure such contempt must
b e rev ea le d to th e
con temnor by the
pleadings. See Woodruff
(2) Ambiguity
- A court
may not verbally order a
person found guilty of
19
v.
Cook, 721
S.W.2d 865 (Tex.
App. – Dallas 1986,
writ ref’d n.r.e.). Ex
Parte Werblud,
supra, at 545.
c.
provided w ith the
assistance of counsel
where imprisonment may
be imposed as a
punishment.
Ex Parte
Goodman, 742 S.W.2d
536 (Tex. App. – Fort
Worth 1987, no writ).
There is no specific
guidance on how the
court is to determine that
the contem ptor is
indigent.
Miscellaneous Provisions
(1) Continuance of Hearings
- Where a contempt
action is warranted, and
ordered, but is then
suspended by agreement,
it may not be reurged
w h en n on co m p lia n c e
occurs without a
subsequent hearing. In
like fashion, when the
original order of
contempt is suspended
for any reason, there
must be a subsequent
hearing, with notice and
evidence, before the
court may determine that
a b reach of the
conditions of the
suspension exist. In re:
Sanchez, 698 S.W .2d
462 (Tex. Civ. App. –
Corpus Christi 1985, no
writ); Ex Parte Pink,
supra, at 264; Re: Ross,
749 S.W.2d 289 (Tex.
App. – Houston [14 th
Dist.] 1988, no writ).
(3) Officers of the Court The judge is not
permitted to summarily
punish an officer of the
court even where the
cond uct is deem ed
con tem p tu ou s.
Due
process requires that the
officer of the court be
granted a hearing before
another judge.
Tex.
Gov.
Code
sec.
21.002(d). See also, Ex
Parte Martin, supra, at
444. The officer of the
court should, in most
situations, be released on
his
or
her
own
recognizance, pending
th e h e a rin g of th e
c o n te m p t p ro c e e d in g
before another judge.
(4) Monetary Sanctions - It
is important to note that
while the imposition of
monetary sanctions may
be made by the trial
court, they must be
properly applied. Thus,
in Ex Parte Conway, 843
S.W.2d 765 (Tex. App. –
H ou ston [14 t h D ist.]
1992, no writ), the court
denied the application
when faced with a claim
that the monetary
sanctions precluded the
litigant’s free access to
the courts. The imposing
of sanctions does not in
(2) Appointment of Counsel
– In a contem pt
proceeding a probate
court or court exercising
p rob ate ju risd iction
could be required to
provide counsel to an
indigent person. When a
con tem p t ac tion is
instituted, due process
requires that before an
indigent person may be
charged with contempt,
he or she must be
20
itself restrict access
where payment is
deferred until final
judgment. Branden
v. D o w ney, 8 1 1
S.W.2d 922, 929
(Tex. 1991).
The
trial court can
regulate trials, and
p u n i s h
f o r
contempt. Ex Parte
Jones, 331 S.W.2d
202 (Tex. 1960).
But its power is not
unlimited. It must
restrict p aym en t
u n t i l
t h e
proceed ings h ave
concluded or hold a
hearing and make
s p e c if i c f in d in g s
that the sanction
does not violate the
l i t i g a n t ’ s
constitutional rights.
Thomas v. Capital
S e c u r ity S e r v ic e ,
Inc., 836 F.2d 866,
8 8 2 -8 3 (5 th C ir.
1988).
conflicts of interest. It is advisable to have the
court supervise the classification priority and
payment of claims in an insolvent estate. W here
there are substantial debts owed by the decedent,
application of the formal claims procedures may
eliminate certain creditors.
Where there are
disputes among the beneficiaries and/or with the
independent executor, a dependent administration
will offer protection for all parties and avoid
unnecessary delay and expense.
2. In order to convert, the independent
executor would file an application to resign and
for the appointment of a successor. Probate Code
§221. If necessary, the court may immediately
appoint a successor without citation or notice.
Probate Code §§221, 220. Otherwise, the notice
and hearing requirements prescribed for original
applications would apply. Probate Code §223.
Under Section 145(r), a resigning independent
executor may be appointed as the dependent
executor or administrator.
The resigning
independent executor probably would not be
required to file a Final Account, but due to the
successor’s duty to investigate the actions of the
predecessor, it may be advisable if the successor
is not the same person as the prior independent
executor. See DiPortanova v. Hutchinson, 766
S.W.2d 856 (Tex. App. -- Houston [1 st Dist.]
1989, no writ). Since the successor dependent
administrator is not named in the will, he will not
have the powers and duties given to the executor
named in the will. His powers and duties will be
conferred by the Probate Code. Probate Code
§224. In addition to the powers conferred by the
Probate Code, the court may grant to the
dependent administrator certain powers specified
in the will under certain circumstances. Probate
Code §154.
The successor must file an
Inventory, Appraisement and List of Claims
within ninety (90) days after qualification.
Probate Code §227.
If the dependent
administrator is different from the independent
executor, the former independent executor must
deliver all of the property and records of the
estate to the successor. Probate Code §232.
Section 296 provides that the published notice to
creditors, the permissive notice to unsecured
creditors and the notice to secured creditors need
not be repeated by a successor personal
representative. However, this provision does not
appear to contemplate a change in the type of
administration. Due to the difference in the
requirement for the form and presentment of
claims in a independent administration and a
(5) Delay - Where an order
of contempt was not
reduced to writing and
signed until three days
after the contemptor’s
confinement, the order
was void and habeas
corpus will issue Ex
Parte Jord an, 865
S.W.2d 459 (Tex. Civ.
App. 1993).
III. C O N V E R T I N G
BETWEEN
INDEPENDENT AND DEPENDENT
ADMINISTRATIONS
A.
C onverting
Dependent
f ro m
In d ep en d en t
to
1. This might be considered if it is determined
that an estate is insolvent or has substantial
unanticipated debts, there are beneficiaries who
are unhappy, disputing or making inconsistent
demands, or the independent executor has
21
dependent administration, the safer approach
would be to reissue the notices to the creditors
whose time to file a claim has not expired.
B.
C o n v e r tin g
from
Depen den t
Independent Administration
potential for conflicts of interest. The author
strongly suggests that, under such circumstances,
a beneficiary should decline to serve as the
personal representative or serve only as a
dependent administrator. Some of the potential
issues are discussed below.
to
1. Converting from a dependent administration
to an independent administration will be required
if a lawful will is discovered after letters of
administration have been issued. Probate Code
§220(e). Conversion also might be considered
where an anticipated insolvent estate or one
involving substantial creditor or beneficiary
disputes turns out to be less controverted or the
problem areas are resolved and conversion would
save administration expenses.
1.
Probate Code §177(b)
The personal representative of the
decedent’s estate administers all of the jointly
managed community property, including the
surviving spouse’s one-half, pursuant to Probate
Code Section 177(b), which provides as follows:
W hen an executor of the estate of a
deceased spouse has duly qualified,
such execu tor is au th orized to
administer, not only the separate
property of the deceased spouse, but
also the community property which
was by law under the management of
the deceased spouse during the
continuance of the marriage and all of
the community property that was by
law under the joint control of the
spouses during the continuance of the
marriage. The surviving spouse, as
surviving partner of the marital
partnership, is entitled to retain
p o ss ess io n a n d c o n tr o l o f all
community property, which was legally
under the sole management of the
surviving sp ou se du rin g the
continuance of the marriage, and to
exercise over that property, all the
powers elsewhere in this part of this
Code authorized to be exercised by the
surviving spouse when there is no
administration pending on the estate of
the deceased spouse. The surviving
spouse may by written instrument filed
with the clerk waive any right to
ex erc is e p o w e r s as c o m m u n ity
survivor, and in such event, the
executor or administrator of the
deceased spouse shall be authorized to
administer upon the entire community
estate.
2. The steps for converting from dependent to
independent are the same as discussed above
except that a resigning dependent administrator’s
application to resign must be accompanied by a
final account. The court may immediately accept
such resignation and appoint a successor if
necessary but shall not discharge the resigning
representative until his final account has been
approved. Probate Code §221.
3. Immediately upon the appointment of an
independent executor, the independent
administration begins and the former
dependent administration ceases, despite the
fact that the dependent administrator has not
yet been officially discharged. The probate
court is not authorized to withhold funds in
the registry of the court from the independent
executor pending final discharge of the
dependent administrator.
D’Unger v.
DePena, 931 S.W.2d 533 (Tex. 1996).
IV. A D M I N I S T E R I N G
COMMUNITY PROPERTY IN
DISPUTED ESTATES
A.
Introduction
Difficult issues can arise where the
surviving spouse is not the sole beneficiary of the
decedent spouse’s share of the community
property and the character of the property as
community or separate is in dispute. If the
named executor is not the surviving spouse and is
a beneficiary under the will, serving as the
personal representative presents tremendous
2.
Fiduciary Duties
Since the executor of the deceased spouse’s
estate administering 177(b) property holds
property belonging to, and for the benefit of, the
surviving spouse, the executor is a fiduciary and
owes the fiduciary duties of a trustee in
22
connection with the administration of all of the
community estate. See Probate Code §37; Bailey
v. Cherokee Cty. Appraisal Dist., 862 S.W2d 581
(Tex. 1993); Ertoel v. O’Brien, 825 S.W.2d 17
(Tex. App. – Waco 1993, writ denied);
McLendon v. M andel, 862 S.W.2d 662 (Tex.
App. – Dallas 1993, writ denied); Humane Soc’y
v. Austin Nat’l Bank, 531 S.W.2d 574, 577 (Tex.
1975). An Arizona case clearly defines this
fiduciary relationship.
Estate of Shano v.
Fiduciary Services, Inc., 177 Ariz. 550, 869 P.2d
1203 (1994) (because the administrator was
entitled to possess and administer the survivor’s
community property, the administrator owed the
surviving spouse fiduciary duties.) The fiduciary
duty of loyalty prohibits the executor from using
his position to gain any benefit for himself at the
expense of any beneficiary. Slay v. Burnett Trust,
187 S.W.2d 377, 388 (Tex. 1945). A transaction
is unfair if the fiduciary significantly benefits
from it as viewed in light of circumstances
existing at the time of the transaction. Estate of
Towns v. Towns, 867 S.W.2d 414, 417 (Tex.
App. – Houston [14 th Dist.] 1993, writ denied)
The executor should not be allowed to benefit at
the expense of the Section 177(b) property, either
in an individual capacity or on behalf of the
estate. This type of conflict would arise if the
executor took a position regarding the character
of probate assets that was adverse to the
surviving spouse and beneficial to the executor as
a beneficiary (i.e., that certain assets were the
decedent’s separate property rather than
community property. Such a conflict probably
would render the administrator incapable of
performing his duties. See Hitt v. Dumitrov, 598
S.W.2d 355, 356 (Tex. Civ. App. – Houston [14 th
Dist.] 1980, no writ). In Estate of Shano v.
Fiduciary Services, Inc., the Arizona Court of
Appeals held that the competing interests
between the administrator of the decedent’s estate
in his role as manager of the survivor’s interest in
th e co m m u n ity p ro p erty p rev en ted th e
administrator from exercising the independent
judgment necessary to discharge his fiduciary
duty to the surviving spouse. The court quoted
an old proverb to define this dilemma, “no man
can serve two masters.” See Id. at 556. In Home
Insurance Company v. Wynn, 229 Ga. 220, 493
S.E.2d 622, 626 (1998), the Georgia Court of
Appeals also described this type of conflict of
interest:
fairly in two capacities and to represent
antagonistic interests on behalf of two
interests in the same transaction.
Consciously or unconsciously [s]he
will favor one side as against the other.
If one of the interests involved is that
of trustee personally, selfishness is apt
to lead [her] to give [her]self an
advantage. If permitted to represent
antagonistic interests the trustee is
placed under temptation and is apt in
many cases to yield to the natural
prompting to give [her]self the benefit
of all doubts.
The executor would have a conflict of
interest in taking any position regarding the
character as estate property as community or
separate and would violate his duty of loyalty to
the surviving spouse if any community funds
were spent to pursue a position adverse to the
surviving spouse. These conflicts are less likely
to occur in a dependent administration because
court approval is required to take any action,
including expenditure funds, payment of claims,
and filing suit. If these issues arise after an
independent administration has been established,
consideration should be given to converting to a
dependent administration to avoid breach of
fiduciary duty claims against the executor. If this
is not practical, it may be necessary to recognize
that the personal representative may not be able
to serve both as executor of the decedent’s estate
and as manager of the Section 177(b) property.
3.
Inventory
If the character of property as separate or
community is in dispute, even the filing of an
inventory can present potential fiduciary issues
for the executor. The inventory is required to
specify what property is separate and what is
community property. Probate Code §250. The
executor should not file the inventory in a manner
that is beneficial to some beneficiaries and
harmful to others if there is a bonafide dispute.
Although an inventory that has been approved
does not conclusively determine the character of
the property, it does serve as prima facie evidence
of the property’s character.
Also, an order
approving an inventory is a final, appealable
order. McKinley v. McKinley, 496 S.W.2d 540
(Tex. 1973); Krueger v. Williams, 163 Tex. 545,
359 S.W.2d 48 (1962); Garner v. Long, 106
S.W.3d 260 (Tex. App. – Fort Worth 2003, no
It is generally, if not always, humanly
impossible for the same person to act
23
pet. h.). Thus, if an inventory is filed pending a
dispute that is contrary to a beneficiary’s
position, the beneficiary should object to the
inventory. If the inventory is approved, the order
should be appealed.
Otherwise, the order
approving the inventory will become final and
would appear to reverse the community property
presumption.
In order to comply with the
fiduciary duty of loyalty to all beneficiaries of the
property under administration, the executor
should remain neutral in connection with
disputed matters. The author suggests that where
the separate and community property character of
estate assets are in dispute, that a preliminary
inventory be filed reflecting the disputed property
without characterizing it as separate or
community, indicating the nature and existence of
the dispute, and stating that an amended
inventory will be filed when the dispute has been
resolved.
compensation of the executor (which probably
would be limited to the statutory commission
under §241(a) as to the survivor’s property under
administration), accountings by the executor,
bond requirements, and the allocation and
p a ym e n t o f e x p e n s e s r e la tin g to t h e
administration of community property.
For
further discussions of these issues, See Ikard,
AD M INISTRATIO N O F CO M M U NITY
PROPERTY AFTER A SPOUSE’S DEATH, 1996
Annual Advanced Estate Planning and Probate
Course; and Hopwod & Patterson, PROBATE
DISPOSITION
COMMUNITY
ADMINISTRATION, 2003 Annual Advanced
Estate Planning and Probate Course.
V. DEALING
PAYING CLIENT
A.
Probate Code §156
Section 156 provides that the decedent’s
sole management community property and the
joint management community property continue
to be subject to the deceased spouse’s liabilities
upon death. The personal representative of the
deceased spouse’s estate must keep a “separate,
distinct account of all community debts allowed
or paid in the administration and settlement of
such estate.” Should the decedent’s personal
representative also segregate the surviving
spouse’s one-half interests in the community
property or in the disputed community property?
In order to properly account to the surviving
s p o u se, p ro p erly allo cate re c e ip ts a n d
ex p en d itures and pay comm unity deb ts,
segregation would seem to be required.
WITH
THE
NON-
Representing the Independent Executor
4.
1.
Engagement Letter
As with all clients, it is important to have an
engagement letter that specifies the scope and
nature of the legal representation, the relative
responsibilities of the attorney and the client, and
defines the attorney’s com pensation and
reimbursement of expenses. The engagement
letter should state that the attorney represents the
executor solely in his fiduciary capacity and not
individually, if he also is a beneficiary of the
estate. In addition, the engagement letter should
state that attorney’s fees and expenses are estate
administration expenses payable out of estate
assets. If the estate has liquidity problems, the
agreement should specify how legal fees will be
paid. If a sale of property will be necessary in
order to pay fees, it may be advisable to specify
the property to be sold to avoid any
misunderstandings. The terms of the will and the
abatement provisions of Section 322B of the
Probate C ode sh ou ld b e considered in
determining what property would be sold.
Section 322B provides for the sale of a
decedent’s property for debts and expenses of
administration (other than estate taxes) in the
following order:
5.
Powers of Executor
In a 177(b) administration; the issue is
whether the executor of the deceased spouse’s
estate derives his powers and duties relating to
the administration of the surviving spouse’s
interests in the community estate from the
decedent’s will or from the Probate Code.
Although no Texas case has addressed this issue,
it would seem that the powers should be
governed by the Probate Code rather than the
decedent’s will since the will covers only the
decedent’s property. This raises numerous issues
regarding the executor’s ability to take actions
relating to the surviving spouse’s property,
including the need for prior court approval to
expend or sell any of the §177(b) property,
(1) p r o p e r t y
not
disposed of by will,
b u t passing by
intestacy;
(2) personal property of
24
the residuary
estate;
require the heirs or the independent executor to
post bond for an amount equal to the creditors
claim under Sections 148 and 149, respectfully.
If an order requiring a bond is signed, it suspends
the powers of the executor and he may not pay
out any money of the estate or do any other
official act, except to preserve estate property,
until the new bond has been approved. Probate
Code §207. If the bond is not timely filed, the
executor may be replaced. Probate Code §213.
(3) real property of the
residuary estate;
(4) general bequests of
personal property;
(5) general devises of
real property;
B.
R epresenting
the
Dependent
Administrator
Non payment of attorneys’ fees should not
be an issue in a dependent administration because
attorneys’ fees are approved and ordered paid by
the court.
(6) specific bequests of
personal property;
and
(7) specific devises of
real property.
The above provisions apply absent a different
intent expressed in the will. Similarly, if the
executor will need to borrow money to pay
administration expenses, this should be specified.
The agreement also should include a right to
withdraw for non-payment of fees.
C.
Representing a Beneficiary
It is important to have a specific engagement
letter when representing a beneficiary as they
often are inexperienced in legal matters and in
dealing with attorneys. A retainer is highly
recommended as a “reality check” for what is
often a highly emotionally-charged situation for
the client. The attorney may want to consider a
provision in the fee agreement by which the
beneficiary agrees that the executor may pay his
or her attorney’s fees and expenses directly to the
attorney out of the beneficiary’s share of the
estate. The Agreement also should provide for
costs, particularly litigation costs such as
depositions, medical, bank or other records and
expert witness fees, to be paid directly by the
client. The agreement also should include a right
to withdraw for non-payment of fees.
2.
Retainer
Attorney’s fees for representing the executor
are administration expenses payable from estate
assets. Unless the executor also is the sole or
primary beneficiary of the estate, it may be
difficult to obtain a significant retainer prior to
probate of the will. The fee agreement could
provide for payment of a specific retainer upon
admission of the will to probate and qualification
of the executor.
3.
Non-payment
If the independent executor fails to pay
attorney’s fees and expenses, the attorney may
withdraw from the representation.
Rule
1.15(b)(5) of the Texas Disciplinary Rules of
Professional Conduct. As a creditor of the estate,
the attorney may file suit against the estate to
recover fees for services rendered for the benefit
of the estate. As in any suit to recover fees from
a former client, the risk of a malpractice
counterclaim exists. However, this claim would
be tried before a probate judge having special
expertise in the subject matter of the
representation.
If a judgment for fees is obtained, the
attorney, as a judgment creditor, could seek to
25
26
APPENDIX A
SAMPLE OF LETTER
Date
«FirstName» «LastName», «JobTitle»
«Company»
«Company2»
«Address1»
«City», «State» «PostalCode»
RE: «Decedent»
«AccountNo»
Dear «Title» «LastName»«Company»:
You are hereby given notice that «Decedent» is deceased. He/She died on «Dateofdeath».
Letters of Administration were issued to «Administrator» on «Dateofletters» in Cause No.
«CauseNo» in the Probate Court Number «Probatecourt» of Tarrant County, Texas. Our
records indicate that «Company» «Company2» may have a claim against the estate. You must
properly present a claim for the amounts owed to you within four (4) months after the date of
receipt of this notice or your claim is barred (if your claim is not already barred by the general
statutes of limitation).
The claim should be addressed to «Administrator», c/o
_______________________.
I represent the Administratrix of the Estate and therefore cannot provide you with legal
assistance on your requirements in filing this claim with the Court. If you have additional
questions regarding your duties in filing a claim, you should consult with an attorney in Texas.
Sincerely yours,
APPENDIX B
NO. ________________
ESTATE OF
__________________
DECEASED
§
§
§
§
§
IN THE PROBATE COURT
NO. ___________
TARRANT COUNTY, TEXAS
MEMORANDUM OF ALLOWANCES
TO THE HONORABLE JUDGE OF SAID COURT:
Now comes ________________, Independent Executor of the Estate of ___________________ and
files this his/her Memorandum of the allowances set aside by Independent Executor in accordance with
the Texas Probate Code. Prior to the approval of the Inventory, Appraisement and List of Claims in
this Estate, the Independent Executor in accordance with Section 146 of the Texas Probate Code set
aside a family allowance in the amount of $_____________ to compensate the surviving spouse and
minor child for one year taking into account the circumstances of the family. The family allowance was
delivered to the surviving spouse since the minor child is also the child of the surviving spouse.
Also, in accordance with Section 146 of the Texas Probate Code, Independent Executor delivered to
surviving spouse an allowance in lieu of exempt property in the amount of $___________ to
compensate the surviving spouse and minor child for exempt assets not on hand at the time of death.
This allowance was delivered to the surviving spouse since he is also the parent of the minor child. The
total allowances were allocated to the community estate.
Respectfully submitted,
SWORN TO AND SUBSCRIBED before me this ______ day of _____________________, 200_,
by ________________, ___________________, of the Estate of __________________________, to certify
which witness my hand and seal of office.
Notary Public in and for the
State of Texas
My Commission Expires:
APPENDIX C
NO. 1234-P
IN RE: ESTATE OF
JOHN SMITH,
DECEASED
§
§
§
§
§
IN THE PROBATE COURT
OF
DALLAS COUNTY, TEXAS
MOTION FOR ISSUANCE OF SHOW CAUSE ORDER TO JANE SMITH
_________________________, Independent Executor of the Estate of John Smith,
Deceased (“Movant”), files this Motion for Issuance of Show Cause Order to Jane Smith (“Jane
Smith”) and, in support thereof, would respectfully show the Court as follows:
1.
John Smith (“Decedent”) died on October 1, 2003, survived by his fourth wife, Jane
Smith, and his two natural children and two step-children. The Last Will and Testament of John
Smith (the “Will”), was admitted to probate in this cause, and Movant was appointed
Independent Executor of the Estate of John Smith (the “Estate”).
2.
Disputes have arisen among the beneficiaries of the Estate regarding the ownership
and/or character of certain property as being the Decedent’s separate property of the community
property of Decedent and Jane Smith.
3.
All records relating to Decedent’s separate property and the community property of
Decedent and Jane Smith jointly controlled during their marriage, Decedent’s personal
memorabilia and separate property as well as the community personal property of Decedent and
Jane Smith (the “Items”), are in the possession, custody and/or control of Jane Smith or her
agents. As the Independent Executor, Movant is entitled to possession of these Items. Despite
having the legal right to possession of the Items, Movant has made many attempts to work out a
fair and mutually agreeable arrangement to give the Estate and all the beneficiaries equal and
unrestricted access to the Items, but all such attempts have been either rejected or ignored by
Jane Smith. Jane Smith has refused, and continues to refuse, to deliver the Items to Movant.
Cause No. 1234-P
4.
Jane Smith resides at ________________________________. Movant requests the
Court to order Jane Smith to appear at a time and place to be set by the Court and Show Cause
why she should not deliver, or cause to be delivered, to Movant all of the Items described above;
and to account for the Items that are no longer in her possession, custody and/or control.
5.
Due to the actions of Jane Smith, it has been necessary for Movant to incur attorney’s
fees and expenses. Movant requests that the Court order Jane Smith to pay Movants’ reasonable
and necessary attorney’s fees and costs incurred to obtain the records described herein.
WHEREFORE, PREMISES CONSIDERED, the Independent Executor of the Estate of
John Smith, Deceased, requests the Court to order Jane Smith to appear at a time and place set
by the Court and show cause why she should not deliver, or cause to be delivered, to Movant all
Items described above, to account for the Items that are no longer in her possession, custody
and/or control, and for any other further relief, at law or in equity, to which they may show
themselves to be justly entitled.
Respectfully submitted,
______________________________________
Attorneys for Independent Executor
NO. 1234-P
IN RE: ESTATE OF
§
§
§
§
§
JOHN SMITH,
DECEASED
IN THE PROBATE COURT
OF
DALLAS COUNTY, TEXAS
ORDER TO JANE SMITH TO SHOW CAUSE
ON THIS day came on to be considered the Motion for Issuance of Show Cause Order to
Jane Smith filed by the Independent Executor of the Estate of John Smith, Deceased (“Movant”),
and the Court, after considering said Motion, is of the opinion that the Motion should be
GRANTED.
IT IS, THEREFORE, ORDERED that Jane Smith appear before this Court at _________
o’clock, _____ a.m. on the ___ day of ___________, 2004, and Show Cause why she should not
deliver, or cause to be delivered, to Movant all records relating to John Smith’s separate property
and the community property of John Smith and Jane Smith jointly controlled during their
marriage, John Smith’s personal memorabilia and separate personal property, as well as the
community personal property of John Smith and Jane Smith that are in the possession, custody
and/or control of Jane Smith or her agents, and to account for such items that are no longer in her
possession, custody and/or control.
IT IS, FURTHER, ORDERED, that the Clerk of this Court issue Notice to be personally
served on Jane Smith at _______________________, Dallas Texas, together with a copy of the
Motion for Issuance of Show Cause Order to Jane Smith and a copy of this Order, by any Sheriff
or Constable of the State of Texas or by any other person who is not a party and is not less than
eighteen (18) years of age, directing and requiring that Jane Smith appear in the Courtroom of
the Probate Court of Dallas County, Texas at ___ o’clock, at ___.m, on the __________ day of
________________, 2004, to Show Cause why she should not deliver, or cause to be delivered,
to Movant all records relating to John Smith’s separate property and the community property of
John Smith and Jane Smith jointly controlled during their marriage, John Smith’s personal
memorabilia and separate personal property, as well as the community personal property of John
Smith and Jane Smith that are in the possession, custody and/or control of Jane Smith or her
agents, and to account for such items that are no longer in her possession, custody and/or control.
Signed this ___ day of _______________, 2004.
______________________________________
JUDGE PRESIDING
NO. 1234-P
IN RE: ESTATE OF
§
§
§
§
§
JOHN SMITH
DECEASED
IN THE PROBATE COURT
OF
DALLAS COUNTY, TEXAS
ORDER ON ORDER TO SHOW CAUSE
On the ___ day of __________________, 2004 at a regular term of court pursuant to Order
to Jane Smith to Show Cause and to appear before the court on _____________ __, 2004, Jane
Smith
appeared
in
person
and
by
and
through
her
attorney of
record,
and
___________________________, Independent Executor of the Estate of John Smith, Deceased,
appeared in person and by and through her attorney of record, and the Court proceeded to call
the matter on the Court’s docket, and the parties announced in open court that an agreement had
been reached in regard to certain matters addressed in the Order to Jane Smith to Show Cause;
and the Court having sworn Jane Smith and __________________ as witnesses inquired of each
of them whether the agreement that had been reached was in fact their agreement and based upon
such agreement the court makes the following orders.
IT IS ORDERED that Jane Smith make available, on or before ______________ ___, 2004,
the premises known as ______________________________, Dallas, Texas for inventorying and
appraising the personal property located in such premises as well as the premises at a storage
facility in Dallas for inventorying and appraising such property located in such storage unit and
to deliver the property in such storage unit to ______________________, Independent Executor
of the Estate of John Smith, Deceased; and
IT IS FURTHER, ORDERED that Jane Smith deliver a ________________ automobile and
_________________
owned
by
the
Estate
of
John
Smith,
_____________________, Independent Executor of the Estate immediately; and
Deceased
to
Cause No. 1234-P
IT IS FURTHER, ORDERED that this matter be continued on the court’s docket until
further orders of the Court.
SIGNED this ____ day of ____________________, 2004.
______________________________________
JUDGE PRESIDING
APPENDIX D
NO. 1234-P
IN RE: THE ESTATE OF
JOHN SMITH,
DECEASED
§
§
§
§
§
IN THE PROBATE COURT
OF
DALLAS COUNTY, TEXAS
APPLICATION TO APPOINT
PERSONAL REPRESENTATIVE OF ESTATE
COMES NOW, BANK OF TEXAS and files this application, pursuant to Article III of the
Last Will and Testament of John Smith, for the appointment of a successor corporate personal
representative and would show the Court as follows:
I.
BANK OF TEXAS has submitted and filed its resignation as Independent Executor of the
Estate of John Smith, Deceased.
II.
The Estate of John Smith, Deceased, is still in administration and a necessity exist for the
continued administration of such estate.
III.
The Last Will and Testament of John Smith provides in Article III that in the event of the
resignation of Bank of Texas, the Probate Court of Dallas County, Texas, upon application made
therefore, shall appoint a successor corporate independent executor, who shall be a bank or trust
corporation situated in the City of Dallas, Texas having trust powers and having an unimpaired
capital and surplus of not less than Ten Million Dollars ($10,000,000.00). Pursuant to such
provision, this Court should appoint a successor corporate independent executor.
IV.
In the event that this Court is unable to find a bank or trust corporation meeting the
requirements provided in the Last Will and Testament of John Smith, which is willing to serve as
successor independent executor, Bank of Texas would be willing to serve as Dependent
Administrator With Will Annexed under the Probate Code.
WHEREFORE, PREMISES CONSIDERED, BANK OF TEXAS prays that the Court hear
this application and appoint a successor corporate independent executor pursuant to the terms of
the Will of John Smith, or, in the alternative, appoint a successor Dependent Administrator With
Will Annexed, and grant such other and further relief as the Court may deem appropriate.
Respectfully submitted,
__________________________________
Attorneys for Applicant
STATE OF TEXAS
COUNTY OF DALLAS
§
§
§
I, _______________________, a Vice President of Bank of Texas acting for and on behalf
of Bank of Texas do by these presence acknowledge that I have read the above and foregoing
Application to Appoint Personal Representative of Estate and that the contents thereof are true
and correct to the best of my knowledge and belief.
______________________________________
___________________________
SWORN TO AND SUBSCRIBED TO before me by
___________________________ on this day of ___________________, 2004.
the
said
______________________________________
Notary Public, State of Texas