Power of Attorney A power of attorney in Texas creates a fiduciary duty between the person who holds the power (agent) and the person who gives it (principal.) The agent owes his principal a high duty of good faith, fair dealing, honest performance, and strict accountability. A 2015 case out of Fort Worth dealt with the issue of breaching a fiduciary duty in Texas. Deed A man (agent) had his aunt (principal) give him a power of attorney. About a year before the aunt died, the nephew executed deeds to the aunt’s real estate to himself and his son. After the aunt died, a probate was filed. When the beneficiaries of the aunt found out about the deeds, they were understandably upset. Family Settlement Agreement Apparently, most of the beneficiaries did not have the money to sue the agent so they entered into a family settlement agreement to give one of the beneficiaries the right to sue the agent for breaching a fiduciary duty in Texas. Suit was filed and the trial court ruled that a breach of fiduciary duty had occurred. The agent claimed that the power of attorney gave him the right to deed the property so he appealed. Self-Dealing The appeals court agreed that the agent had the power to deed the property but ruled that a breach of fiduciary duty had occurred. The court pointed...Read More
Author: Tony Ray
A professor at one of Texas’ Law Schools wrote an article about the future of marijuana and Probate in Texas. You can find the article here. Abstract With the legalization of medical and recreational marijuana in almost half of the states, practitioners need to be aware of interface between marijuana and estate planning. This article provides a discussion of the major issues that arise. After bringing readers up-to-date with the history of legalized marijuana, the article focuses on how marijuana use may impact a user’s capacity to execute a will and other estate planning documents. The article then examines other estate planning concerns such as will and trust provisions conditioning benefits on the non-use of “illegal drugs” and the impact of marijuana use on life insurance policies. The article wraps up with a discussion of how an estate planner may deal with marijuana-based assets when planning an estate and how to value those assets after the owner has died. The Author Professor GERRY W. BEYER, Governor Preston E. Smith Regents Professor of Law, Texas Tech University School of Law. B.A., Eastern Michigan University; J.D., Ohio State University; LL.M. & J.S.D., University of Illinois....Read More
Ordinary WillsThis case does not apply to someone who urges an elderly person to make a will. Everyone should be urged to make a will. In the case decided by the Dallas Court of Appeals, there was evidence that the man who was charged, who was not related to the deceased, talked her into making a will for his benefit while she was in the hospital during her last illness. The lady had a child and her previous will named the child as her beneficiary.
Bank is not Liable Says Texas Supreme CourtIn what I consider a strange holding, the Texas Supreme Court ruled in 2015 that when a Texas bank gives money to wrong person, the bank may not be liable.
FactsThe case dealt with a joint account with right of survivorship. A husband and wife opened the account. The account was a joint account with right of survivorship meaning that when one died, the survivor owned the account. The account also had a pay on death clause that paid the money to two people equally when the last of husband or wife died. When the bank heard that the husband died, they issued a check to the two pay on death beneficiaries instead of leaving the money in the account under the wife’s name. One of the pay on death beneficiaries (first) kept the money. The other one (second) put the money into an account for the wife. He also had a power of attorney for wife and demanded that the bank reimburse the wife for the money that had gone to the first one. The bank admitted the mistake and attempted, unsuccessfully, to get the money back from the first one. After the wife died, the executor of her estate (second) filed suit against the bank.
No DamagesA jury found that the bank breached its duty to wife but found that the wife suffered no damages. The trial court entered a judgment against the bank for the full amount given to the first one, called judgment notwithstanding the verdict, JNOV. The court of appeals upheld the judge’s JNOV. However, when the case went to the supreme court, they overturned it. The supreme court ruled that the estate suffered no damage because the one half of the original account would have gone to the first one if no changes had been made! This doesn’t address the issue of what would happen if the wife had all the money and decided to spend it or to put it into another account (as she had done after the funds were disbursed.) I don’t understand how the bank is not liable for giving depositor’s money away. There was no discussion of any constraint on the wife to use that money, to give it to someone else or to just go to Las Vegas and blow it. It was wife’s money! How could giving it to someone else not cause damages! The only way to justify this case is that the two pay on death beneficiaries were not relatives of the husband and wife and that if the bank had paid the money back to wife, it would have ended up in the account opened by the second beneficiary after the fact and he would get all of the money. There is no discussion of these issues or what the wife’s wishes were. There is a brief mention of a guardian for wife but not discussion of what wife wanted done with the money.
Grounds for removal of executor in Texas A Texas executor can be removed by the probate court but not because the beneficiaries under the will don’t like him. A Texas executor can only be removed for specific reasons that must be pled and proven by the beneficiaries who are seeking his removal. Some of those grounds are gross misconduct, gross mismanagement and a material conflict of interest. Gross Mismanagement In a 2015 case from the San Antonio court of appeals, the beneficiaries pled that the executor had not “assiduously pursued settlement of the estate” and that the executor had a conflict of interest with the estate. The application further alleged that “grounds exist for removal of the independent executor due to misapplication of funds and other fiduciary property, breach of fiduciary duty, and self-dealing in estate property.” The complaint was that the executor had not tried to to sell the estate’s only asset, a house, and that he had moved in the house and was not paying rent. The executor claimed that the application for his removal did not allege gross misconduct, gross mismanagement, or material conflict of interest as grounds for his removal which are the only grounds for removal. The court ruled that Texas has notice pleadings and that the application in this case while not using the words in the removal statute were sufficient to give...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