Most wills have a residuary clause. That clause is usually at the end of the will and says something like “I give all the rest and residue of my property to…” If property owned by the testator is not mentioned in the main part of the will, the residuary clause will determine who gets that property. What happens if your will does not have a residuary clause? In a 2014 case from the Florida Supreme Court that issue was before the court. A lady, the testator, had used an “E-Z Legal Form” for her will. It was properly executed and attested by two witnesses which Florida requires but it did not have a residuary clause. The will detailed all the property that she owned at the time and left the “listed” property to her sister. The will had a provision that if the sister didn’t survive her, the listed property would go to one of her brothers. The sister died before the testator. The sister left all of her property to the testator. The testator opened a separate account and put all of her sister’s property in that new account which was not listed in her will. The testator prepared an “addendum” to her “E-Z Legal Form” will that said “all my worldly possessions” go to my brother. It was in her handwriting and attested to by one person....Read More
Author: Robert Ray
A Business Partner Receives Life Insurance Proceeds to Buy a Deceased Partner’s Interest but Keeps the Money.
Insurance Policy for PartnerIn a 2014 case out of the Tyler Court of Appeals, the court decided a case involving life insurance proceeds between partners. Two men were partners in a business. They obtained life insurance policies on each others life for $2,000,000.00. When one partner died, the other partner decided to keep the two million dollars. The family of the deceased partner filed suit alleging that the life insurance policy was meant to go to the family of the deceased to buy out his interest in the company. The trial court ruled in favor of the living partner. The family appealed.
Who Owns the Life Insurance ProceedsAfter reviewing the facts, the court of appeals agreed with the trial court and ruled against the family of the deceased partner. They noted that while there were discussions about the money being used to buy out the family, there was never any contract to do so. Even though the deceased partner may have had a subjective belief that the proceeds of the insurance policy would be given to his family, his state of mind was insufficient to show a valid contract. Since the living partner was the sole beneficiary under the insurance policy, he kept all the money. 12-12-00150-CV.
What Should Have Been DoneThe family of the deceased partner believed that the partners had agreed to pay for the insurance policy to protect the family of a partner who died. Just because they believed that didn’t create a contract where none existed. The partners should have entered into a written contract to protect their families. With this much money involved, the partners could have afforded a competent attorney who could have advised them on the proper way to achieve their goals.
The Austin Court of Appeals upheld a sentence of 25 years given to a man who abused a power of attorney. The man was the former grandson-in-law of the elderly lady who gave him the power of attorney. Using the power, he transferred the title of her car to himself, cashed in a life insurance policy, deeded her house to himself and changed the locks. He left instructions with the nursing home where the elderly lady was staying not to let any of the other family members in. The former grandson-in-law said that he wasn’t guilty because he had been advised by an attorney that he consulted on qualifying the lady for medicaid to “spend down” her assets to qualify her for medicaid. The attorney testified that he could basically spend the money, which would include some gifts and that those gifts would incur a penalty, making the lady eligible for Medicaid after the expiration of a penalty period. The court noted that the power of attorney did not give the former grandson-in-law the power to make gifts. The sentence was upheld. The court relied on Texas authority relating to the powers conferred by a power of attorney (authority conferred by power of attorney will be strictly construed to exclude exercise of any power not warranted by document’s actual words or “as a necessary means of executing the authority...Read More
No, says the Dallas Court of Appeals. The court stated that under Texas law, spendthrift trusts are trusts with language prohibiting the voluntary or involuntary alienation of the beneficial interest. A spendthrift trust protects the beneficiary from his creditors by expressly forbidding alienation of the beneficiary’s interest in the trust. Where it appears from the terms of the instrument creating the trust that it was the donor’s or testator’s intention to create a trust estate immune from liability for the debts of the beneficiary and to prohibit its alienation by him during the term of the trust, a spendthrift trust is created, and the intentions of the donor or testator will be enforced by the courts of this State. Although beneficial interests in trusts are generally assignable, attempts to assign such interests are invalid when they are subject to a spendthrift provision in the trust. Based on the law of spendthrift trust, the trial court could not order the trustee to pay spousal support to the wife pending a divorce. The court noted that the trial court could order support for children from a spendthrift trust but that was based on a specific statutory provision. There was no similar statutory provision for spouses. Copyright by Robert Ray a Texas inheritance attorney. The foregoing information is general in nature and does not apply to every fact situation. If you are concerned about inheritance laws,...Read More
You are alive. Someone files a probate action in court saying that you are dead. When you show up alive, some expenses of the probate action have already accrued and some of your money has been spent. Who is responsible? You are says an Illinois Appellate Court. A man had no contact with his family and friends for more than seven years. His sister, his sole heir, filed a probate action asking that he be declared dead. The probate court ruled that the man was presumed dead. The main asset was a stock account worth about $500,000 that the man had apparently abandoned years before. During the probate, the man was located alive. The attorneys who were representing the sister in the estate asked the court to pay them out of the assets of the man who was not dead. The court did so and the court of appeals upheld that decision. The sister had also spent $100,000 of the funds and had no means to pay them back. The moral of this story is keep in touch with your relatives and friends are you may be charged for a probate action that you don’t need. 997 N.E.2d 913. Copyright by Robert Ray a Texas inheritance attorney. The foregoing information is general in nature and does not apply to every fact situation. If you are concerned about inheritance laws, inheritance rights, have...Read More
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Board Certified, Personal Injury Trial Law — Texas Board of Legal Specialization. We handle litigation cases related to inheritance disputes including will contest, related property disputes and associated torts throughout Texas. Our principal office is in Tyler, Texas. Contact Robert