My goal is to explain exactly what a Texas Will contest entails, what grounds are available for such a contest, and what issues regularly arise in such proceedings. In the following days, I will lay out what actual grounds are available for a such contests, and hopefully clear up some of the misconceptions out there about what can and cannot be contested when dealing with Texas Wills.

As a primer, there are basically two base groupings that all contests fall into. The first deals with the person writing the Will, and the second deals with the document itself. Therefore, starting Monday, we will look at the following issues surrounding Will Contests:

1. What are the statutory requirements for a valid Will in Texas?

2. What are the statutory requirements for a valid Will execution in Texas?

3. What does “testamentary capacity” mean?

4. What is an “insane delusion” and what constitutes “undue influence” in the drafting of a Will?

So tune in tomorrow as we delve into the statutory requirements for a properly drafted Texas Will.

This case deals with the removal of an independent executor because of an alleged conflict of interest.

In a fairly broad sweeping opinion, the Supreme Court ruled that because a conflict of interest is not listed in the probate code among the several grounds as conditions for removal, it is not a valid reason for removal.

The Court noted that the grounds to remove an independent executor post-appointment are different than those to disqualify an executor pre-appointment. The evidence in the case showed that the dispute was a good-faith disagreement between the executor and the contestant as to how to split the value of improvements made to land co-owned by the Estate and the Independent Executor. The record contained no evidence of dishonesty or misappropriation on the Executor’s part.

The Court concluded that a good-faith disagreement over the Executor’s ownership share in the estate is not enough, standing alone, to require removal under section 149C. The estate was small; there was no actual harm to the Estate since the trial court resolved the percentage-of-ownership issue; the Independent Executor asserted his claim in good faith; and the Testator knew of the Independent Executor’s co-ownership in the property when he named him as such in his will. Therefore, without more, the Court was unwilling to remove the Independent Executor based on a potential conflict of interest.

What does this mean for you? You need to be vigilant in attacking conflicts of interest prior to appointment. If you see potential danger ahead, do not wait until it’s too late. Contact us today and let us help you to ensure that your matter is handled properly from the start.

The speech focused on the common causes of Elder Abuse, the most frequent offenders, and the reason that a majority of these crimes go unreported. Not surprisingly the common theme in most of these cases involves family members seeking money from elderly parents or grandparents. However such crimes are not limited to monetary exploitation and can include physical, psychological, and sexual abuse. Unfortunately a vast majority of these crimes go unreported because of the strong emotional bond between elderly victims and the abusive family member and/or the embarrassment that naturally stems from being a victim of such abuse.

The presentation wrapped up with a rundown of the reporting guidelines which are listed in the Human Resources Code Section 48.051. Such section states that a person having cause to believe that an elderly or disabled person is being abused, neglected, or exploited, shall report the information immediately to the authorities. Such duty applies without exception to a person whose knowledge concerning possible abuse, neglect, or exploitation is obtained during the scope of the person’s employment or whose professional communications are generally confidential, including an attorney, clergy member, medical practitioner, social worker, and mental health professional.

The report may be made orally or in writing and needs to include not only the name, age, and address of the elderly or disabled person but also the name and address of any person responsible for that person’s care; the nature and extent of the person’s condition; the basis of the reporter’s knowledge; and any other relevant information.

Such reports can be made to the police by dialing 911, Adult Protective Services (APS), Department of Aging and Disablity Services (DADS); or the County Attorney’s Office Protective Division, by calling Celilia Longoria at 713-578-2181.

Please help do your part to prevent this rapidly increasing problem. If you suspect that an elderly or disabled person is the victim of abuse, please contact one of the departments listed above or give us a call at 713-260-3926.

In this Will contest from Beaumont, we get one of the rare cases where undue influence was proven in the trial court, and managed to hold up at the Court of Appeals. Pearl Graef probated the 1989 will of her sister, Minnie Ola Kremer. Nearly two years later, Charles Lester Smith, a friend of Minnie’s, filed a motion to set aside the 1989 Will and instead probate a Will allegedly written by Minnie in 2004.

After a trial, the jury found that Minnie lacked testamentary capacity when she executed the 2004 Will and that Smith procured the 2004 Will by exercising undue influence over Minnie. The jury also found that Smith failed to bring his proceeding in good faith and therefore denied him attorney’s fees.

Smith appealed the jury’s findings. In his first issue, he challenged the probate court’s admission of Minnie’s nursing home records. According to Smith, such records were inadmissible because they were not supported by expert testimony. At trial, Smith objected under Rule 403 of the Texas Rules of Evidence that the probative value was outweighed by the prejudicial effect.

The Court of Appeals stated that the trial court has the discretion to admit or exclude evidence. The Court noted that relevant medical records are admissible as records of regularly conducted activity if they have been properly authenticated. However, Smith did not complain of improper authentication. Therefore, the Court concluded that the records were relevant and admissible.

In his second issue, Smith objected to the lack of expert medical testimony to prove that the Decedent lacked testamentary capacity when she signed the 2004 Will. The Court once again shot this down stating that testamentary capacity need not be proved by expert medical testimony and the requisite proof is within the common knowledge of laypersons.

In his third and final issue, Smith contends that there was not sufficient evidence to prove undue influence. Because such cases are rare, this case is valuable to anyone looking to try an undue influence claim as the Court gives a great rundown of the elements needed and what was produced at trial in this matter.

The Court first laid out the factors to consider in such a case including: (1) the nature and type of relationship existing between the testator, the contestants and the party accused of exerting such influence; (2) the opportunities existing for the exertion of the type of influence or deception possessed or employed; (3) the circumstances surrounding the drafting and execution of the testament; (4) the existence of a fraudulent motive; (5) whether there has been an habitual subjection of the testator to the control of another; (6) the state of the testator‟s mind at the time of the execution of the testament; (7) the testator‟s mental or physical incapacity to resist or the susceptibility of the testator‟s mind to the type and extent of the influence exerted; (8) words and acts of the testator; (9) weakness of mind and body of the testator, whether produced by infirmities of age or by disease or otherwise; and (10) whether the testament executed is unnatural in its terms of disposition of property.

In reviewing all of the evidence, the Court concluded that the jury could have concluded that Minnie and Smith were friends who had a creditor-debtor relationship, and in light of the relationship between the parties, the jury could have reasonably concluded that Minnie’s gift was an unnatural disposition of her estate. Additionally, the Court found that the jury could also have reasonably inferred that the circumstances involved in the creation and execution of Minnie’s 2004 Will did not reflect the normal manner under which testators create wills. The jury could have also considered that Smith, not Minnie, paid for the attorney’s services, and that Smith arranged for his friends to serve as witnesses at the will signing ceremony.

Finally, the Court noted that when Minnie executed the 2004 Will, she was ninety years of age. She was in poor health and unable to care for herself. She had only a sixth grade education. The jury could have reasonably concluded that Minnie was susceptible to being unduly influenced during the ceremony in light of her minimal educational background, her poor hearing, and her generally poor state of health around the time she signed the 2004 Will, together with evidence showing that Minnie was not provided with supplemental oxygen during the will ceremony, and that neither before or during the ceremony, did Minnie question why the 2004 Will left the home in which Pearl was living to the Smiths. The jury could reasonably conclude from all of the circumstances that Minnie did not have the strength of mind or body to exercise her own will when she executed the 2004 Will.

In light of the fact that the Court must look at the evidence in the light most favorable to the jury verdict in this matter, the Court stated that there was sufficient evidence to find undue influence.

What does this mean for you? If you feel someone you know has been a victim of undue influence, call us today for a free consultation.

The Fourteenth Court of Appeals this week has ruled in F&M’s favor involving the ability of a probate court to appoint a third party administrator over the application of a beneficiary of the estate.

F&M appealed the denial of their client’s application to be appointed as the Successor Administrator of her father’s estate. After a hearing on the merits in which only one objection to her appointment was raised, the court denied the Applicant’s appointment based on a perceived conflict amongst the parties.

The trial court admitted that the only objection raised by the parties was not sufficient to disqualify the Applicant from serving. However after the opponent’s counsel requested the court to take judicial notice of the entire file, the Court ruled that it was appointing an independent third party as administrator.

The Court of Appeals overruled, noting that the burden of proof rests on those opposing an applicant’s appointment. Because none of the reasons given by the trial court for its decision was asserted by any interested party, the Court of Appeals ruled that the trial judge abused his discretion by denying the Applicant’s appointment and appointing a third party. The case was remanded to the trial court with instructions to grant the application and appoint Courtney Guyton as Administrator.

What does all of this mean for you? If you feel you’ve been wrongly denied an appointment, call us today and schedule an appointment to discuss your matter. Even where a Judge has ruled against you there may still be options available, but the timelines are short so do not delay.

In Harris County, contested races in all 4 probate courts resulted in the election of two new judges and the re-election of two others. In Probate Court One, Judge Loyd Wright was elected to his first term as a probate judge. Judge Wright brings 20+ years of experience as a probate lawyer and substantial real-world experience handling probate and guardianship cases as a practicing lawyer. Over in Harris County Probate Court Four, Judge Christine Butts was also elected to a first term as she replaced retiring Judge William McCulloch who served for 25 years as judge of this Court. Like Judge Wright, Judge Butts brings a substantial amount of probate and guardianship experience to the bench. She has been Board Certified in Estate Planning and Probate since 2003, and her entire career has been spent practicing in this area.

In Dallas County, contested races in Probate Courts 1 and 2 produced new judges in each Court. In Probate Court 1, newly-elected Judge Brenda Hull Thompson brings an extensive background in probate and guardianships, as well as substantial experience in having worked as a mediator in probate cases. With this background, she will doubtlessly bring a conciliatory approach to the bench to help those in her Court work out their issues effective. In Dallas County Probate Court 2, newly-elected Judge Chris Wilmoth succeeds retiring Judge Robert Price. Judge Wilmoth brings a fresh perspective and enthusiasm to the bench and has said that he plans to institute innovative changes to focus his Court on better serving the citizens of Dallas County.

Ford & Mathiason LLP congratulates each of these new probate judges and wishes them the best in their new role as public servants. The opportunities for change brought about by the election of each of these judges provides the citizens of Harris and Dallas counties with fresh perspectives and opportunities for improvements to our judiciary. We all look forward to working with each of these new judges!

Theresa Isenberger and Mary Moriset appealed the dismissal of their petition for construction of the will of Helen Wallace, their sister. This will was offered and admitted to probate in the County Court at Law of Johnson County, Texas. Upon their filing of the Will construction suit, the Independent Executor of the Will, Robert Semple, filed a plea to the jurisdiction claiming that the County Court at Law did not have jurisdiction because the suit related to a trust, over which the District Court has exclusive jurisdiction.

The Court of Appeals noted that section 5(c) of the Texas Probate Code (since repealed) gave the County Court at Law original probate jurisdiction over this matter. The reason being that Section 5(c) gave courts power to hear “all matters incident to an estate.” Isenberger and Moriset held that their action was a Will construction suit, therefore incident to an estate.

However the Independent Executor disagreed, citing the phrase in 5(c) of “unless otherwise provided by law.” He contended that because the property code grants the District Court exclusive jurisdiction to hear all proceedings concerning trusts, that this matter was to be heard in District Court.

The Court of Appeals disagreed however. They held that a power of appointment and a trust are not the same. Since the Will of Helen Wallace was questioned to create either a power of appointment or a trust, the Court found that it was erroneous for the trial court to grant the plea to the jurisdiction with no determination of whether the bequest was a valid power of appointment or something else, including a trust, or whether the bequest failed entirely. They noted that the District Court would have jurisdiction only if and when the County Court at Law determines that a trust was created.

If you have any questions about trusts, do not hesitate to contact us at 713-260-3926.

Attorneys fees in probate and guardianship cases can be incurred in 2 different ways – 1) a client can hire an attorney to represent them in a probate or guardianship case, or 2) the Court can appoint an attorney to work on a probate or guardianship case. In both cases, the attorneys are required to present their fees to the Probate Court for approval.

The Chronicle complains about the “high” fees that are charged in the various cases that are approved by the Probate Courts in Harris County. However, the article does not point out that many of the attorneys whose fees are submitted for approval are hired by ordinary citizens who are doing nothing but trying to handle a difficult situation through the Courts. When that client hires the attorney, the client agrees to the rate that will be charged, and the client agrees that they will pay the rate. Unlike any other area of law, however, the Probate Code requires most of those attorney’s fees to be submitted to the Court for approval before the client can pay the fees out of the estate assets. Regardless, though, it is the client who is asking the Court to approve the fees, and although the Court has to examine the fees to determine that they are legitimate, the Court should in most cases defer to the client who has retained the services of the attorney to monitor whether the fees are reasonable or not.

In cases where the Court has appointed an attorney to participate in a particular proceeding, the Court should, as the Chronicle point outs, review the fees charged and apply standards for approving those fees. In my experience, the Probate Courts in Harris County do an excellent job of monitoring these fees. While there could always be instances where the system has been abused, the reality is that the system works very well in Houston, and there is not a good case to be made that the system is as “corrupt” as the Chronicle wants to suggest that it is.

I find it curious that the Chronicle is so quick to judge the Probate Courts, but they have not offered any sort of solution to the problem that they think they have identified. Keep reading for more posts on this topic.

Court: Texas Supreme Court

The Supreme Court last week sent down a decision that has decided when the duty arises for an estate administrator to timely notify a bank of unauthorized transactions that occurred prior to their appointment.

In March of 2000, Mickey Marcus died with over $22,000 in his account at Jefferson State Bank. The following month, Melvyn Spillman presented the Bank with fraudulent letters of administration purporting to appoint him as administrator of the Marcus Estate. The Bank, relying on what it believed to be valid letters, gave Spillman access to the Marcus account. Throughout the next several months, Spillman withdrew most of the account balance. Spillman was arrested for perpetrating this fraud and several others.

In September of 2003, Christa Lenk was appointed as the Administratrix of Marcus’ Estate. She was aware of the fraud at the time of her appointment. However, following her appointment, she made no effort to contact the bank for over two years. In June of 2005, Lenk sent the bank a demand for payment of $185,785—the amount allegedly withdrawn by Spillman. When the bank refused to pay, Lenk sued to recover the funds.

The bank relied on Texas Business and Commerce Code Section 4.406 which precludes a customer from bringing a claim based on an unauthorized transaction if the customer fails to report the transaction to the bank within one year after the bank provides the customer with the relevant account statement. Both sides filed summary judgment motions. The trial court granted the bank’s motion, however the court of appeals overturned this decision. The Supreme Court then took the matter under advisement and has sided with the bank.

In their decision the Supreme Court has stated that the issue is whether the bank satisfied its initial burden to send or make available the statement to its customer. They held that in the context of a deceased customer that (1) the bank satisfies its burden by retaining account statements for retrieval by the estate administrator, and (2) the response period begins to run once an administrator is appointed.

The Supreme Court did however reject the bank’s argument that it satisfied its burden by sending statements to Spillman. They reasoned that even with reliance on a fraud, Spillman was never the bank’s customer, as required by Section 4.406(a). The bank instead satisfied its burden by retaining the statements, which the Court noted is the only real way a back can satisfy this burden. They held that once an estate administrator is appointed, a bank should not be faulted for failing to further send or make available the statements.

Therefore, the bank has a burden to retain statements, but the administrator’s burden to report unauthorized signatures does not arise until his appointment. Upon that appointment, the administrator has one year (unless otherwise contractually shortened) to notify the bank of any fraudulent or unauthorized transactions. Unfortunately for Lenk, she waited far too long to complain of these transactions, especially considering she knew of them upon the date of her appointment. Not only did she miss the year deadline, it turns out that Marcus and the bank had contractually shortened the deadline to 60 days.
Moral of the story:

If you are appointed as an Estate Administrator, you need to immediately obtain account information for the deceased and if you see any unauthorized transactions, you must report these to the bank at once. Do not rely on the year deadline because as we see here, even that may be severely shortened by agreement. If you have any questions about estate representation, do not hesitate to contact us at 713-260-3926.

Temporary guardianships and their procedural elements are frequently misunderstood, by clients and courts alike. In many cases, they are sought for the wrong reasons, or without adequate information, and they can sometimes do more harm than good. Today, temporary guardianships work very much like permanent guardianships. Their cornerstone differences are (a) a fast-tracked process, and (b) a temporary fix to what might be a permanent issue.

Under prior legislation, a temporary guardianship could be granted without notice to the Proposed Ward. I am consistently astonished by the continuing perception that this kind of procedure is still available in Texas. It is not. Many clients, attorneys and even judges apply the outdated procedure when they seek or grant an ex parte temporary guardianship, or one created before the Proposed Ward is ever even notified.

Today, the Probate Code is clear on the notice provisions of every temporary guardianship. When an application is filed, an attorney is appointed to represent the Proposed Ward. The Clerk issues specific notices and provides a copy of the application to every concerned party, including the appointed attorney. The Court sets a hearing date, generally within 10 days. If these steps are not followed, the Court cannot create a temporary guardianship. If it does, buckle up for the bumpy ride.

Temporary guardianships can be a wonderful tool when used appropriately. In a time when a hearing on a permanent guardianship might take weeks to coordinate, temporary guardianships get the ball rolling much faster. In true emergency situations, they can safeguard the Proposed Ward from imminent harm and even temporarily lock down the Proposed Ward’s estate if it is at risk. Used correctly, temporary guardianships can be true lifesavers. Sought for the wrong reasons, or created under repealed and rewritten laws, temporary guardianships can cause more trouble than they fix.