Texas Probate Litigation

Increase in dementia expected to lead to more will contests

 According to this article from the UK:

Experts believe the number of dementia sufferers will increase sharply in coming decades, mainly because of an ageing population, with one in three over-65s dying with the condition.

Law practitioners are now concerned this could mean more wills will be contested by family members who may argue that the sufferer did not know what they were doing when making changes.

It should surprise nobody that the aging population and increase in the diagnosis of dementia will lead to more will contests, in Texas and elsewhere.  A testator suffering from alzheimers or other forms of dementia doesn't necessarily lack testamentary capacity.  But it certainly provides good ammunition to a contestant.  (photo credit)

North Texas Will Contest Attorneys

The trustee's duty to keep beneficiaries informed

Texas common law has long imposed a “duty of full disclosure” on trustees.  However, until recently, the Trust Code contained no specific provision requiring this general duty.

In 2005, the Texas Legislature added new Section113.06, taken from the Uniform Trust Code, providing that a trustee has a duty to keep beneficiaries reasonably informed concerning the administration of the trust and the material facts necessary for the beneficiaries to protect their interests. This is a mandatory (non-waivable) duty for trustees with respect to beneficiaries 25 years of age and over who are either

(a)        entitled or permitted to receive current distributions or

(b)        “first tier” remaindermen.

In a legislative compromise with Texas Bankers Association, the settlor is permitted to waive this duty with respect to beneficiaries under age 25. However, an income beneficiary or “first tier” remainderman under age 25 still can demand an accounting under Section 113.151, assuming he or she finds out about the existence of the trust. Credit to Dallas trust attorney Bill Elliott for his expertise on this topic.

North Texas and Dallas-Fort Worth trust litigation attorneys

Time limit for challenging a will in Texas?

Will contests in Texas must be filed within two year's of the challenged will's admission to probate.  From Section 93 of the Texas Probate Code:

 Period for Contesting Probate

"After a will has been admitted to probate, any interested person may institute suit in the proper court to contest the validity thereof, within two years after such will shall have been admitted to probate, and not afterward, except that any interested person may institute suit in the proper court to cancel a will for forgery or other fraud within two years after the discovery of such forgery or fraud, and not afterward. Provided, however, that incapacitated persons shall have two years after the removal of their disabilities within which to institute such contest."

Note that the statute does provide a discovery rule exception for forgery or fraud.

Texas Will Contest Law Firm

County Courts at Law do not have jurisdiction to consider trust disputes

Subject matter jurisdiction in Texas contested probate and trust cases is a patchwork, often confusing, system.  The fear of all parties is litigating a case for years, only to find out on appeal that the lower court had no jurisdiction to consider key issues. Subject matter jurisdiction can not be conferred on a particular court by agreement, estoppel, or judicial admissions.  Furthermore, lack of subject matter jurisdiction is an issue a party may raise for the first time on appeal.

These concepts are highlighted in a recent opinion by the Fort Worth Court of Appeals.  In Wood v. Boldt, the court vacated various rulings made by the County Court at Law No.1 of Parker County.  The problem?  Only statutory probate courts and district courts have jurisdiction over trusts, even testamentary trusts:

When reviewing proceedings in the county court at law, the phrases “appertaining to estates” and “incident to an estate” are not defined as including the interpretation and administration of testamentary trusts. See id. Under section 5A(b), however, that task-“the interpretation and administration of testamentary trusts”-is a matter “appertaining to” or “incident to an estate” for probate proceedings in the statutory probate courts and district courts. See Act of May 22, 1997, 75th Leg., R.S., ch. 1302, § 1, 1997 Tex. Gen. Laws 4954, 4954-55 (amended 1999 and 2003) (current version at Tex. Prob.Code Ann. § 5A(b) (Vernon Supp.2008)). Thus, under probate code section 5A, county courts at law do not have jurisdiction over matters involving a testamentary trust, but statutory probate courts and district courts do.

The county court at law should have transferred the disputes regarding the testamentary trusts to a district court in Parker County. 

Plano man prosecuted for financial exploitation of his mother

As I've noted before, all too often district attorneys don't place a priority on prosecuting financial crimes against the elderly.  Credit to Tarant County prosecutors David Lobingier and Sabrina Sabine for obtaining a guilty plea and order of restitution for misappropriation of property by a fiduciary.  According to the Fort Worth Star Telegram story:

A Plano man was ordered Wednesday to repay his 74-year-old mother more than $87,000 as a condition of his probation for improperly spending money she entrusted to him.

John Michael Hook, 54, was sentenced in November to 10 years’ probation after he pleaded guilty to misappropriation of property by a fiduciary, someone who acts on another’s behalf. Because his victim — his mother — was older than 65, the charge became a second-degree felony with a maximum punishment of 20 years in prison.

But Hook disputed the state’s assertion that he improperly spent $87,148 of his mother’s money over four months in 2004. So, a hearing was scheduled for March 20 where Hook’s attorney, Jim Shaw, and prosecutors David Lobingier and Sabrina Sabine argued about how much Hook owed his mother, Phyllis Parish.

The case was prosecuted in Tarrant County because that is where Parish signed over her power of attorney to Hook in 2002 and that’s where her bank was.

During the 50-minute hearing before 396th District Judge George Gallagher, a financial analyst demonstrated how Hook transferred money from his mother’s bank accounts to his own accounts and used the money to pay off credit cards, a motorcycle loan and other expenses.

Unfortunately, abuse of powers of attorney is all too common and is often done by a family member.