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128 Cards in this Set

  • Front
  • Back
Specific Gifts of Encumbered Property

Are liens "Exonerated"?
1) For Wills executed before Sept. 1, 2005, absent contrary will provision liens on specifically devised property are exonerated from residuary estate

2) for wills executed on or AFTER Sept. 1, 2005, the "exoneration of liens" doctrine abolished by statute and don't apply.
Reference to Acts and Events outside of will

Incorporation by Reference Doctrine
An extrinsic document, not present when the will was executed and thus not part of the duly executed will, can be incorporated by reference into the will if:
1) Writing must be in existence when the will was executed
2) Will must show an intent to incorporate the writing; and
3) Document must be clearly identified by language in will "such that there can be no mistake as to the identity of the document referred to."

"Attached sheet" language is not sufficient to identification of the will must show no mistake to the identity of the extra doc. Can use typewritten on a holographic writing.
What happens to the extra interest that is on a extra document and it cannot be incorporated in with the will?
the interest falls to the residuary estate.
Reference to Acts and Events outside of will

Acts of independent significance ("Nontestamentary Acts")
This involves a lifetime act with a lifetime purpose or motive.
Examples- you take if a car given to you in the will was traded for another vehicle. you take if a painting is moved from the livingroom to the diningroom.

you take the personal property and the contents inside if the will says so. but that DOES NOT include the contents of title documents (deeds, stock certificates, bank passbooks, etc. )
Other Wills Doctrines
1) Mistakes and ambiguities in the will
2) Contracts relating to the wills
3) Nonprobate assets
4) Effect of disinheritance clause (negative bequest)
Mistakes or Ambiguities in the Will
Under the plain meaning rules, if there is no ambiguity, then extrinsic evidence is not allowed. Absent suspicious circumstances, it is conclusively presumed that the testator read the will and intended all of its contents.

If there is a Latent Defect- (on the face there is no way it was intended this way (misdesciption), extrinsic evidence is allowed. If the extrinsic evidence doesn't help, then the gift fails for being too ambiguous.

Patent Ambiguity- bequeath twenty-five dollars ($25,000)- conflict of terms (a mistake on the face of the will) all and every extrinsic evidence is allowed.
Contracts relating to wills-
a contract to make a will or not to revoke a will "can be established only by:
(1) provisions in the will stating that a contract does exist and stating the material provisions of the contract" OR
(2) a binding and enforceable written agreement.

The execution of a joint will or reciprocal wills does not itself suffice as evidence of the existence of a contract.

Contractual will can be revoked by giving notice to other party to the contract.
Nonprobate assets
Are interests that pass at death other than by will or intestacy; are not part of the probate estate for administration purposes.
What are the MAIN TYPES of nonprobate assets (also called nontestamentary assets)
1) Property passing by right of survivorship (joint bank account, etc)
2) Property passing by conduct: Life insurance, employee death beenfits
3) Property held in trust, including a revocable trust; trust govern distribution
4) Property over which the decedent held a power of appointment.

***you cannot change a life insurance beneficiary by will***
Effect of Disinheritance Clause- "Negative Bequest"
It doesn't matter if there is a creation of a free residuary estate due to divorce or whatever.
Words to disinheritance in a will are given full effect. We treat the negatively treated party as though they predeceased the testator. (If negatively treated person has children, they would take as heirs)
Powers of Appointment- Purpose
the purpose for this is to permit the life beneficiary to designate the remaindermen.
The beneficiary can be a donee of a general testamentary pwoer of app't. This means that she is not limited in the class of beneficiaries to whom she can appoint; she can appoint the property to anyone , including herself, OR her creditors, OR her estate. Descendants, then, are takers in DEFAULT of APP'T, as they will take the property on beneficiary's death of the power of app't is not exercised.

Her will MUST expressly exercise the PoApp't.
Exercise the Power of Appointment by implication?
Yes. The law recognizes this. If the trust assets subject to the testamentary power of appointment included a piece of land that was part of the power of appointment, that is enough to delegate the property by app't.
Special testamentary power of appointment.
language that shows the beneficiary is limited in the class of persons to whom she can appoint.
If there is a special designation, then the beneficiary's appointment must be specific in their will - IN TEXAS.
To exercise a PoApp't, there must be a specific reference to the power.
Will contests:

What must be alleged and proved to show that a testator had sufficient mental capacity to make a will?
Assuming that the testator is of legal age, Did the testator have sufficient capacity to:
1) Understand the nature of the act he was doing?
2) Know the nature and approximate value of his property?
3) Know the natural objects of his bounty?
4) Understand the disposition he was making?
Evidence effect in a will contest on 4 points
Evidence of T's capacity or lack thereof must relate to the circumstances at the time the will was executed, or shortly before or thereafter. The more distant in time a particular fact mat be, the less significance it has on the question in issue: Did T have capacity when the will was executed?
What is the legal test for determining capacity to grant under will?
Adjudication of incapacity involves a different legal test (capacity to contract, to manage one's affairs) than capacity to make a will

Jury could find that the will was executed during a lucid interval (meaning a fleeting moment where he satisfied the 4 Qs)
The adjudication of incapacity is admissible as evidence of lack of testamentary capacity, but it will not support a directed verdict.
What are the time limits for a will contest?
If a will is contested at time offered for probate, BoP is on will proponents to show that T had capacity. AFTER the will is admitted to probate (upon proof of its execution), contestants have the BoP on capacity, and have 2 years in which to file a will contest. For contest based on fraud or forgery, contestants have 2 year after its discovery; person under disability (including minor) can file contest w/in 2 years after disability removed. One who accepts benefits under a will is estopped from contesting it, but only if he had full knowledge of the facts on which the contest might be based when he accepted the distribution
Who may contest a will?
Interested Parties only can bring a will contest: Persons with an economic interest that would be adversely affected by the will's probate. Heirs, legatees under earlier will whose interest would be defeated if this will probated. Close personal friend, not named as legatee in an earlier will, has no standing to contest T's Will. B could not contest Will #2 that bequeathed to him more than Will #1, but if he were an heir he could contest both. Executor named in Will #1, having duty to offer it for probate and defend it, had standing to contest will #2 which would revoke it.
Assuming that a person is of sufficient are and capacity to make a will, discuss briefly what must be alleged and proved to establish undue influence?
Undue influence: Existence of a testamentary capacity subjected to and controlled by a dominant influence or power. Contestant, who has burden of proof, must prove:
1) Existence- and exertion of the influence
2) Effect- was to overpower the mind and will of the testator; and
3) product- was will (or gift in will) that would not have been made BUT FOR the influence.

"Influence is not undue unless the free agency of the testator was destroyed and a will produced that expresses the will, not of the testator, but of the one exerting the influence."
What evidence is NOT enough to show undue influence?
1) Mere opportunity to exert influence. Mere fact that one child (who received major share of estate) lived with mother, write checks for her, balanced the checkbook, helped on income tax, held a power of att'y...is not evidence that the opportunity was taken advantage of.
2) Mere SUSCEPTIBILITY to influence due to illness, age Fact that Mother was very old, had broken a hip, had lapses in memory, took Valium...this is not evidence of undue influence.
3) Mere fact of UNNATURAL DISPOSITION--i.e. that some children take less than others or are excluded entirely.
General Rule of undue influence
Where a will is procured by one in a confidential relationship, there is an influence of undue influence, which is strengthened when there are suspicious circumstances.

If an inference is raised, while this doesn't affect the burden of proof (contestant still has BoP), will proponent has the burden of going forward with evidence that no undue influence was exerted. If the will proponent does not produce sufficient rebuttal evidence, the inference satisfies the contest's BoP.
Lawyer drafting in the will
If a lawyer drafts a will that makes a gift to the lawyer, or to his parent or a descendant of a parent, or to his employee, or to their spouses, the gift is VOID unless beneficiary was related to testator WITHIN THE 3RD degree of CONSANGUINITY (birth or adoption) or AFFINITY (marriage)
How do you determine the steps of consaguinity and affinity?
1) you count and then add
2) steps from Testator up to common ancestor, and
3) steps down from common ancestor to beneficiary
If there is an action to annul the marriage due to a testator's lack of capacity (after his death), when must it be brought?
1) If the marriage took place within 3 years of the testator's death, and
2) the action is filed within 1 year after his death
What is an "in terrorem" clause?
This is a "no contest" of the will clause. No contest clauses are given full effect UNLESS trial court finds that the contest was brought in good faith and with probable cause. (i.e. it wasn't a strike suit designed to extract a settlement). No-contest clauses are STRICTLY CONSTRUED. They do not apply to will construction suit ir action brought against executor alleging improper administration of estate. Reason: does not challenge validity of will. Contests by guardian or incapacitated beneficiary did not trigger no-contest clause; gift should not be forfeited by action of someone other than beneficiary. No-contest clause not triggered by mere filing of a will contest if party takes a voluntary dismissal.
Estate Administration
Central feature of TX estate administration law: INDEPENDENT ADMINISTRATION. In most states, all estates are subject to substantial court supervision, with numerous court hearings, notices, etc., even as to routine details. In Texas, TPC Sec. 145 states that a will may name an indepedent executor , and provide (as TX wills invariably provide) that no action shall be held in the courts other than probate of the will, and filing an inventory, any required appraisement, and list of claims of the estate.
What is the Consequence to estate administration with TX using INDEPENDENT ADMINS?
The consequence is that most TX estates are administered the same way as trusts are administered: WITHOUT COURT SUPERVISION OR INVOLVEMENT
When is an independent administration authorized under the Penal Code?
1) When provided by will (any words informal or formal will suffice)
2) OR If all distributees agree. (if all distributees agree, there can be an independent administration in cases of intestacy or where will does not name independent executor (UNLESS probate judge finds independent administration not in best interest of the estate). But if independent executor is name in the will, probate court cannot veto.
What are other circumstances concerning independent administrations?
1) if will creates a trust, income beneficiaries must agree on the independent administration (no need to get consent from remaindermen)
2) if distribute is minor or incapacitated, guardian (or, if no guardian, guardian ad litem appointed by court) can agree
3) if will makes gifts conditioned on survival by eg 90 days, for this purpose it is presumed that distributee so survived.
Absent provision in the will broadening the independent executor's powers, what are the powers of an independent executor with respect to the following transactions?
General Test: Independent executor has the power to do, without court order: Anything a dependent administrator (under court supervised administration) can be authorized to do with court order. However, the act must relate to: (a) proper settlement of the estate, or (b) preservation of the estate assets.
1) Sale of real estate
2) Sale of personal property
3) Borrowing Money

***Yes to all as long as one of the above tests are met***
What if the will does not give the independent administrator the power of sale?
Then any purchaser from executor has burden to show that executor had authority to sell the real or personal property. If there was enough cash in the estate to pay debts, the purchaser IS NOT PROTECTED.
Who are entitled to accounting and when in an independent administration?
Interested parties are entitled to an accounting from independent executor UPON DEMAND
1) 15 months after will admitted to probate, and successive accounting's ON DEMAND
2) 12 months after last accounting was rendered.
What procedures MAY an independent executor use to chose the administration?
1) FILE CLOSING REPORT WITH VERIFIED AFFIDAVIT
2) FILE FOR DECLARATORY JUDGMENT
What entails the optional procedure that an independent executor file a closing report with verified affidavit?
Closing report show:
1) property initially received
2) debts and expenses paid; and
3) names and addresses of distributees.
What entails the optional procedure that an independent executor to file a declaratory judgment?
this means the I/E is seeking judicial discharge of independent executor from further liability.
For an estate under independent administration when and by whom may the closing or distribution of the estate be compelled?
Interested party can petition for distribution of estate within 2 year after independent executor was appointed. There must be a "show cause hearing by petition" asking the Q: "why aren't you done yet?
What actions must the personal representative (executor if named in will; administrator if appointed by court) take within 120 days after appointment?
1) Must POST FIDUCIARY BOND w/in 120 days (unless bonding requirement was waived by the will)
2) Must PUBLISH NOTICE OF ADMINISTRATION in newspaper of general circulation w/in 1 month.
3) Must FILE INVENTORY of estate w/in 90 days (unless time period was extended by the court)
4) Must give NOTICE (and copy of the will) TO NAMED WILL BENEFICIARIES within 60 days after will admitted to probate
5) Must FILE CERTIFICATE that NOTICE TO BENEFICIARIES has been given w/in 90 days.
Independent Executor may be removed by the court for cause if:
1) Fails to return inventory w/in 90 days after appointment (unless time was extended by court)
2)Fails to give notice to beneficiaries w/in 60 days after will admitted to probate, or fails to file certificate that beneficiaries have been given notice w/in 90 days.
3) Has misapplied or embezzled estate property, or there is cause to believe he is about to do so.
4) Fails to make a required accounting (on demand by interested parties 15/12 month rule)
5) Is guilty of gross misconduct or mismanagement
6) Becomes incompetent or is sentenced to penitentiary.
Jurisdiction
1) Counties with Statutory County Courts at law or Statutory Probate Courts (e.g. Harris County, Dallas, Bexar, Tarrant): County Courts has exclusive original jurisdiction; appeal is the the CoAs.
2) Counties w/ only Constitutional County Courts: county and district courts have concurrent jurisdiction
Additional Jurisdiction Rule pertaining to the Counties with Constitutional county Courts at law.
1) uncontested matters- (routine probates and guardianship administrations): County Court
2) Contested matters are transferred to district court on motion; return to county court for further administration when contested matter is resolved. Alternatively, county court judge can request that a statutory probate judge be assigned to the case.
Do the same jurisdictional rules apply to a guardianship proceeding?
Yes. they are the same identical rules.
Discuss methods by which the estate can be administered with the least burden and cost...
General principle- Texas law favors informal administration of estates. But if we have land, securities titled in the decedent's name; some procedure to CLEAR TITLE required, to recognize ownership rights of successors by will ot intestacy
What are the Steps to Clear title?
1) Independent Administration (if all distributees agree)
2) Probate will as a muniment of title ONLY
3) Statutory Heirship Proceedings
4) Small estate administration
5) Unqualified community Administration for the purpose of paying community debts
6) Nonstatutory affidavit of Heirship
7) Temporary Administrator
Probate will as a muniment of Title only
This is only when there is a will. When D left a valid will and there is no need to have an executor appointed (even though an executor was named in the will) and no need to formally administer his estate (family can wind up decedent's affairs informally), BUT formal recognition (e.g. lang records) is needed to establish the title of successors named in the will. The will and the order admitted it to probate constitute a muniment of title (a link in the chain of title) that serves the same record function as a deed.
An order admitted will to probate as muniment of title cannot be entered unless there are NO UNPAID DEBTS (other than mortgage on the h/s). Funeral expenses, debts, etc. should be paid before the petition for muniment of title probate is filed
Statutory heirship Proceedings
When D died intestate and there is no need to formally administer his estate, BUT formal recognition (e.g. land records) needed to establish title of successors by inheritance. Judgment states that the person died intestate, names and addresses of persons determined to be the heir, and shares of the estate that each is entitled to take.
The order entered in the statutory heirship proceeding also can be used to (e.g.) collect a bank account in the decedent's name. The bank or other party who pays over in reliance on the order is protected as fully as if payment had been made to the decedent's personal representative (executor or administrator.)
Small Estate Administration by Affidavit
If the value of intestate decedant's probate estate (not counting h/s, exempt personal property) is less than $50K. Affidavit (issued by court clerk) serves the same function as letters testamentary granted to an executor (or letters of administration granted to an administrator). Party with the affidavit can collect the decedent's assets (e.g. bank account in her name) by furnishing a copy of the affidavit.
Can a small estate administration be used to clear title to the decedent's h/s?
(the affidavit must be recorded in the county where the land is located)
Yes. But the Small Estate option can only be use for other real property if that real property qualifies as h/s property.
Unqualified community Administration for the purpose of paying community debts
Under TPC Sec. 155, a wife has the authority to sell real property or any other community property assets as unqualified community administrator (i.e. she didnt have to qualify in probate court) for the purpose of paying community debts. However, if there is sufficient cash on hand to pay community debts, spouse does not have any power to sell assets as unqualified community administrator.
Nonstatutory Affidavit of Heirship
used primarily to clear title to land where owner died years ago and no action was taken to clear title at that time. Affidavits by neighbors or relatives recite the facts of family history, that mom died intestate, that her heirs were son and daughter, etc. Affidavit is filed in county records-- and Texas title insurance companies and title examiners will act in reliance on validity of recitals in the affidavit.
Unsuccessful attempt to probate will- who is entitled to attorney's fees?
the independent executor is entitled to the attorney's fees of an unsuccessful probate attempt if she did so in good faith. The reason is that we want executors to offer wills to probate.
Temporary Administrator-
A T/A can be appointed "pending appointment" of a permanent personal representative (e.g. will contest has been file, meaning the will naming an executor has not been probated). The T/A's powers are limited to those granted by the court. If the T/A is appointed pending a will contest, the appointment continues until termination of the contest and appointment of a permanent representative. In ALL OTHER CASES, the T/A CANNOT EXCEED 180 days.
When there is real property in multiple counties, what must the executor do to inventory and file record title to a beneficiary?
You need to file certified copies of the will and the order admitting it to probate. Go up and file it in the other county. Even if the decedent died out of state and the probate proceeding is in that different state. If there is property in a county in Texas, you must get the certified copies of the probate order and will and file it in the county where the property is.
What if there is Will #1 which is admitted to probate and people relied on that admission to probate, then there is a Will #2 found that revoked the earlier Will #1?
Order admitted the Will #1 to probate win b/c the order admitting the will to probate was validly ordered. BFP relied on the valid court order and are protected. the beneficiary under the Will #2 may have an action against the seller of the property under Will #1 b/c he did not own, rightfully, the property.
What is the SoL of admitting a will to probate?
4 years. UNLESS the party offering the will for probate shows that he was "not in default" for not probating the will within that period. STATED ANOTHER WAY, T's will CAN be admitted it probate IF BUT ONLY IF it is shown that the party offering the will is "not in default" for failure to probate it earlier, in which case the will can be probated as a minument of title; but no personal representative can be appointed and no estate administration can be opened more than 4 years after death.
What is the priority as to who is to be appointed personal representative?
1) executor named in the will
2) surviving spouse
3) principle beneficiary named in the will
4) any other benficiary named in will
5) next of kin, in nearest order of kinship (only the surviving spouse and next of kin would apply in an intestacy situation).

Disqualified from appointment are minors, incapacitated persons, convicted felons (but still can get bequeaths), "a person whom the court finds unsuitable"
Can a nonresident serve as administrator of a Texas estate or as guardian of a proposed ward's estate?
Yes. but he has to appoint resident agent for service of process.
Does the priority of who can be an adminsitrator apply to the temporary administrator?
No. The probate court can appoint "any suitable person"
Why might the court appoint someone other than one in the priority list of personal reps?
will contest. The families are suing one another.
How can the personal representative be liable for the destruction of estate's property?
General Rule and test is to look at the Prudent Person Standard. Would a prudent person who owned the property insure the property? if yes, and Personal Rep. didn't, then liable. The independent executor has a duty to insure. It does not matter that what the guy who died did during his lifetime.
Compensation of executors and administrators--
"the 5% in, 5% out" Rule
Absent contrary provision, a personal representative is entitled to a commission of 5% of ALL SUMS ACTUALLY RECEIVED and 5% of ALL SUMS PAID OUT IN CASH. (Sale of assets for payment of debts; payment of taxes). The rule DOES NOT APPLY TO CASH ON HAND or collection of life insurance proceeds. thus an executor doesn't get a 5% fee for cashing in a bank account in the decedent's name. Also, the "5% in, 5% out" commission does not apply to distributions to the beneficiaries or heirs.
What procedures apply to presentment of creditor' claims against an estate in:
1) Dependent Administration
2) in an Independent Administration
Same- Notice Requirements
1) Notice by Publication
2) PERMISSIVE personal notice to unsecured creditors
3) Personal Notice to secured creditors
Notice

Notice by Publication
within 1 month after being appointed, personal representative (executor or admin) MUST publish notice in newspaper of general circulation, requiring all persons having claims against the estate to present them "within the time prescribed by law"
Notice

PERMISSIVE personal Notice to unsecured c/ors
Personal representative MAY give personal notice by REGISTERED MAIL or CERTIFIED MAIL to general (i.e. unsecured) creditors having receipt of notice; otherwise the claim will be barred.
Notice

Personal Notice to Secured Creditors
Within 2 months after being appointed, the personal representative MUST give personal notice registered or certified mail to secured creditors with valid liens.
Dependent Administration
A general creditor must file an AUTHENTICATED CLAIM IN SUPPORT BY AN AFFIDAVIT with probate court or administrator. Administrator must then write a memorandum allowing or rejecting the claim WITHIN 30 days.
Dependent Administration

What is the Administrator doesn't take action on the claim within 30 days?
There is a conclusive presumption of rejection of the claim.
If the claim is allowed and approved by the court, it is paid. If the claim is disallowed, the creditor must file suit on the claim within 90 days after it is rejected.
What if the creditor, after receiving rejection of claim, fails to file a suit on the claim within 90 days after it is reject?
The claim is barred. In a dependent administration, a creditor CANNOT bring an action on a "claim for money" unless claim is first presented to the administrator and rejected by the court. However, this rule DOES NOT APPLY to UNLIQUIDATED OR CONTINGENT CLAIMS. Thus a tort action can be filed without first presenting claim to administrator. This is not a "claim for money"
What is the effect of the steps above in an independent administration?
In an independent administration, executor MUST give notice by publication and personal notice to secured creditor, and MAY give permissive personal notice to general creditors, but the above RULES GOVERNING PRESENTMENT OF CLAIMS DO NOT APPLY. Failure to formally present a claim does not affect creditor's right to bring action on the claim.
Can you sue an estate in a tort case?
No. An estate is not an entity that can be sued. Action must be brought against the personal representative.
Secured Creditors- getting paid by the estate
If decedent was personally liable on a note secured by a mortgage, the creditor can present its claim for payment out of the general assets of the estate even if the note is not yet due (e.g. there are still 12 years to go on a 20-year note). The point- this is the last opportunity for the mortgage to realize on the decedent's personal liability.
Secured Creditors- In order to be paid out of the general assets of the estate...
1) within 6 months from date of personal representative's appointment or
2) 4 months after reciept of personal notice, which ever is later,
secured creditor MUST FILE CLAIM AS: "Mature Secured Claim"
Secured Creditors- If the Secured C/or fails to file its claim as a matured secured claim within the prescribed period, it is classified as:
"Preferred Debt and Lien" - you only look to the security interest NOT the general assets of the estate

this has the result of- the secured creditor can f/c on that security interest collateral but cannot sue for a deficiency judgment.

But a preferred debt and lien has priority over all claims including Class 1 funeral expenses, family allowance and Class 2 administrative expenses- this is important if the estate is insolvent.
Creditors' Claims in a guardianship Administration: to what extent do the procedures applicable to creditors' claims in a dependent administration apply also in guardianship of an incapacitated person?
1) Notice? Yes
2) Permissive Personal notice? NO. There is mandatory personal notice to known C/ors and there is a requirement of presentment of claims w/in 4 months or barred.
3) Authenticated claim supported by affidavit? YES. the guardian must write memorandum allowing or rejecting w/in 30 days. if not action, then treated as a rejection. if c/ors doesnt file w/in 90 days after rejection, then claim barred.
4) Personal Notice to S.C/ors? YES. same options (matured secured claim v. preferred debt and lien).
Claims against the estate are paid in the following order of priority:
(Secured C/ors w/ "preferred debt and lien-takes 100% of F/C proceeds)
1) Class 1- Funeral Expenses and expenses of last illness, up to $15K
---Family Allowance-------
2) Class 2- Expenses of Administration
---IRS claim for unpaid federal income taxes takes priority over all claims (except fun. and last sickness exp. and exp. of admin)
3) Class 3- Secured Claims, to extent covered by the lien ("Matured secured claim")
4) Class 4- Child support arrearages reduced to judgment
5) Class 5- State Death Taxes
6) Class 6- Claims for repayment of medicaid assistance paid by state
7) Class 7- Cost of confinement if decedent imprisoned in Texas prison
8) Class 8- All other Claims, including funeral, last sickness expenses in excess of $15K
What is the estate is partially insolvent?
1) residence may qualify for h/s exemption.
2) Furnishings, automobile, cattle, etc. (up to $60K) qualify for exempt personal property set-aside. Special limit as to jewelry: cannot exceed $15K. (25% of $60K)
If the estate is solvent
the exempt property set-aside is only temporary, during the period estate administration, after which the personal property passes under the decedent's will or by intestacy.
If the estate is insolvent
But if the estate is insolvent, the set-aside is permanent and the spouse gets to keep the property.
Emergency Intervention to Pay Funeral expenses and to protect personal property in rental unit
No sooner than 3 days and no later than 90 days after decedent's death, any person can file application for emergency intervention (e.g. to withdraw funds from decedent's bank account) to pay funeral expenses, or for protection and storage of personal property located in a rental unit--as long as no application for appointment of a personal representative or small estate administration is pending.
If a bank is a "preferred debt or lien" holder, can they f/c w/out the court's approval on the security interest?
NO. After mortgagor's death, secured creditor must follow statutory procedures for collecting its debt; cannot foreclose on mortgage without court approval (unless it is an independent administration- then you never need court approval).
What are the procedural step for the sale of real property in a court-supervised administration?
1) File application for sale describing property, amount of claim, property on hand and available, other facts needed to show sale for authorized purpose.
2) Date for hearing set, and notice given to all persons interest in the estate
3) Hearing held, at which court orders sale, specifying terms of sale
4) Property is sold, sale reported to court w/in 30 days
5) After notice to interested parties, confirmation hearing is held and court affirms sale
6) personal representative gives deed to purchaser.
Urban H/S
consists of lot or contiguous lots not to exceed 10 acres w/out regard to value of improvements. Must be used as a residence and/or business.
Rural H/S
200 acres (need not be contiguous), without regard to value of improvements.
Single person H/S
10 acres if urban
100 acres if rural
consequences of qualifying as a H/S in texas
1) Both spouses must join conveyance or mortgage of h/s property (even of homestead is one spouse's separate property)
2) Free from Creditors (there are exceptions!!!!!)
3) on owner's death passes free of creditor's claims (other than exceptions) IF owner survived by spouse, minor child, or unmarried adult child who lived with the decedent. Exemption attaches even though h/s passes to someone other than indicated relative.
4) Probate h/s- right to occupy the h/s (even is the h/s was decedent's separate property) rent-free for life, or for so long ass she chooses to occupy it as a h/s, in favor of surviving spouse or minor children but not in favor of unmarried adult child.
The exceptions that the h/s is free from creditors' claims
1) Purchase Money Mortgage Lien
2) Taxes-Property taxes on the h/s itself
3) Federal tax lien
4) Mechanic's and Materialmen's Lien for improvement on the h/s where written contract, sign by H &W, entered into b4 improvement are made, and recorded
5) Loan to enable parties to divide h/s on divorce (partition)
6) Equity Loan for up to 80% of the value of the equity (Difference btw the FMV of the property and the balance on purchase money mortgage)
"Homestead allowance" and "allowance in lieu of exempt property" are available to surviving spouse, minor children.
1) $15K allowance in lieu of h/s if decedent did not owna h/s. (in effect, available for apartment dwellers only, but you cant choose either or).
2) $5K allowance in lieu of exempt personal property- available to the extent that items on "exempt personal property" list are not in the estate at death. ($5K total, not per missing item)
Family allowance
Purpose is to provide support for surviving spouse, minor children during period decedent's assets are in administration. Permissible allowance: AMOUNT NEEDED FOR SUPPORT FOR A PERIOD OF ONE YEAR.
The allowance in lieu of h/s, exempt personal property allowance nad family allowance all come "off the top" of the estate. they are over and above the amount given by the will or the surviving spouse's (or minor child's) intestate share.
In determining whether surviving spouse should be awarded the family allowance, is size of community estate taken into account?
No. All CP is subject to expenses to the estate.
In determining whether a surviving spouse should be awarded a family allowance, is size of the separate property owned by the spouse taken into account?
Yes. May affect or Eliminate, but cannot be subject to the expenses of the estate
Guardianship and administration

Guardian of the person
has the right to take charge of the ward; duty to provide care, supervision, and protection for the ward; duty to provide clothing, food, medical care and shelter; and power to consent to medical and psychiatric treatment. (much like a managing conservator who is awarded custody of a minor child under the family code)
Guardian of the estate
has right and duty to manage ward's property, enforce the ward's obligations, and bring or defend suits by or against the ward.
Child and property: who can touch it?
Only the guardian of the estate can deal with Child's property. A parent MUST BE appointed guardian of the estate.
If the amount inherited by the child is less than 100K, the managing conservator parent can obtain a court order authorizing a sale without the appointment of a guardian. The sale proceed go to:
1) the court registry
2) to w.draw- you need a court hearing
What if one of the parents become incapacitated as well?
Surviving parent may, by will or written declaration, appoint guardian of the parent's minor children or incapacitated adult child in the event of the parent's subsequent incapacity or after the parent's death. the named person MUST be appointed guardian UNLESS court finds that she is disqualified, dead, or would not serve child's best interest. For written declaration, EXECUTION REQUIREMENT ARE THE SAME AS FOR WILLS: (1) can be holographic, with signature or proxy signature, and (2) must be witnessed by 2 witnesses age 14 or older.
Bonds given by the Guardian
must always be put up by the guardian appointed.
What happens if neither parent's will name a guardian, at the child's age of 12?
12 or older, the child can choose the guardian w/ a writing filing in court (unless court vetoes as not in child's best interest)
Venue for appointment of guadian for minor?
1) County where parents (or parent who is managing conservator) reside.
Venue for appointment For guardian for incapacitated adult:
1) County where proposed ward resides or county where principle estate is located.
Venue for appointment of guardian name in parent's will:
county where will probated or county where appointee resides
Can a non-economic interest person contest a will (having standing to)?
No. But any person has standing to bring a guardianship proceeding the reason for this is because we want this brought to the court's attention. The one bringing the guardianship action may be reimbursed att'y fees if it is showing that she acted in good faith.
who is eligible to be appointed guardian of the person and estate of a minor?
Parents or surviving parent. as noted before, last surviving parent can name guardian of the child. It is presumed that person designated by parent is in child's best interest, but presumption is not conclusive. If not designated by parent, then appointed by
1) grandparent
2) next in kin in nearest degree of kinship
who is eligible to be appointed guardian of the person and estate of an anticipated adult?
1) person named by last surviving parent or other written declaration
2) person named in written, witnessed "Designation of Guardian Before Need Arises"
3) if no such declaration then: (i) spouse; (ii) next of kin in nearest degree of kinship.
"Designation of Guardian Before Need Arises"
Designation is prima facie evidence that person name will serve the proposed ward's best interest, but court may decline to appoint the person if (e.g.) she is asserting a claim against the proposed ward's estate or otherwise not suitable.
General Test as to who can be appointed guardian:
Best interests of the ward.
Can two persons be appointed as co-guardians?
No. Exceptions: (i) they are husband and wife; (ii) they are joint managing conservators of the child; (iii) they were appointed joint guardians in another state, or (iv) they are parents of an adult incapacitated child even though not married to each other
Who is disqualified from being appoint guardian?
1) Incapacitated Person
2) conflict of interest (owes money to proposed ward or asserting a claim against proposed ward UNLESS (i) court determines there is no conflict, or (ii) guardian ad litem is appointed to represent proposed ward
3) Inexperience, lack of education, or other reason makes her incapable of prudently managing proposed ward's estate.
4) Person expressly disqualified in designation of guardian before need arises
5) Person convicted of sexual offense, sexual assault, injury to child or elderly person, etc. (not disqualified PER SE, but is presumed to be disqualified and not in the ward's best interest).
Limited Guardianship
Because an adult for whom guardian is appointed loses all legal and civil rights and powers that are granted to his guardian, the Probate Code urges the court to order limited guardianships whenever possible--where person lacks capacity to do some, but not all, of the tasks necessary to care for himself and manage his property. The order appointing a guardian must specify (i) the powers, duties, and limitations of the guardian, and (ii) the amount of the ward's funds that can be expended for the ward's care without court approval.
If the ward regains some cognitive skills, the ward or an interested person can petition to have the guardianship modified or terminated
In a guardianship proceeding, what safeguards are imposed to insure that the proposed ward's rights are fully protected?
1) there is an appointment of an attorney ad litem for the ward (unless they already have an attorney)
2) the Court MUST appoint a court investigator.
3) the proposed ward must be present at trial (unless the court says that it is unnecessary)
4) the proposed ward can ask for a jury trial and if asked, the court MUST provide.
What is the evidentiary standard as to whether the proposed ward is incapacitated and a guardian should be appointed?
Clear and Convincing Evidence.

All other findings are preponderance of the evidence: that court has venue, person to be appointed guardian is eligible, ward either totally lacks capacity to care for himself and manage his property, or lacks capacity to do some but not all of the tasks necessary to care for himself or his property, for a minor, guardianship not created establishes eligibility to enroll at another school.
If a guardian is appointed, what are letters of guardianship?
They serve the same purpose as letters testamentary in an estate administration proceeding

They are valid for 16 months only. This reflect the policy that there should be annual review of whether guardianship should be modified or terminated
What actions must the guardian taken within 60 days after appointment?
1) must qualify by taking oath and posting fiduciary bond within 20 days
2) must publish notice of administration in newspaper of general circulation within 1 month
3) must file inventory of the estate within 30 Days (unless time period is extended by the court)
4) must file application for monthly allowance to be expended on the ward's behalf within 30 days (unless time period is extended by the court)
What is the test for determining the spending on behalf of the ward?
if 1) there is clear and convincing evidence that the expenditures were reasonable and proper
2) and not possible or convenient to get prior court approval.
The court may remove a guardian (EX PARTE) if the guardian:
1) fails to qualify by giving oath & bond within 20 days, or fails to file an inventory within 30 days, or
2) Moves from TX, is absent from the state for more than 3 months, cannot be served with notices or other processes b/c whereabouts are unknown or is evading service, or
3) has neglected or cruelly treated the ward, or has failed to maintain or educate the ward, or has misapplied or embezzled assets, or has removed assets from TX

If any of these are shown by- Clear and Convincing evidence.
A court may remove a guardian but only after notice and hearing-
1) if there are grounds to believe (but not clear and convincing evidence) that she has neglected or cruelly treated the ward, has failed to educate or maintain the ward, or has misapplied or embezzled assets, or has removed assets from the estate, or
2) if she is guilty of gross misconduct or mismanagement, or
3) if she fails to comply with a court order, or fails to file accountings (or as guardian the person fails to file her report), both of which are required annually by the guardian of the PERSON
4) or is she becomes incapacitated, is sentenced to the penitentiary, or for some other reason is incapable of properly performing the duties of guardian.
how should the guardian manage the estate and the person?
the guardian of an estate has a duty to invest all funds and assets that are not immediately needed for the ward's education, support, or maintenance. The guardian must manage and invest the estate as a prudent person would in managing his own affairs, considering such factors as:
1) anticipated costs of supporting the ward
2) ward's age, education and current income, and
3) size and nature of the estate.
Certain statutorily ("legal list") investments are deemed to meet this standard:
1) bonds of the US Government
2) State of Texas
3) Political subdivisions thereof
4) interest-bearing accounts insured by the FDIC
Investment Plan
A guardian who wishes to invest in assets NOT in the legal list must provide and file an investment list with the court within 180 days after his or her appointment.
List 4 things that a guardian can do without court order or prior court approval?
1) Can retain property received at inception of the guardianship or thereafter by gift, inheritance, with no duty to diversify, and with no liability for any resulting depreciation of loss for a period of 1 year
2) can make investments in assets on the statutorily approved list or investments consistent with an investment plan approved by the court
3) When obtaining prior court approval is not convenient or possible, may expend amounts in excess of monthly allowance fixed by the court, if there is clear and convincing evidence that such expenditures were reasonable and proper.
4) Can insure property, pay taxes, court costs, bond premiums, release lien on payment of debt, vote stocks, including by proxy, pay calls and assessments on investments
In general, what actions by a guardian require court approval?
Anything not in the last list.
sale of real or personal property of the estate (which always requires court approval except for sale of securities pursuant to court-approved investment plan) can be made ONLY for the purpose of:
1) paying claims and expenses
2) maintenance of the ward
3) unproductive property not generating income.

Home equity loan on ward's H/s can be made (with court approval) for
1)making improvements or repairs on h/s
2) providing for educational, medical expenses.
Compensation of guardian for person
cannot exceed 5% of ward's gross income. ("Gross income" does not include social security or veteran benefits)
Compensation of Guardian of estate
entitled to "reasonable compensation" but a fee of
1) 5% of the ward's gross income plus
2) 5% of all money paid out of the estate is considered reasonable.

"Money paid out of the estate"- does not include distributions on settlement of the estate or court-approved tax motivated gifts.
What are the options of the Guardian if the managing becomes TOO expensive?
The guardian can terminate thhis guardianship if burdensome in relation to income. The court can terminate on that request.
One could get pay from the court registry of 100K or less.
A ward inheriting a massive inheritance and estate
Guardian of estate could petition for court-created managment trust for incapacitated adult who inherited substanital estate, with trust to continue until
1) court determines that trust is no longer needed, or
2) ward is restores to capacity or dies.

If no guardian of estate, application for court created trust could be made by attorney ad litem, guardian ad litem, or other person interested in the incapacitated person's welfare.
Can an exculpatory clause, relieving the trustee from liability for ordinary negligence, be included in ta court-created trust?
No. Unless court finds that b/c of unique circumstances, there is clear and convincing evidence that such a provision is in beneficiary's best interest
Guardian to receive funds from Governmental Source?
One can be appointed this. and this means that they can expend the pension payments on ward's behalf without court approval, if the amount of the disability pension is : 12K per year or less.
Temporary Guardian
May be appointed where there is substantial evidence that a person or his estate requires immediate appointment of a guardian. Temp. Guardian's powers are limited to those granted by the court. Temp. Guardianship cannot remain in effect for more than 60 days.
Court Approved Estate Plan
Guardian of the estate can apply for order that compels person in possession of the ward's will, trust, or other estate planning document to deliver a copy to the court for inspection for purposes of establishing an estate plan. An attorney is authorized to deliver a copy of the will or other document to the court, and such delivery does not violate the attorney-client privilege.
Approval of charitable gifts out of the Ward's estate?
The court can approve a charitable gift out of income if
1) the gift will qualify for an income tax charitable deduction
2) net income will probably not exceed $25K, and
3) the gift will probably not exceed 20% of Ward's net income for the year.
When is transfer to the Probate court appropriate?
When the matter are incident to the guardianship estate. That gives rise to Probate Court Jurisdiction.