100 Rules of Will Construction in Texas

Fractional gifts

A testamentary gift to two or more individuals can trigger an unanticipated application of the concept of lapse and anti-lapse, if the will does not indicate an intent to the contrary. For example, if Blackacre is left in a specific gift to the testator's friends, "Tom, Bill and Brit," the gift is considered a fractional gift of an undivided one-third interest to Tom, an undivided one-third interest to Bill, and an undivided one-third interest to Brit.

Residuary Gift

a type of general gift (although a particular will may direct that a specific item be included as part of the residuary, thus being specific as to that asset). It is the disposition of the assets of the estate remaining after the distribution of the specific, general and demonstrative gifts. It is also usually defined to refer to the "net" probate estate after the satisfaction of the claims and other obligations of the estate. The absence of a residuary clause will likely result in some assets of the probate estate passing by intestate succession.

Non-pro rata division--consent of spouse

even if the will purports to enable the executor to make a non-pro rata division of the community property, the surviving spouse's agreement is still required. The impact of the Texas widow's election should be considered in this context as well.

Fractional gifts-- Anti-lapse of a fractional gift

if Bill had been a lineal descendant of one of the testator's parents, then Bill's undivided one-third interest in either a specific, general or residuary gift would pass to his lineal descendants who survived the testator under the anti-lapse statute unless the will provided otherwise.

Demonstrative Gifts

if the testator intends for it to be satisfied initially from a particular source, but if the indicated source is insufficient or unavailable to satisfy the gift, the executor is directed to satisfy it out of the general assets of the estate. In effect, it is a hybrid, taking on the characteristics of both specific and general gifts. These gifts are not very common

Death Taxes--Statutory apportionment--Post 1987

in absence of a provision in the will, federal estate taxes and state inheritance taxes are to be apportioned to the persons receiving the assets that are included in the decedent's taxable estate, both probate and nonprobate assets, based upon the taxable value of each person's interest in the estate as determined for death tax purposes. Tex. Est. Code Ann. §124.005. Currently, there is not an inheritance tax in Texas.

Specific Gifts

is a testamentary gift of a particular item of real or personal property that is distinguishable from all other assets of the testator's probate estate. Generally, it can be satisfied only by delivering the subject of the gift to the intended beneficiary. In other words, the beneficiary has a right to the specific property itself.

Class gifts--No anti-lapse

If the anti-lapse statute is not applicable, the surviving members of the class, if any, receive the gift

Ademption by extinction--Changes in form

If the change subsequent to the date of the will's execution is one merely of form, rather than of substance, some courts have relaxed the "strict identity test" and refused to adeem the gift. For example, a specific bequest of certain common stock should not be adeemed simply because the corporation changed its name. Texas has recognized this exception.

Debtor/beneficiary--Retainer

If the indebtedness is not forgiven by the testator, the share of the testator's estate passing to the debtor/beneficiary may need to be reduced by the amount owed by the beneficiary to the estate, unless the will provides differently, according to the common law concept of "retainer" or "offset."

Ademption by Extinction

If the subject of a specific gift is not part of the testator's probate estate at the time of the testator's death, the testamentary gift is generally a nullity. If a beneficiary under the will is the current owner of the property at the time of the testator's death, the beneficiary may be put to an express or equitable election in the will that requires the owner to transfer the asset to another in exchange for the testamentary gift. For a discussion of equitable election.

Predeceasing the testator--Strict construction

Texas courts have held that the "anti-lapse" statute should be applied only in the particular situations described in the statute. The "anti-lapse" statute does not apply to nonprobate dispositions (e.g., revocable trusts, P.O.D. accounts, life insurance designation).

Predeceasing the testator--Testator's intent

The "anti-lapse" statue applies only if the testator does not indicate a contrary intent in the will. For example, a gift to "my daughter, if she survives me," or "to my surviving children" will negate its application. Tex. Est. Code Ann. §255.151. At least one court of appeals found that, where the will defined the "Residuary Estate" to specifically include "any lapsed gifts," sufficient intent was demonstrated so that any lapsed bequests became part of the residuary estate and were not saved by the anti-lapse statute.

Texas "Widow's" Election--Equitable election

Whenever any devisee is entitled to a benefit under a will and is asked to suffer a detriment under the will, the devisee cannot accept the benefit without suffering the detriment. The choice is left to the devisee who can elect to accept under the will or elect against the will. The most common example of an election is when the testator attempts to dispose of property which the testator does not own while at the same time devising other property to the actual owner.

Equitable election

Whenever any devisee is entitled to a benefit under a will and is asked to suffer a detriment under the will, the devisee cannot accept the benefit without suffering the detriment. The choice is left to the devisee, who can elect to accept under the will or elect against the will. The most common example of an election is when the testator attempts to dispose of property which the testator does not own while at the same time devising other property to the actual owner.

General Gifts

is one that can be satisfied out of the general assets of the estate, but it is not a gift of a specific item of property. In other words, a certain quantity of property is the subject of the gift. The intended beneficiary is not entitled to any specific item in the probate estate as of the time of the testator's death. In effect, at the testator's death, the intended beneficiary has a "claim" against the estate to be satisfied by the executor by distributing cash or selecting what asset to distribute among several choices or perhaps purchasing the subject of the gift for the beneficiary with general estate assets.

Interpretation

will be described as the process of determining the actual intent of a testator from the four corners of the will and any other admissible extrinsic evidence; it is factual in nature

Construction

will be used to describe the legal process of ascertaining the testator's "deemed intent" when the rules of interpretation do not reveal the testator's actual intent; it involves rules of law.

Identifying Devisees

will likely depend to some degree on certain rules of construction which generally apply to all testamentary gifts

Court created trust

Chapter 1301 of the Texas Estates Code offers an alternative to a guardianship, the creation of a court created trust when for an incapacitated person. A 2011 amendment to its predecessor allows the creation of such a trust for persons with only a physical disability. If the incapacitated devisee is eligible for public benefits or assistance and the devisee's inheritance could disqualify the devisee for such benefits, unless the inheritance is placed in a special needs trust or pooled trust account.

Identifying the beneficiaries--Outside of marriage

Children born outside of marriage are now given the more politically correct label of "nonmarital children" as more and more couples (same sex or opposite sex) are cohabiting without marriage and having children; further, individuals without partners are more frequently having children. The methods employed by these parents include sexual intercourse between the partners, sexual intercourse of one partner with a third party, artificial insemination, surrogate mothers, and adoption. At one time, in the eyes of the law, nonmarital children were not entitled to inherit from either biological parent; later they could inherit from their mothers. Now, due process and equal protection allow nonmarital children to inherit through intestate succession from both parents. However, will these children be considered "grandchildren" in the wills of their parents' parents?

Ademption revisited

Consider the impact of this rule when coupled with the concept of ademption where the subject matter of the specific gift is destroyed in the same event that terminated the testator's life; the specific devisee may be entitled only to the subject matter in its damaged condition on the date of death and the residuary beneficiary will receive the insurance proceeds, unless a specific gift is defined in the will to include the insurance.

Fractional gifts--1993 changes

Currently, Texas law provides that unless the "anti-lapse" statute applies: (1) if the residuary estate is devised to two or more persons and the share of one of the residuary devisees fails for any reason, the residuary devisee's share passes to the other residuary devisees, in proportion to the residuary devisee's interest in a residuary estate; and (2) if all of the residuary devisees are dead at the time of the execution of the will, fail to survive the testator, or are treated as if they had predeceased the testator, the residuary estate passes as if the testator had died intestate. Tex. Est. Code Ann. §255.152. The fractional gift rule remains in effect for specific, general and demonstrative gifts. Further, if a gift is made to two or more individuals who are also described as a class, the gift is treated as a fractional gift, not a class gift.

Satisfaction--Not specific gifts

The concept of satisfaction is applicable to general and residuary gifts (an inter vivos disposition of a specific gift works an ademption by extinction).

Specific, General and Residuary Gifts; General Rule

A beneficiary of a will must survive the testator in order to receive the testamentary gift since the testator's date of death is the effective date of the disposition. If the beneficiary predeceases the testator, the beneficiary does not own a property interest that becomes a part of the deceased beneficiary's probate estate.

Disclaimer

A beneficiary under a will may file a qualified disclaimer pursuant to the provisions of Chapter 122 of the Texas Estates Code. If so, the property to which the beneficiary would have been entitled passes as if the disclaiming beneficiary had predeceased the decedent. If a child of the decedent has children and disclaims, the anti-lapse statute, if applicable, may result in the grandchildren taking the disclaimed property.

Resolution

A court, through a declaratory judgment, can resolve any resulting controversy by applying an established, or by creating a new, rule of construction where the testator failed to clearly express his or her intent in the will itself.

Devise to an attorney

A devise in a will is void if the devise is made to an attorney who prepared the will, such attorney's parents, descendants of said parents, employees of the attorney, as well as a spouse of any of said individuals, unless the devise is to the testator's spouse, an ascendant or descendant of the testator, an individual related within the third degree of consanguity or affinity, or a bona fide purchaser.

Death Taxes-Testator's intent

A direction to pay estate taxes out of the residuary is limited to taxes attributable to property passing under the will unless the will manifests the intent to include the taxes attributable to assets passing outside of the will. Tex. Est. Code Ann. §124.005(b).

Duty to close the estate

After the estate has been marshaled and the debts and other obligations have been paid, or otherwise satisfied, the personal representative has the duty to close the estate and deliver the remaining assets of the estate to those who are entitled to them--either the decedent's heirs or devisees.

Death taxes- surviving spouse's death

A real trap for the unwary can occur upon the death of a surviving spouse whose husband or wife had created a QTIP trust for the spouse upon his or her earlier death. A direction in the surviving spouse's will to pay all estate taxes out of the survivor's probate estate, thereby exonerating the QTIP trust from any estate taxes, certainly favors the remainder beneficiaries of the QTIP trust, if they are not the same as the beneficiaries under the will.

Powers of appointment

A residuary clause in Texas is not presumed to include any property over which the decedent possessed a power of appointment. Section 58C was added to the Texas Probate Code in 2003. It provided that a testator may not exercise a power through a residuary clause, or other general disposition of all of the testator's property, unless there is a specific reference in the will to the power or some other indication in writing that the testator intended to include the property subject to the power in the will. Tex. Est. Code Ann. §255.351. Texas courts have, however, recognized the concept of "implied exercise" of powers. An express exercise of a testamentary general power of appointment in a residuary clause is sometimes called a "blending clause," resulting in the property subject to the power becoming part of the residuary estate - - "the doctrine of capture."

Casualty and liability insurance

A specific gift does not include the policies insuring the subject of the gift unless the will provides to the contrary.

Predeceasing the Testator

A testamentary gift for an individual beneficiary who either predeceased the testator, or who is deemed to have predeceased the testator due to §121.101 of the Estates Code, is said to have "lapsed." Further, unless the will or a statute provides differently, the subject property of a lapsed specific, general or demonstrative gift may pass under the residuary clause of the testator's will, if any, or if the lapsed gift is the residuary gift itself (or if there is no residuary clause), the lapsed gift may pass by intestate succession to the testator's heirs at law. See Tex. Est. Code Ann. §§255.151-255.154.

Anti-Lapse Statute

A testamentary gift will not lapse, however, if the deceased devisee: (1) was a lineal descendent of a parent of the testator; and (2) died before (or who is deemed to have died before) the testator leaving lineal descendants of the devisee surviving the testator (by at least 120 hours). In that event, the subject matter of the gift passes to the lineal descendants of the deceased beneficiary, as substitute takers under the testator's will, unless the will provides differently. Tex. Est. Code Ann. §255.153. The identity of the lineal descendants who succeed to the deceased devisee's interest in the estate is to be determined using the concept of representation.

Interpretation versus construction

A will which did not anticipate these possible changes in property and beneficiaries between the date of execution and the testator's date of death will need either interpretation or construction.

Nature of a will

A will, being a revocable disposition effective upon the testator's date of death, creates numerous opportunities for ambiguity and uncertainty because many years may have passed during the time after the will was executed and before the testator died. During the intervening period of time, the size, nature, extent, and value of the testator's estate could have changed considerably; intended beneficiaries of the estate might have died; still others may have been born or adopted. Changes in the law between the date the will was executed and the testator's date of death can affect the disposition of the estate.

Abatement

All assets of the decedent's probate estate (except the homestead and other exempt personal property) are generally liable for the decedent's debts. The particular assets which should be used to actually pay the debts depends initially on the testator's intent as expressed in the will. Consideration should also be given to the proper disposition of the estate and the relative rights of the distributees as discussed in this chapter.

Distribution of community assets

Absent an election situation, when administration is completed, the surviving spouse and the distributees are entitled to their respective one-half interests in each and every community probate asset not expended to satisfy the estate's debts and obligations. Consequentially, a broad power granted in a will authorizing an executor to sell assets of the estate should not necessarily be interpreted as legitimate authority to sell the surviving spouse's one-half interest in community assets unless the sale is necessary to pay debts. See §§3:74 - 3:79 of this Guide, supra.

Interest on pecuniary bequests

At common law, the beneficiary of a pecuniary bequest was entitled to interest on the bequest after one year had elapsed from the date of death. Texas courts modified this rule to provide for interest once the bequest became "due and payable" (i.e., after the payment of the decedent's debts and the other obligations of the estate). However, in 1993, the legislature mandated that interest begins to accrue one year after the grant of letters. In 2003, effective Jan. 1, 2004, that provision was repealed and replaced by Tex. Trust Code Ann. §116.051(3). The new statute provides that, unless the will provides otherwise, the beneficiary of a pecuniary bequest is to be paid interest on the pecuniary amount at the legal rate as provided by §302.002 of the Texas Finance Code beginning on the first anniversary of the decedent's date of death. See §310.004 of the Texas Estates Code.

Specific Rules for Specific Gifts--Generally

Because a specific gift is usually one of a particular item of property owned by the testator on the date the will is executed, the subject of the gift may not be owned by the testator at the time of death, or it may have been pledged as the collateral for an indebtedness of the testator, or it may have gone through a significant change in value. In other words, a change in the property itself may have a significant effect on the testator's will when it becomes effective.

Death Taxes--Marital and charitable devisees

Bequests which qualify for either the federal estate tax marital deduction or a charitable deduction do not have to bear any of the estate taxes unless the will provides to the contrary. Tex. Est. Code Ann. §124.007.

Specific Rules for General Gifts--Generally

Changes in the nature, extent, and the value of the testator's estate between the date of the will's execution and the date of the testator's death can also affect the testator's general and residuary gifts. Because residuary gifts are a type of general gift, the rules affecting one, like satisfaction, usually apply to the other.

When the Testator was Married--Generally

Every person who is or has been married has received a broad grant of authority from the legislature to dispose of his or her probate property. There is no forced heirship in Texas. Tex. Est. Code Ann. §§251.001-251.002. This broad grant of testamentary authority is, however, effectively limited to the testator's separate probate property and one-half interest in the community probate property.

Ademption by Extinction-- Texas decisions

Texas courts adopt the "strict identity test" by failing to recognize the concept of traceable mutations so that the proceeds received upon the property's sale pass under the residuary clause and not to the specific devisee.

Pecuniary bequests-- Marital deduction gifts

Further, if the gift is one intended to qualify for the federal estate tax marital deduction and the executor has been instructed by the testator to fund at federal estate tax values rather than date of distribution values, the amount distributed by the executor to the beneficiary must be "fairly representative" of the appreciation and depreciation in the available asset pool, unless the will provides to the contrary. Tex. Est. Code Ann. §124.052.

Estate Income

Further, residuary beneficiaries are entitled to all of the income of the estate not otherwise properly distributable to specific and general beneficiaries. Tex. Est. Code Ann. §310.004.

Texas widow's election requisite intent--factors

Generally, two factors are involved. First, the survivor must have been aware of the choice. Second, the survivor must intend to so elect; however, the totality of the circumstances are considered in making this determination.

Debtor/beneficiary

If a beneficiary of the estate is indebted to the testator at the time of the testator's death, the testator in the will may forgive the indebtedness as a form of testamentary gift.

Pretermitted children

If a child of the testator is born or adopted after the execution of the will, the child may succeed to a portion of the estate if no provision is made for the child in the will. The portion, if any, depends on the conditions described in the pretermitted child statute, formerly §67 of the Probate Code. Section 67 was amended in 1993 to broaden the scope of its language "provided for" and "provision is made" to include testamentary gifts in trust and nonprobate dispositions outside the testator's will which were intended to take effect at the testator's death. In effect, if any provision is made for the after-born or after-adopted child, whether in the will or by a nontestamentary disposition, then the child is not entitled to a share in the estate. A 2003 amendment made it clear that even a contingent provision for the child is sufficient to exclude the omitted child. A 2011 amendment provides that the portion of the testator's estate to which the pretermitted child is entitled cannot reduce the portion of the testator's estate passing to the testator's spouse by more than one-half, if the pretermitted child's other parent is not the testator's surviving spouse. Tex. Est. Code Ann.§§255.051-255.056. It should be noted that the relevant statutory provisions do not expressly require the child to have been conceived prior to the testator's death.

Interpreting/Construing Testamentary Gifts

If a decedent dies testate, the will has to be admitted to probate in order for it to be effective and control the disposition of the probate estate. Tex. Est. Code Ann. §256.001. Assuming the will has already been admitted to probate, the executor, or the administrator with will annexed, has the duty to distribute the assets remaining after debts, expenses and taxes in accordance with the decedent's intent as expressed in the will.

Abatement--Post 1987

In 1987, the Texas Legislature adopted a statutory abatement process. Section 355.109 of the Texas Estates Code now directs that testamentary gifts will abate in the following order to pay debts and administration expenses: (1) property not disposed of by will, but passing by intestacy; (2) personal property of the residuary estate; (3) real property of the residuary estate; (4) general bequests of personal property; (5) general devises of real property; (6) specific bequests of personal property; and (7) specific devises of real property.

Satisfaction--Statutory rules

In 2003, the legislature added §37C to the Texas Probate Code. Under this statute, inter vivos gifts and nonprobate dispositions do not affect testamentary dispositions unless: (1) such intent is expressed in writing or (2) the will provides for a deduction of the testamentary disposition. Tex. Est. Code Ann. §§255.101, 255.102.

Lapsed Gifts

In Texas, a residuary estate is presumed to include any lapsed specific or general gift.

Specific Rules for Residuary Gifts--Generally

In a typical residuary clause, such as "I devise the rest, residue, and remainder of my estate," the clause disposes of that portion of the testator's probate estate which was not specifically or generally given away, including not only those assets not expressly mentioned in the will, but also: (1) property not even known to the testator; (2) property acquired after the execution of the will; (3) future interests owned by the testator; (4) proceeds of adeemed property; and (5) bequests forfeited due to an in terrorem clause

Texas widow's election-- requisite intent --implied election

In other situations, the election is implied from the language of the will, where the court found the wife's will did not put the husband to an election

Texas widow's election--requisite intent--express election

In other words, the language of the will may specifically and expressly set forth the intent to require an election

Construction Preference--Residuary

In other words, there is a strong constructional preference against any property of the estate passing by intestate succession, if there is a residuary clause.

Class Gifts

In situations where a testamentary gift is left to a class of beneficiaries (rather than a fractional gift to a group of individuals) and one of the members of the class who is a lineal descendant of a parent of the testator predeceases the testator, Texas courts have applied the anti-lapse statute.

Predeath and postdeath income

It is also generally held that the devisee of a specific gift is not entitled to any of the predeath income the subject of the specific gift generates, unless the will provides to the contrary. Texas codified this principle in 1993 as it applies to corporate securities. Tex. Est. Code Ann. §255.253. Postdate of death income is, however, payable to the specific devisee. This principle was also codified in 1993. Tex. Est. Code Ann. §310.004.

Texas "Widow's" Election--Community Property Election

It is common for one spouse to attempt to leave a community asset to a third party while leaving the surviving spouse another asset. Such a disposition would put the surviving spouse to an election. The surviving spouse is also put to an election when the decedent gives the surviving spouse a life estate in the entire community estate while expecting the survivor to allow the surviving spouse's one-half of the community to pass under the decedent's will.

Texas "Widow's" Election

It is fundamental that the deceased spouse has testamentary power over only one-half of the community probate assets, whether the community assets are held in the husband's name, the wife's name, or both of their names. An attempt to dispose of both halves of the community is ineffective unless the attempt triggers what in Texas has been termed the "widow's election" (a term frequently used whether the survivor is a widow or widower).

Predeceasing the Testator-effect

It is important to note that the gift subject to the anti-lapse rule does not become a part of the deceased beneficiary's estate; it is not subject to the claims of the deceased beneficiary's creditors and does not pass to the deceased beneficiary's heirs and/or devisees in those capacities.

Death Taxes

Prior to 1987, Texas courts generally treated death taxes as if they were general debts of the estate to be paid out of the estate as ordinary debts pursuant to the rules of common law abatement as discussed above, unless the will or a particular provision of the Internal Revenue Code directed that taxes be apportioned to a certain recipient. 26 U.S.C.A. §2206 (life insurance); 26 U.S.C.A. §2207 (general powers); 26 U.S.C.A. §2207A (QTIP property).

Ademption by extinction--Example

Texas courts have even suggested that ademption can occur if the subject matter of the gift is subject to a specifically enforceable contract to sale at the time of the testator's death, thereby causing the proceeds of the sale during administration to pass to the residuary beneficiary, rather than the intended specific devisee.

Disclaimer--Disclaimers and creditors

Texas courts have held that a disclaimant's creditors could not attach the disclaimed property. Section 37A was amended in 1993 to provide that a disclaimer should relate back for all purposes to the death of the decedent, thereby exempting the property from the claims of any creditor of the disclaimant. The Fifth Circuit has ruled such a disclaimer is not a fraudulent transfer, but have also held that a federal tax lien did attach to the disclaimed property.

Identifying the beneficiaries--Adoption

Section 162.017 of the Texas Family Code provides that the "terms 'child,' 'descendent,' 'issue' and other terms indicating the relationship of parent and child include an adopted child unless the context or express language clearly indicates otherwise." One court of appeals case has stated that this adoption statute "is no more than an aid to be employed in the construction of the will and is not controlling." The term "any other great-grandchildren who may be born after my death" has been found not to include adopted children. However, in one case the court applied the law in effect at the time the will was executed and held that adopted great-grandchildren were eligible beneficiaries even though adopted grandchildren were not. The testator's will included a provision that stated that "grandchildren" had to be born of a child's "body." An adopted adult has been found to be included under bequest to "descendants" where the will specifically defined descendants to include adopted children and issue.

cy pres and the rule against perpetuities

Section 5.043 of the Texas Property Code was amended in 1991 to clarify that a noncharitable gift or trust which violates the rule against perpetuities can be reformed so that it does not violate the rule.

Pour over planning

Section 58A of the Texas Probate Code was amended to permit the "pour over" of probate assets to a trustee of an inter vivos trust "if the trust is identified in the testator's will and its terms are in a written instrument, other than a will, that is executed before, with, or after the execution of the testator's will or in another person's will if that other person had predeceased the testator, regardless of the existence, size, or character of the corpus of the trust." Tex. Est. Code Ann. §254.001.

Corporate reorganizations and mergers

Section 70A of the Texas Probate Code became effective on September 1, 1993, and provided that, unless the will clearly provides differently, a specific devise of securities includes: securities acquired as a result of a merger, consolidation, reorganization, or other distribution by the organization or any successor, related, or acquiring organization. Tex. Est. Code Ann. §255.252.

Predeath stock splits, stock dividends

Securities of the same corporation acquired after the execution of the will and before the testator's death, because of stock splits, stock dividends, and new issues of stock acquired in a reorganization, redemption, or exchange (other than securities acquired through the exercise of purchase options or through a plan of reinvestment), will likely pass to the devisee of the specific gift of corporate stock. Tex. Est. Code Ann. §255.252. This rule has also been applied to a general gift of so many shares of corporate stock.

Satisfaction

Sometimes referred to as "ademption by satisfaction," the common law concept of satisfaction relates to situations where the owner of property makes an inter vivos disposition to the beneficiary that is intended to be either a total or partial satisfaction of the recipient's share of the property owner's estate at death.

Pecuniary bequests--Date of death funding

Sometimes the executor is authorized by the testator to fund a pecuniary gift using date of death, or U.S. Estate Tax, values. Tex. Est. Code Ann. §124.051.

Abatement--Testator's intent

Statutory abatement applies in all situations except where the testator provides to the contrary in the will, and the testator may very well have expressed a different intent depending on the testator's own circumstances.

Proper payment of debts

The Texas Estates Code fails to give direction to the personal representative who has both nonexempt separate and community assets (including the surviving spouse's one-half interest) in its possession and control in order to satisfy the decedent's debts. The potential conflict of interest is obvious; the expenditure of separate funds to satisfy the debt will inure to the benefit of the surviving spouse while using community funds would accrue to the benefit of the decedent's estate. Accordingly, the representative should use funds from the proper source to satisfy debts. For example, separate funds, or the decedent's one-half of the community, should be used to pay funeral expenses.

Negative will

The Texas Estates Code now permits a testator to disinherit an heir through a testamentary document in order for the testator to eliminate the possibility of a particular person receiving anything. Tex. Est. Code Ann. §251.002.

Tangible and titled personal property

The Texas Estates Code provides that, unless the will provides to the contrary, a specific gift of personal property does not include any of the subject property's contents, and a specific devise of real property does not include any personal property located on or associated with the subject matter. The term "contents" has also been defined. Tex. Est. Code Ann. §§255.001-255.003.

Testator's divorce

The Texas Probate Code had long provided that, if a testator is divorced after making a will, all provisions in the will in favor of the testator's spouse, or appointing such spouse to any fiduciary position, are to be deemed null and void. Section 69 was amended in 1997 to confirm that where §69 is applicable the will is read as if the ex-spouse had predeceased the testator. Tex. Prob. Code Ann. §69. §69 was amended again in 2007, and if the testator dies on or after Sept. 1, 2007, each relative of the former spouse who is not a relative of the testator is deemed to have failed to survive the testator, thereby voiding any gifts to such relatives. See Tex. Est. Code Ann. §123.001.

Texas Widow's election- Texas rule

The Texas Supreme Court has explained the Texas rule. First, the will must dispose of property owned by the surviving spouse while at the same time granting some benefits to the surviving spouse. Second, the surviving spouse must elect to allow all or part of the surviving spouse's property to pass as provided in the will before accepting the benefits conferred. Third, the will must clearly put the survivor to an election.

Identifying the beneficiaries--Nonmarital children

The Texas statute setting forth the standards of inheritance for nonmarital children for intestate succession purposes was substantially rewritten in 1989 and then restructured in 1997 to provide that a child would be considered the child of the biological father if 1) the child was born under circumstances described by the Texas Family Code, 2) was adjudicated to be the child of the father by court decree as provided in the Texas Family Code, 3) was adopted by the father, or 4) the father executed a statement of paternity as provided in the Texas Family Code (or like statement properly executed in another jurisdiction). For purposes of inheritance, a nonmarital child has always been deemed to be legitimate to the child's mother. Tex. Est. Code Ann. §201.051. Of course, in a will, what is meant by the term "child" or "children" will depend on the intent of the testator. Traditionally, the terms "issue" or "children" or "descendants" have been construed to not include nonmarital children of a father unless the will indicates a contrary intent.

Pecuniary bequests

The beneficiary of a general bequest inherits something more like a claim against the testator's estate than a property interest in the specific property of the estate. For example, if the general gift is "$50,000 in cash," the executor has a duty to distribute to the beneficiary upon termination of the estate $50,000 in cash out of the available cash resources of the estate or raised by the sale of noncash assets in the residuary estate.

Texas widow's election--Tax consequences

The decision to elect or not can have significant transfer and income tax consequences which are beyond the scope of this guide. For a discussion of these matters and an in-depth study of the Texas widow's election.

Non-pro rata division-- Tax issues

The difficult issue is whether any such agreement to a non-pro rata division will be considered a taxable exchange, subjecting the parties to capital gains exposure to the extent the assets have appreciated in value since the decedent's date of death.

Death Taxes--Fiduciary duty

The executor also has a duty to charge each recipient of the taxable estate, both of nonprobate and probate assets, with his or her pro rata share of any estate taxes. Tex. Est. Code Ann. §124.015.

Pecuniary bequests--in kind distribution

The executor may deliver to the beneficiary noncash assets worth $50,000 on the date of distribution, if the will authorizes the executor to "fund in kind" or if the beneficiary agrees to an "in kind" distribution.

Ademption by extinction--Change in value

The increase or decrease in value of the subject matter of a specific gift prior to the testator's date of death does not affect the specific gift in the will.

Debtor/beneficiary--Intestate versus Testate

The net effect of this concept of retainer is to reduce the share distributable to the debtor/beneficiary and to increase the amount available for others. This principle has been recognized in Texas in intestate situations. However, one Texas case holds that a specific devisee who was indebted to the estate was still entitled to the gift.

Texas widow's election--requisite intent--question of law or fact

The question of whether the survivor is put to an election is one of law for the court. The question of whether the survivor has made an election is one of fact.

Abatement--Priorities

The statute abatement gives priority to real property over personal property in residuary clauses (but not in intestacy). Unless the testator specifically grants the executor discretion in selecting the real or personal property to be liquidated to satisfy the debts, the executor may be forced to sell, for example, stock in a closely held business instead of an unimproved tract of real property held for investment.

Abatement--Secured Creditor's Election

The statute does not affect the right of a secured creditor to elect a "preferred debt and lien" or "matured, secured claim." Tex. Est. Code Ann. §355.109(b).

Survivorship of the Testator

The subject of the testamentary gift does not pass to the beneficiary's heirs and/or devisees, unless the testator's will designates them as substituted devisees

Non-pro rata division

The surviving spouse and the personal representative (or the decedent's distributees) can agree to make a non-pro rata division of the community estate so that the surviving spouse receives 100% of some of the assets and the distributees receive 100% of other community assets. The authority of an executor to enter into such a transaction depends on the powers granted to the executor in the decedent's will. An administrator would not have the authority to agree to a non-pro rata division absent an agreement of the distributees and an order of the Probate Court.

Texas widows election--requisite intent

The surviving spouse may be put to either an express or an implied election.

Who is a child?

The traditional family of the past included the husband and wife and their children, who each married and had their own children; rarely did a divorce occur in the traditional American family; rarely did a child occur out of wedlock. A more realistic look at the American family reveals that a marriage is just as likely to end in divorce as in the death of one of the spouses. Today's family may include children who are "his," "hers" or "theirs." Stepchildren raised in the home may or may not be legally or equitably adopted by the step-parent. Siblings may be of the "whole" or "half blood." In 2001, the Texas Legislature enacted the Uniform Parentage Act as Chapter 160 of the Texas Family Code, which will affect the issues raised herein, especially those issues related to modern reproductive technology.

Class Gifts--1991 codification

This concept was codified into the Texas Probate Code in 1991. Tex. Est. Code Ann. §255.154

120 Hour Rule

This fundamental concept was modified when the Texas Probate Code was amended in 1979 to require a devisee to not only survive the testator, in fact, but also to survive the testator by 120 hours, unless the will provides differently. Tex. Est. Code Ann. §121.101.

types of testamentary gifts

Traditionally, the terms "bequest," "legacy" and "devise" have referred to differing types of testamentary gifts and their differences depended in part on the nature of the property that was the subject matter of the gift. Modern terminology frequently uses these terms collectively as testamentary gifts of real and/or personal property. To avoid any confusion, the more generic term "testamentary gift" will be used and will be divided into the four basic types.

Exoneration

Under common law, a beneficiary of a specific gift was generally entitled to receive the subject matter of a specific gift free and clear of any encumbrances. In other words, unless the will provided differently, a specific devisee had the right to have any indebtedness secured by the subject matter of the specific gift paid out of the residue of the estate, if the testator was personally liable for the debt. Texas followed this common law concept until 2005. Section 71A of the Texas Probate Code was enacted in 2005, and it, in effect, reversed the common law presumption of exoneration. Effective for wills executed on or after Sept. 1, 2005, a specific devise passes to the devisee subject to the debt secured by the property unless the will specifically states the devise passes without being subject to the debt. Tex. Est. Code Ann. §§255.301, 205.302.

Fractional gifts--Lapse of a fractional gift

Under the common law, if Bill predeceases the testator, the specific gift of his undivided one-third interest lapsed and passed as part of the residuary estate of the testator, and not to Tom and Brit. If the subject matter of the gift was the residuary estate itself, the gift of Bill's undivided one-third interest in the residuary estate would lapse pursuant to the common law rule and pass by intestate succession to the testator's heirs at law.

Incapacitated devisee

Upon the closing of the estate, the representative may discover that a devisee is incapacitated due to minority or mental or physical condition. A review of the will may reveal that the testator anticipated that possibility and directs that the incapacitated person's interest in the estate be delivered to a testamentary trustee on behalf of the devisee. If the devisee is incapacitated due to minority, the will may authorize the executor to create a custodianship for the minor devisee pursuant to the Texas Uniform Transfers to Minors Act, Chapter 141 of the Texas Property Code. Tex. Prop. Code Ann. §141.006. Absent such an authorization, the representative may also create the custodianship unless the custodianship is prohibited by the will or is inconsistent with its provisions. If the value of the property exceeds $10,000, court authorization is needed. Tex. Prop. Code Ann. §141.007. In other situations, the property due a minor or an incapacitated adult is typically delivered to a court-appointed guardian of the estate for the incapacitated devisee.