TABLE OF CONTENTS
I. INTRODUCTION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A.Scope.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
B.A Hypothetical Case.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
C.Conventions of Usage.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
II. THE ARENA -- UNIQUE ASPECTS OF THE PROBATE PROCEEDING. . . . . . . 2
A.In Rem proceeding.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
B.Duty and Responsibility of Judge.. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
C.One Proceeding but Multiple Final Orders.. . . . . . . . . . . . . . . . . . . . 3
D.Transfers and Appeals.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
III. ROUTINE ISSUES -- WILLS, INVENTORIES, AND ACCOUNTS.. . . . . . . . . . 5
A.Preparation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
B.Proof of Wills.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
C.Inventory, Appraisement, and List of Claims.. . . . . . . . . . . . . . . . . . . 7
D.Annual Accounts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
IV. REPRESENTATIVE TYPES OF PROBLEM ESTATES.. . . . . . . . . . . . . . . . . . . . . 9
A.The Contested Application for Appointment.. . . . . . . . . . . . . . . . . . . 9
B.The Nonperforming Executor or Administrator.. . . . . . . . . . . . . . . . . 10
C.The Insolvent or Illiquid Dependent Administration.. . . . . . . . . . . . . 10
D.The Will Contest.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
V. THE CONTESTED APPLICATION FOR APPOINTMENT.. . . . . . . . . . . . . . . . 10
A.Separate Issue from Will Contest.. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
B.Timing of the Contest.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
C.Qualifications Required.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
D.Disqualifying conditions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
E.Counterstrokes and Defenses.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1. Frivolous Claims.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2. Wrongful Interference With Inheritance Rights.. . . . . . . . . . . . . . 15
3. Rule for Costs.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
VI.THE NONPERFORMING
EXECUTOR OR
ADMINISTRATOR:
HEREIN OF ANNUAL ACCOUNTS, REMOVALS, AND CLOSINGS.. . . . . . . . .
15
A.Getting the Facts -- Accountings and Disclosures.. . . . . . . . . . . . . . . 16
B.Forcing Compliance -- Bonds and Penalties.. . . . . . . . . . . . . . . . . . . 17
1. Recovery of Fees and Expenses.. . . . . . . . . . . . . . . . . . . . . . . . . . 17
2. Common-law Suit for Settlement of Estate and devastavit.. . . . . . 18
3. Bonds.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4. Wrongful Withholding Penalty.. . . . . . . . . . . . . . . . . . . . . . . . . . 19
5. Statutory Penalty for Failure to File Reports.. . . . . . . . . . . . . . . . . 19
6. Criminal Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
a.Theft by Fiduciary.19
b.Perjury.20
7.Discovery Sanctions.. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.Master in Chancery; Auditor.. . . . . . . . . . . . . . . . . . . . 20
C. Radical Surgery -- Removing the Personal Representative.. . . . . . . . . . . 21
D. The End Run -- Removing the Estate from Administration.. . . . . . . . . . . 22
1.Accounting and Distribution.. . . . . . . . . . . . . . . . . . . . 22
2.Family Settlement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.Common-law Suit for Settlement of Estate.. . . . . . . . . . 24
4.Bonded Closing.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.Receivership.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.Partition and Distribution Upon Petition.. . . . . . . . . . . 25
VII.THE INSOLVENT OR ILLIQUID ESTATE: DIVIDING THE PIE WHEN EVERYONE IS HUNGRY FOR MORE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
A.Claims from the Viewpoint of the Creditor.. . . . . . . . . . . . . . . . . . . . 26
1. Protection of Creditors.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2. Notices to Creditors.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3. Presentment of Claims.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4. Election of Secured Status.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5. Effect of Failure to Present Timely Claim.. . . . . . . . . . . . . . . . . . . 30
6. Claims in Independent Administrations.. . . . . . . . . . . . . . . . . . . . 31
B.Claims from the Viewpoint of the Administrator and the Probate Judge.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
1. Role of the Probate Judge.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2. Failure of Executor/Administrator to Act.. . . . . . . . . . . . . . . . . . . 32
C.Exempt and Protected Property.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
1. Homestead.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2. Exempt Property or Award in Lieu of Exempt Property.. . . . . . . . 33
3. Family Allowance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4. Apportionment of Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
D. Order of Payments and Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
E. Abatement of Bequests.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
VIII. THE WILL CONTEST: WELL BEGUN IS (SOMETIMES) HALF FINISHED.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
A.. Bold and Timely Transfer.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
B.. Promptly Appoint a Temporary Administrator.. . . . . . . . . . . . . . . . . . . 38
THE CONTESTED OR NONPERFORMING ADMINISTRATION:
Handling the Hot Administration Without Burning Yourself
Charles E. Hamilton, Attorney at Law
Brownsville, Texas
June 22, 1993
This paper is intended as a ready reference on the subjects mentioned for county judges serving as probate judges. Routine matters have been included for the judge newly come to the bench, while more advanced matters relating to typical problem cases are included to orient the judge who has not previously been called upon to rule in that area of the law. Space and time prevent a complete discussion of these subjects. While references to authorities are included and are believed to be valid, these are provided as leading authorities or starting points for the judge's own research and are not intended to be exhaustive. Opinions ventured by the author are those of the author and do not represent positions of his firm or clients in any pending matter.
THE FACTS: Two weeks ago, there was filed in your court an application for probate of the alleged will of one John Dowell, a prominent local merchant who recently died. John was survived by Merry Dowell, a former cocktail waitress who is the young widow of his second marriage, two infant children of that marriage, and two adult children of the first marriage. The two branches of the family are inclined toward hostility. John's will, which was executed shortly before he died, names Merry as his independent executrix, and leaves his estate in trust to Merry as trustee, to be used for the support of Merry and all the children, with the remainder to the children of the first marriage. You have now heard that John's business was having financial problems before he died, and he was acting oddly at times. The children of the first marriage have filed an answer opposing Merry's application for letters testamentary. Attorneys for the bank and two trade creditors have already mentioned to the clerk that they intend to file claims.
In the following discussion, the use of the masculine gender is for convenience only and does not reflect any gender bias. Because of the constant necessity of referring to the Texas Probate Code, those references have been condensed to the form "Prob. C."
II. THE ARENA -- UNIQUE ASPECTS OF THE PROBATE PROCEEDING
Before we consider contested proceedings, we need to review the duties of the probate judge and the nature of the probate proceeding in general.
Probate proceedings are in rem proceedings. Prob. C., § 2(e). In other words, the judgments are not for or against any person, but determine the status of the estate, which is the subject matter of the proceeding. Turcotte v. Trevino, 499 S.W.2d 705 (Tex. Civ. App. -- Corpus Christi 1973, writ ref. n.r.e.), later app. 544 S.W.2d 463, rev'd on other grounds, 564 S.W.2d 682 (Tex. Sup. 1978). The entire administration of the estate, from the filing of the application for probate to the final discharge of the last personal representative, is one proceeding for the purposes of jurisdiction. As a proceeding in rem, the actions of the probate court, if authorized by statute and regular in form, are binding on everyone having an interest in the estate. Gardner v. Union Bank & Trust Co., 159 S.W.2d 932 (Tex. Civ. App.--Fort Worth 1942, writ ref. w.o.m.).
Since the proceeding is in rem and an attempted administration of the estate of a living person is void, Prob. C. § 72(a), there appears to be no authority for waiving proof of the jurisdictional requirements such as the death of the decedent. Martin v. Robinson, 3 S.W. 550 (Tex.Sup. 1887); Soto v. Ledezma, 529 S.W.2d 847 (Tex. Civ. App.--Corpus Christi 1975).
B. Duty and Responsibility of Judge.
Prob. C. § 36 provides that if damage or loss shall result to estates or wards through the gross neglect of the judge to use reasonable diligence in the performance of his duty, he shall be liable on his bond to those damaged by such neglect. The duties enumerated by this section are:
--to use reasonable diligence to see that personal representatives perform their duties,
--to examine the condition of the estates annually, if in his opinion it is necessary, and
--to require the personal representative to post a new bond if the old one is not sufficient.
The case of Heyn v. Massachusetts Bonding & Ins. Co., 110 S.W.2d 261 (Tex. Civ. App.--Dallas 1937, writ dism'd) held this section to be effective.
There is an interesting interaction between the provisions of Section 36, supra, and Title 31 U.S.C.A. § 3713. This section of the U. S. Code gives the United States of America an express statutory lien with priority over most other creditors of the estate and makes the administrator personally liable to the extent of the estate distributed without payment of the debts due the United States. One might wonder whether, in a proper case, the U. S. Internal Revenue Service, as a secured creditor of the estate, may one day come calling on the judge having authority over the estate if the inventory discloses that the estate is subject to the estate tax and the court has approved a distribution that does not reflect that the taxes have been paid.
Fortunately, this grisly scenario is mere speculation at this point and I assume that all probate judges check to be sure the debts due the U. S. Internal Revenue Service have been paid before approving final accounts.
C. One Proceeding but Multiple Final Orders.
Perhaps the oddest aspect of the probate proceeding for the judge accustomed to the concept of a civil trial culminating in a single, final judgment, is the probate concept of the "final order." As mentioned above, there is but one proceeding in the usual probate case, from the initial application to the final discharge of the last personal representative. However, each "final order" in the probate process is appealable to the applicable court of appeals. Prob. C. § 5(e). An order is a final order if it disposes of and is conclusive on the issue or controverted question for which that particular part of the proceeding was brought. Kelly v. Barnhill, 188 S.W.2d 385 (Tex.Sup. 1945); Fischer v. Williams, 331 S.W.2d 210 (Tex.Sup. 1960).
Examples of such "final orders" are the following:
--Granting or denying an application for letters testamentary or of administration, Coombs v. Bush, 15 S.W.2d 602 (Tex.Sup. 1929);
--Appointing or refusing to appoint a temporary administrator, Long v. Richardson, 62 S.W. 964 (Tex. Civ. App. 1901, no writ);
--Making permanent the appointment of a temporary administrator, Goldstein v. Susholtz, 105 S.W. 219 (Tex. Civ. App. 1907, writ ref.);
--Approving or classifying claims against an estate, §§ 312(e) and 317(c), Prob. C.;
--Approving or modifying the inventory, Anderson v. Anderson, 535 S.W.2d 943 (Tex. Civ. App.-- Waco 1976, no writ); and
--Confirming or disapproving a report of sale, § 355, Prob. C.
Note that to be a final order, the decision or order need not be one that fully and finally disposes of the entire probate proceeding.
Where probate matters are originally filed in the constitutional county court and some aspect of the proceeding becomes contested, the Probate Code provides that upon the motion of any party to the proceeding, or on the motion of the judge of that court, the constitutional county court is to transfer the contested portion of the proceeding to the district court for hearing and determination. Prob. C., § 5(b); McDonald v. Dunn, 570 S.W.2d 248 (Tex. Civ. App. -- Waco 1978, no writ); Novak v. Stevens, 596 S.W.2d 848 (Tex.Sup. 1980). If there is a county court at law or other statutory court exercising the jurisdiction of a probate court, then the transfer is to be to that court instead of the district court. Prob. C., § 5(c). The county court continues to supervise the uncontested portion of the administration, and the district court is to restore the contested portion of the proceedings to the county court when the contested matters have been determined.
If the probate matter is filed in a county court at law or other statutory court exercising the jurisdiction of a probate court, then that court is to hear and determine the entire probate proceeding, and a transfer to the district court is unauthorized and void. Meek v. Mitchusson, 588 S.W.2d 665 (Tex. Civ. App.-- Eastland 1979, writ ref'd n.r.e.).
All appeals of final orders of any court exercising original probate jurisdiction are to the Courts of Appeals. Prob. C., § 5(e).
III. ROUTINE ISSUES -- WILLS, INVENTORIES, AND ACCOUNTS.
In this section I have discussed certain points with which the court may be faced on a somewhat routine basis in the handling of the court's probate business. This is not intended as a full exposition of the law, but as a helpful commentary when facing some common issues.
I would make it a point to flip through the file before taking the bench to determine whether anything out of the ordinary appears. If there is something in the file that may create a problem, confer with counsel and ask them what they intend to offer as proof, and for their legal authorities. This will give you an opportunity to consider the matter before being asked to rule on evidentiary questions, and will give you a good idea whether you will want to ask for further legal authorities or proof before ruling.
When taking the bench, I would always have at hand the softback Texas Rules of Civil Procedure and the softback Probate Code pamphlet. It is virtually impossible to be familiar with the intricacies and details of all the rules, and a quick look at the applicable rule can save considerable trouble later.
The attorney may be momentarily annoyed if the judge keeps him standing there while the judge consults the rule or if the judge requests the submission of authority for a requested ruling, but the annoyance quickly passes, and it will be replaced by respect for the judge who wants to know and follow the law.
Texas recognizes both the holographic (hand-written) will and the more usual written will signed by the testator and witnessed by two or more witnesses. Texas also recognizes the noncupative or oral will, but this is very rarely encountered. A written will may be made self-proved, but this not essential.
Section 84, Prob. C., sets forth the elements of proof of a written will produced in court. However, this must be read together with the provisions of Section 81, Contents of Application for Letters of Testamentary, and Section 88, Proof Required for Probate and Issuance of Letters Testamentary or of Administration.
Concerning the application, the 1987 amendments added the requirement that the application include the names and residences of the subscribing witnesses, if any, and the Social Security numbers of both the applicant and the decedent, and the 1989 amendments added the requirement that the application state whether the state, an agency of the state, or a charity is named as a devisee. § 81(a), Prob. C.
In some areas there seems to be some confusion about the effect of a self-proved will, with some attorneys having the impression that no proof need be offered on the application if the will was made self-proved. The Probate Code does not support this view. Section 88, Proof Required, is divided into five sections, and the first contains the general proof required pursuant to any application, whether to probate a will or for letters of administration. These elements are:
1.That the decedent is dead and four years have not elapsed since his death;
2.That the court has jurisdiction and venue over the estate;
3.That citation has been served and returned as required by law; and
4.That an applicant for letters testamentary or letters of administration is entitled thereto and not disqualified.
In addition, Section 88(b)(3) requires proof that the will was not revoked by the testator, even if the will was made self-proved.
The requisites of a will are contained in § 59, Prob. C.:
"Every will and testament, except where otherwise provided by law, shall be in writing and signed by the testator in person or by another person for him by his direction and in his presence, and shall, if not wholly in the handwriting of the testator, be attested by two (2) or more credible witnesses above the age of fourteen (14) years who shall subscribe their names thereto in their own handwriting in the presence of the testator..."
The will may be made self-proved, so that the will may be admitted to probate without the testimony of any subscribing witness by having the testator and the witnesses execute a self-proving clause, which must be substantially in the form set out in § 59, Prob. C.
To be self-proved, a will must first have been properly executed under the rules governing wills generally. Until 1991 it was the rule in Texas that the self-proving clause, if used, was not a part of the will, and that if a witness had failed to sign the will then a signature in the self-proving clause did not supply the missing signature. The result was that the missing signature invalidated the purported will. Boren v. Boren, 402 S.W.2d 728 (Tex.Sup. 1966), and many subsequent cases. This was a terrible result and this rule was remedied in 1991 by the amendment of § 59, Prob. C., to provide that a signature on a self-proving affidavit is considered as a signature to the will if necessary to prove that the will to prove that the will was signed by that person, but in that case, the will may not be considered as a self-proved will.
If the will has not been made self-proved then the due execution of the usual attested written will may be proved by the testimony or affidavit of either of the witnesses, taken in open court. Prob. C., § 84(b)(1). If neither of the attesting witnesses is available for the reasons set out in § 84, a wide variety of alternatives is provided in subparagraphs (b)(2) and (3) of § 84. If the will is holographic (wholly in the handwriting of the testator) then the will, if not made self-proved, may be proved by two witnesses to the handwriting of the decedent. § 84(b), Prob. C. In either case, the testimony may be furnished by depositions.
If no administration of the estate is necessary and the probate of the will is necessary only to document the passage of ownership of property or the like, then the court is authorized to enter its order admitting the will to probate as a "Muniment of Title" only. § 89, Prob. C.
C. Inventory, Appraisement, and List of Claims.
The executor or administrator is required to file his sworn inventory and list of claims within 90 days after he qualifies, unless the court permits a longer time or requires an earlier inventory. Prob. C., §§ 250 and 251. The claims to be listed are the claims of the estate against others, not claims against the estate. § 251, Prob. C. Since the estate tax return and the inheritance tax return are due within nine months after date of death in taxable estates, it is fairly common for the applicant to request the court to extend the deadline for the inventory in these estates. The extension permits the same values to be used for both the tax returns and the inventory, and there seems to be little harm in granting the extension unless an interested party requests an earlier filing.
It is now the custom to waive the appointment of appraisers. Although there is provision for the appointment of appraisers on the request of any party or if the court deems it necessary, § 248, Prob. C., appraisers are seldom used in modern times.
The judge is to review the inventory and list of claims when filed and either approve the inventory or, if disapproved, order the return of a new inventory within 20 days. § 255, Prob. C. There are provisions for removal of the personal representative for failure to file an inventory, as discussed below under "Radical Surgery -- Removing the Personal Representative."
The estate's representative (if not an independent executor) is required to file annual accounts. § 399, Prob. C. Independent executors are not ordinarily required to file annual accounts, since by definition no other action is to be had in relation to the settlement of the estate other than the probating and recording of the will and the return of the inventory, appraisement and list of claims. Prob. C., § 145(b). Actions to compel accounts are discussed below under the section relating to the nonperforming executor or administrator.
Annual accounts are the primary tool that a probate judge has available to monitor the performance of the personal representative, and the simple necessity of making and filing an annual account is of powerful assistance to the attorney in holding the personal representative to his duties. Unlike some of the Probate Code, the provisions governing annual accounts are easy to find and easy to understand, as are the penalties for noncompliance. The judge who is presented with a nonconforming account may wish to conduct a hearing to determine why the personal representative or his attorney cannot follow the checklist provided by Section 399(a), Prob. C.
The supporting documentation required to be attached to the annual account is specified in Section 399(d), and may be summarized as follows:
1. Proper "vouchers," or in the absence of vouchers, then evidence satisfactory to the court, for each item of credit claimed in the account;
2. An official letter from the bank or other depository holding money of the estate, showing the amounts in general or special accounts; and
3. Proof of the existence and possession of securities owned by the estate, as well as other assets held by a depository subject to orders of the court.
When filed, the annual account is to remain on file for ten days before action by the judge. § 401, Prob. C. This section specifically provides that: "No accounting shall be approved unless possession of cash, listed securities, or other assets held in safekeeping or on deposit under order of court has been proved as required by law." § 401(d), Prob. C.
The approval of the annual account is made an important event in the administration by the provisions of Section 401(e), Prob. C., which require the court to order the full or partial payment of unpaid claims when approving the account.
Annual accounts are to be filed each year until the estate is closed. § 399(b), Prob. C.
IV. REPRESENTATIVE TYPES OF PROBLEM ESTATES.
The Probate Code provisions for the transfer of contested matters to the district court upon the motion of either party or upon the court's own motion will minimize the number of hotly contested cases which the County Judge will be required to hear. However, the parties and the judge may prefer not to transfer the issue, so the applicable rules are worth reviewing. Problem estates will usually arise in the context of one of the four areas itemized below.
A. The Contested Application for Appointment.
The contested application usually comes up in one of two situations, which may be combined: (1) The other beneficiaries are concerned that the applicant can't or won't do the job right; or (2) This is the first skirmish in a battle for an interest in the estate. We will look at this situation more closely in a moment.
B. The Nonperforming Executor or Administrator.
This is the situation in which the executor, administrator, or guardian (the personal representative) is not reporting to the other heirs, is not filing required accounts, or perhaps is mismanaging the estate.
C. The Insolvent or Illiquid Dependent Administration.
Special care is required where the estate may not be sufficient to pay all the creditors and provide a family allowance. With the recent problems in the oil industry and real estate, this has been an increasingly common problem. We will look at some key issues in an estate such as John Dowell's, including ranking the claims and passing on requests for homestead and family allowances.
A full discussion of the will contest is well beyond the limits of our allowable time. However, the proper actions at the beginning of the will contest can certainly make your job easier as things go along.
V. THE CONTESTED APPLICATION FOR APPOINTMENT.
A. Separate Issue from Will Contest.
In our sample estate, no will contest has been filed -- yet. The issue is going to be whether you should appoint Merry, the widow, as independent executrix.
There is considerable sentiment among the probate bar that one of the most effective methods of preventing damage to an estate at the hands of the personal representative is to attack before the personal representative qualifies -- a preemptive strike. See, for instance, Cenatiempo, Handling the Difficult or "Runaway" Independent Executor or Trustee, Twenty-Seventh Annual Institute on Wills and Probate (Southwestern Legal Foundation, 1988). This may take the form of an application for letters of temporary administration, or a contest of the appointment of the executor or executrix. In either case, issues are likely to be raised concerning the qualifications required for appointment, and potential disqualifications of the various applicants.
A request for a temporary administration is likely to be made if the will is contested or if the appointment of a personal representative is contested. Section 132, Prob. C., provides that the court may, during the pendency of such a contest, appoint a temporary administrator with such powers as the circumstances of the case require. Although the first paragraph of Section 132 speaks of "limited powers," the second paragraph makes it clear that the administrator can be granted full powers of a permanent administrator if necessary or expedient. This power is in addition to the court's power to appoint a temporary administrator under Section 131A of the Code.
Although Section 131A, Prob. C., authorizes the appointment of a temporary administrator, there are significant limitations on the effectiveness of the administration that can be conducted under this section. The duration of the appointment must be specified in the court's order of appointment and cannot exceed 180 days unless made permanent. On the same day that the appointment is made, the clerk is required to post notice of the appointment. On the date the county clerk issues letters of appointment, the appointee is required to notify the "known heirs" by certified mail of his appointment and their right to contest the same within 15 days after the date that the letters of appointment were issued. A Section 131A appointment is obviously not suited for a semipermanent administration of a contested estate, and it should probably be converted to a Section 132 temporary administration if a contest develops.
If a disinterested and efficient administrator is appointed early in the case, it is possible that the administration will be substantially complete before a will contest can be completed, and that very little will remain to be done besides distributing the estate according to the directions of the will or the laws of descent and distribution, depending on the outcome of the contest. I recommend that the court make every effort to appoint a qualified temporary administrator with broad powers when faced with a temporary administration during the pendency of a contest.
To be qualified for appointment as executor or administrator, the person appointed must not be disqualified under Section 78 of the Probate Code. The preceding Section 77 of the Code specifies the order in which persons are to be granted appointment:
--The executor named in the will;
--The surviving spouse;
--The principal devisee or legatee;
--Any devisee or legatee under the will;
--The next of kin in order of descent;
--A creditor of the deceased;
--Any person of good character residing in the county who applies for appointment; and
--Any other person not disqualified.
The order of persons to be considered is complicated by Section 79, Prob. C., which allows the surviving spouse or heirs to waive appointment in favor of another qualified person, who in effect takes on the priority of the person waiving appointment. Stevens v. Cameron, 101 S.W. 792 (Tex.Sup. 1907); Schwalbe v. Cooper, 211 S.W.2d 585 (Tex. Civ. App.--Waco, 1948, writ ref'd). However, in order for the right to appoint another to be effective, the person renouncing must have the superior right to be appointed, and the person renouncing must not himself be disqualified, or the designation will not be effective. Zamora v. Garza, 129 S.W.2d 401 (Tex. Civ. App.--San Antonio 1939, no writ).
Although the list of disqualifying conditions in Section 78, Prob. C., is short, there is a fairly substantial body of law on the subject of disqualified fiduciaries. The list of persons who are not qualified to serve as an executor or administrator may be summarized as follows:
--A minor;
--An incompetent;
--A convicted felon, unless duly pardoned or his civil rights restored;
--A non-resident who (or which) has not filed with the court an appointment of a resident agent for service;
--A corporation not authorized to act as a fiduciary in Texas; and
--A person whom the court finds unsuitable.
So, whom may the court find unsuitable?
Section 178 (b) of the Probate Code might seem to provide a separate statutory ground of disqualification. It provides for letters of administration to issue where the executor fails to qualify within 20 days of appointment or neglects for 30 days to present the will for probate. However, several cases have indicated that a fairly substantial delay will not, standing alone, disqualify the executor. Higginbotham v. Alexander Trust Estate, 129 S.W.2d 352 (Tex. Civ. App.--Eastland 1939, writ ref'd); Alford v. Alford, 601 S.W.2d 408 (Tex. Civ. App.--Houston [14th Dist.] 1980, no writ). The latter case involved a delay of 50 days in filing the application.
The contest of the appointment need not be made by another applicant. Any "interested person" may make application for the appointment of an administrator if the person named as executor is disqualified. Prob. C., § 76 (c). The definition of interested persons includes heirs, devisees, spouses, creditors, and any others having a property right in, or claim against, the estate being administered. Prob. C., § 3 (r); Boyles v. Gresham, 309 S.W.2d 50 (Tex.Sup. 1958). While the early Texas courts seemed to take the position that a person has an absolute power to select his own independent executor, Higginbotham v. Alexander Trust Estate, supra, more recent cases seem to indicate that the usual fiduciary qualifications are required.
Certainly there is substantial discretion allowed to the trial court in finding a disqualification for the appointment of an administrator. Both Haynes v. Clanton, 257 S.W.2d 789 (Tex. Civ. App.--El Paso 1953, writ dism'd by agr.), and Bays v. Jordan, 622 S.W.2d 148 (Tex. App.--Fort Worth 1981, no writ) have used this language:
"Clearly, one whose personal interests are so adverse to those of the estate or the beneficiaries thereof that both cannot be represented by the same person is not a proper person to administer the estate."
and
"In the case of an administrator claiming ownership, the estate's title is denied by the claimant. In such a case ... the administrator could only represent himself without embarrassment, he could not represent the estate."
To the same effect is Formby v. Bradley, 695 S.W.2d 782 (Tex. Civ. App.--Tyler 1985, writ ref'd n.r.e.). In Bays v. Jordan, supra, the Court of Appeals held that the probate court had abused its discretion in appointing an administrator who was also claiming ownership to property claimed by the estate.
The list of exclusions under Section 78, Prob. C., is not exhaustive and other disqualifications can exist. Stevens v. Cameron, 101 S.W. 791 (Tex.Sup.); Haynes v. Clanton, supra. It has been stated that, "A person applying for letters of administration has always been required to have the character, and to possess the degree of honesty and integrity, required of a trustee." Cain v. Haas, 18 Tex. 616 (1857); Harris v. Hicks, 34 S.W. 983 (Tex. Civ. App. 1896); Stevens v. Cameron, supra; Haynes v. Clanton, supra. This is logical since the personal representative has the same standard of care as a trustee. Humane Society of Austin and Travis County v. Austin National Bank, 531 S.W.2d 574 (Tex.Sup. 1975), cert. denied 475 U.S. 976 (1976).
With the substantial body of law relating to qualifications and disqualifications of trustees to draw upon, the court should find substantial guidance in considering these questions. A part of this law has now been codified in the Texas Trust Code as embodied in Chapters 111-123 of the Property Code. However, Section 112.008, Capacity of Trustee, does not deal with the sorts of disqualifications which arise from adverse interests, and the courts appear to be free to deal with the issue under the established authorities.
E. Counterstrokes and Defenses.
The role of the contestant of the application for appointment is not without its hazards, and it has recently become more hazardous. If the will contains "no contest" clauses, the hazard is obvious for the potential heir. However, there are other, less obvious hazards:
1. Frivolous Claims. In the new Texas Civil Practice and Remedies Code at Sections 9.001 et seq. are sanctions for frivolous claims, and these sanctions are echoed to some extent in the amended Rule 13, Tex. R. Civ. Proc. In essence, these impose sanctions upon the party or the attorney signing a pleading that makes claims which are both groundless and brought in bad faith, or groundless and brought for an improper purpose such as unnecessary delay or the needless increase in the cost of litigation.
2. Wrongful Interference With Inheritance Rights. With Texas' recognition of the tort of wrongful interference, either the estate contestant or the claimant acting in violation of established law may face a claim of tortious interference where the contest is in connection with a prospective inheritance or administration and the opposing party's actions are demonstrated to be unfounded. King v. Acker, 725 S.W.2d 750 (Tex. App.--Houston [1st Dist.] 1987, no writ), cited with approval, Weatherly v. Martin, 754 S.W.2d 790 (Tex. App.--Amarillo 1988, no writ). See, however, Neill v. Yett, 746 S.W.2d 32 (Tex. App.--Austin 1988, err. den.) which suggests considerable incertitude about this theory of recovery.
3. Rule for Costs. Section 12, Prob. C., provides that when a person other than the personal representative of an estate files an application, complaint, or opposition in relation to the estate, he can be required to give security for the probable costs of the proceeding. Rule 143, Tex. R. Civ. Proc., makes similar provision, and provides that the order for costs may be made by the court on its own motion. For an example of the rule for costs in the context of a will contest, see Clanton v. Clark, 635 S.W.2d 567 (Tex. Civ. App.-- 1982), aff'd 639 S.W.2d 929. I find it difficult to imagine when the court would not grant such a motion, as it is to the benefit of the court officers and the estate not to have uncollectible costs accrue. Note that the personal representative is not required to post security for costs. § 12(c), Prob. C.
VI. THE NONPERFORMING EXECUTOR OR ADMINISTRATOR: HEREIN OF ANNUAL ACCOUNTS, REMOVALS, AND CLOSINGS.
Our second typical problem area in estate administration revolves around what I call the "nonperforming administrator." As an illustration of a typical set of problems, let's assume that about 18 months ago you appointed Merry Dowell, the widow, as the independent executrix of old John Dowell's estate. No will contest was actually filed and you weren't satisfied that Merry was disqualified to serve. She was appointed to serve without bond, as the will provided.
Now, a fresh round of pleadings has been filed, claiming that Merry won't account for the estate or for her actions, that the bills aren't being paid, and that she should be removed or punished. Let's also keep in mind what might happen if, instead of an independent executrix, this were a regular dependent administration.
Where do the other heirs stand, and what can you do to make the administration function as it should?
A. Getting the Facts -- Accountings and Disclosures.
If you are dealing with an independent executor rather than a regular dependent administrator or executor, the primary source for information will be through a demand for an accounting filed by a beneficiary or a creditor under Section 149A of the Probate Code. This section provides for accountings to be required from the independent executor at any time after 15 months from the date of the order appointing the independent executor. The accounting may be required by any "interested person," and must be furnished within 60 days after receipt of the demand. After the first accounting, subsequent accountings may be required at intervals of not less than 12 months. The interested person may apply to the court for enforcement if the accounting, as provided in Section 149A, is not provided within the 60 day limit.
If as much as two years have elapsed since appointment of the independent executor, a person interested in the estate may also directly petition the court for an accounting and distribution under Section 149B of the Probate Code. Unless or to the extent that the court does not find that there is a continued necessity for administration, the court is to order a distribution of the estate. Under the facts of our example, since more than 15 months have elapsed following the appointment of Merry Dowell as independent executrix, the heirs can compel an accounting but cannot yet compel a distribution under these two sections.
Of course, the reporting and accounting provisions are much more comprehensive in the regular dependent administration than in the independent administration. If we were to suppose that Merry, our widow/independent executrix, was serving as an administratrix with will annexed or a regular dependent administratrix, she would already be required to file annual accountings, unless waived by the court. § 399, Prob. C. In addition, after the inventory has been filed, anyone entitled to a portion of the estate may upon written complaint require the executor or administrator to be cited to appear and render under oath an exhibit of the condition of the estate. Prob. C., § 262.
B. Forcing Compliance -- Bonds and Penalties.
Several provisions of the Probate Code and the common law offer the heirs and the probate judge substantial assistance in getting the attention of the wayward executor or administrator. These include some surprisingly harsh or inventive remedies.
1. Recovery of Fees and Expenses. Section 245 of the Probate Code, allows recovery against the personal representative and his sureties for costs of removal, unauthorized expenditures, and reasonable attorneys fees incurred in removing him and in obtaining his compliance regarding any statutory duty he has neglected. This is express statutory authority to shift the burden of noncompliance from the heir to the nonperforming executor.
In my opinion, the probate courts should use this section, which in effect punishes the executor for failure to perform statutory duties, in very much the same fashion as the discovery sanctions for failure to make discovery. The same considerations apply: So long as the courts are willing to allow the obligated party to shirk his duties, there is every reason to expect that the noncompliance will continue. So long as the courts were unwilling to effectively enforce the civil discovery rules, every advantage lay with the party who failed to comply with the rules, and it was not until the courts began to enforce the discovery rules seriously that the discovery "games" abated. Similarly, so long as the probate judge allows the executor to "stonewall" requests for accountings, the executor has the resources of the estate at his disposal, in effect fighting the heirs with their own money. At the first sign of a problem administration, a touch of the whip, in the form of an award of attorney's fees against the executor or administrator, may forestall a serious loss and inequity to the heirs of the estate.
2. Common-law Suit for Settlement of Estate and devastavit. Texas recognizes the beneficiary's right at common law to bring suit against the executor in the district court (or in the statutory probate court) for an accounting and distribution of the estate. Oldham v. Keeton, 597 S.W.2d 938 (Tex. Civ. App.--Texarkana 1980, writ ref'd n.r.e.). This action invokes the general powers of the court under the Declaratory Judgments Act, and authorizes the court to settle the fiduciary's accounts, order a distribution if appropriate, and surcharge the fiduciary in a claim for devastavit, usually phrased as mismanagement or waste of the estate. Gerrard v. McKenzie, 61 Tex. 40 (1884); Griggs v. Brewster, 62 S.W.2d 980 (Tex.Sup. 1933). This remedy is also expressly authorized against trustees. Texas Trust Code, § 115.001(a). Where the situation is complicated, this may be the wronged heir's best overall remedy. This is especially true in view of the statutory limitations on the power of the constitutional county courts and the statutory county courts at law, which prevent these courts from imposing a constructive trust to follow misapplied property. Prob. C., § 5A(a), Ragland v. Ragland, 743 S.W.2d 758 (Tex. App.--Waco 1987, no writ).
One court has mentioned the newly recognized tort of wrongful interference with inheritance rights as permitting action against an executor individually for making and receiving payments without just cause. Weatherly v. Martin, 754 S.W.2d 790 (Tex. App.--Amarillo 1988, no writ). However, this is probably only an alternate theory for the long recognized action for devastavit.
3. Bonds. An order for an increased bond furnishes the probate judge a broad arena for the exercise of discretion in the protection of the estate and for the display of his exercise of care in the discharge of his Section 36 diligence without directly discharging the executor. Under Prob. C. Section 149, the independent executor may be required to give bond on the application of any "interested person" and a showing that the independent executor is mismanaging the property or has betrayed or is about to betray his trust, or has in some other way become disqualified.
The entry of an order requiring a new bond automatically suspends the authority of the personal representative (except to preserve the property of the estate) until the new bond has been given and approved. Prob. C., § 207. If the order requiring the new bond recites the reasons for requiring it, the practical fact is that the executor may find it difficult or impossible to obtain the new bond, effectively removing the executor or ensuring that the surety will closely monitor his actions.
In addition, the surety can also petition for termination of the bond at any time, halting the acts of a personal representative in which the surety no longer has confidence. § 210, Prob. C.
4. Wrongful Withholding Penalty. Surely one of the grand champion harsh penalties is the penalty for wrongful withholding. Where the executor or administrator wrongfully withholds property after a required distribution, Sections 384 and 414 of the Probate Code provide a penalty of 10% of the value of the property wrongfully withheld for each month that the property is so withheld! This penalty is the personal liability of the executor, and it has been held that such damages may be awarded against an independent executor. Richardson v. McCloskey, 261 S.W. 801 (Tex. Civ. App.--Austin 1924), rev'd on other grounds, 276 S.W. 680 (Tex. Comm. 1925).
5. Statutory Penalty for Failure to File Reports. Upon written complaint filed by any person interested in the estate, the court may cite "any personal representative" to appear and show cause why he should not file the exhibit or report. Upon hearing, the court may order him to file the exhibit or report and may, unless good cause is shown for the failure, revoke the letters of the personal representative and fine him not over $1,000. Prob. C., § 403. A slightly different and more limited remedy for failure to file annual accounts is provided by Section 400, Prob. C., and the fine in that section is limited to a maximum of $500.
6. Criminal Charges. If the wrongful acts by the fiduciary are deliberate, you may feel that it is your duty to report the matter to the District Attorney for prosecution.
a. Theft by Fiduciary. If you are faced with theft or misappropriation, the applicable section will probably be Section 32.45, Texas Crim. Code, which provides as follows:
"A person commits an offense if he intentionally, knowingly, or recklessly misapplies property he holds as a fiduciary or property of a financial institution in a manner that involves a substantial risk of loss to the owner of the property or to a person for whose benefit the property is held."
The offense is a misdemeanor if the value of the property is less than $10,000 and it is a felony if the value is more than $10,000.
b. Perjury. If you are faced with deliberate, sworn misstatements of objective facts, the applicable offense is probably Aggravated Perjury, which is a third degree felony. The elements of the offense are provided in Sections 37.02 and 37.03, Tex. Penal C., and would ordinarily be satisfied by the sworn accountings provided to be made by the Probate Code, although prosecution in this connection seems to be rare.
7.Discovery Sanctions. The sanctions provided by the Rules of Civil Procedure are outside the scope of this presentation. However, they obviously overlap and compliment the remedies unique to the probate setting. The mere threat of striking the pleadings or dismissing one of the parties is likely to marvelously aid the concentration of a party who is not performing in the area of discovery.
8.Master in Chancery; Auditor. Contested accountings tend to be unwieldy from an evidentiary standpoint, and fortunately the court precedents and the Rules of Civil Procedure furnish a way to cut through most of the underbrush. Rule 171, Tex. R. Civ. Proc., expressly authorizes the appointment of a master in chancery, whose powers are to be specified by the court. The rule provides for requiring the production of evidence and for the parties to compel service of process and the attendance of witnesses. Compensation of the master is taxed as costs of suit.
Although Rule 166(f), Tex. R. Civ. Proc. seems to contemplate the use of a master only in cases when trial is to be to a jury, Texas law has long recognized the power of the probate courts to utilize the services of a master to state the accounts of the contested administration, especially where large sums or large numbers of transactions are involved. Dwyer v. Kaltayer, 5 S.W. 75 (Tex.Sup. 1887); Ray v. Fowler, 144 S.W.2d 665 (Tex. Civ. App.-- El Paso 1940, writ dism'd). The purpose of the appointment is to have the uncontested matters eliminated from the contest. Even on contested facts, the court may receive the master's report as conclusive unless either side files exceptions to his report. Richardson v. McCloskey, 276 S.W. 680 (Comm. 1925). The cases sometimes refer to the master as an auditor.
C. Radical Surgery -- Removing the Personal Representative.
You or one of the parties may well conclude that removal of the personal representative is the only effective remedy for a poorly run or dishonest administration. Somewhat different procedures are provided for the removal of independent executors than for the regular dependent executor or administrator. Since the requirements are somewhat more demanding for removal of independent executors, I have dealt with them first. Of course, these grounds are a fortiori included in the grounds for removal of the dependent administrator or executor.
The major grounds for removal of an independent executor are as provided in Section 149C of the Probate Code. Those grounds are:
1. Failure to return the inventory within 90 days, unless extended by the court;
2. Sufficient grounds appear to support the belief that the representative has, or is about to, misapply or embezzle property of the estate;
3.Failure to make an accounting required by law;
4. Gross misconduct or gross mismanagement in the performance of his duties;
5. The representative is sentenced to the penitentiary or is legally incapacitated.
No grounds are provided for removal without notice, unlike the grounds for removal of administrators under court supervision. Compare, § 222(a), Prob. C. Under Section 149C, removal is accomplished after citation of the independent executor upon motion of any interested person. Note that if the judge of a constitutional county court is not an attorney, this remedy is not available. § 149C(a), Prob. C. Apparently the legislature appreciates a good fight, as they have chosen to allow the recovery of costs and reasonable attorneys fees out of the estate by both an independent executor who defends his removal "in good faith," and also (in the court's discretion) by the party seeking removal. Neither allowance is contingent on success. § 149C, paragraphs (c) and (d).
An additional ground for removal is the failure to give bond after order under Section 149, Prob. C., which would seem to invoke the provisions of Section 213, Prob. C., as follows:
"If at any time a personal representative fails to give bond as required by the court, within the time fixed by this Code, another person may be appointed in his stead." (emphasis supplied).
The details surrounding the posting of a new bond by the independent executor under Section 149 are somewhat sketchy. For instance, the time to be allowed for posting the new bond, the amount of the bond, and the consequences of failure to make the bond are not explicitly stated and reference must be had to other sections of the Probate Code for guidance.
The provisions for removal of the personal representative under court supervision are considerably more comprehensive than for independent executors. The central provision for removal is Section 222, Prob. C., which provides a list of five grounds for removal without notice on the motion of any interested person, or even on the court's own motion. §222(a), Prob. C. The administrator may be removed after notice upon a more comprehensive list of grounds. § 222(b), Prob. C.
D. The End Run -- Removing the Estate from Administration.
If you don't remove the executor from the estate, might you remove the estate from the executor? Texas provides quite a smorgasbord of selections for the judge or attorney contemplating the separation of a personal representative from his estate. The following is probably not a complete list, but it should serve to illustrate the breadth of the choices.
1.Accounting and Distribution. Section 149B(b) allows the court to require the independent executor to distribute property not required for administration, upon petition of a person interested in the estate, presented more than two years after the date that an independent administration was created. Re Estate of Minnick, 653 S.W.2d 503 (Tex. App.-- Amarillo 1983, no writ). In absence of recognized exceptions, the independent executor has no right to withhold the property of the devisees and legatees, or to dissipate the estate by prolonged administration, with its attendant fees and expenses. In re Estate of Lewis, 749 S.W.2d 927 (Tex. App.--Texarkana 1988, writ den.) If the executor is merely failing to transfer assets after the administration is finished, the court may, on the application of a distributee, close the estate, and the order so entered is authority to the custodian, registrar, or transfer agent to transfer the property to the persons named in the will, much as if the will had been probated as a muniment of title. Compare, §§ 152 and 89, Prob. C.
2.Family Settlement. If the executor wants to continue administering an estate over which there is no dispute, the solution may be a family settlement. The heirs, devisees, and legatees of a deceased person have a right to partition all or part of the decedent's estate without the aid of a judicial decree. Lynch v. Baxter, 4 Tex. 431 (1849); Curtis v. Aycock, 179 S.W.2d 843 (Tex. Civ. App.-- Waco 1944, writ ref'd w.o.m.). Texas strongly favors this right. Stringfellow v. Early, 40 S.W. 871 (Tex. Civ. App. 1897); Robbins v. Simmons Estate, 252 S.W.2d 970 (Tex. Civ. App. -- Galveston 1952, writ ref'd n.r.e.). Subject to the rights of creditors, the heirs of a deceased person may partition the decedent's estate, even where an administration is pending. Wade v. Wade, 167 S.W.2d 1008 (Tex.Sup. 1943). A person named as independent executor has no standing to object to such a settlement, absent some direct interest in the estate. Re Estate of Hodges, 725 S.W.2d 265 (Tex. App.--Amarillo 1986, writ ref'd, n.r.e.).
The general rule favoring family settlements is subject to significant limits in addition to the general limits on withdrawing estates from administration by bonding out the estate, as discussed below. The interests in the estate may be conveyed in the same manner as property acquired by purchase, but only to the extent of the heir's interest therein. Trevino v. Turcotte, 564 S.W.2d 682 (Tex.Sup. 1978); Miers & Rose v. Trevino, 213 S.W. 715 (Tex. Civ. App.--San Antonio 1919, writ ref'd). A purchaser from an heir takes the property subject to existing liens, encumbrances, and debts of the estate, McDonald v. Galt, 173 S.W.2d 962 (Tex. Civ. App.--Fort Worth 1943, writ ref'd w.o.m.). Even after property has been sold or assigned, it remains subject to sale by the court for the payment of debts. Littlefield v. Ungren, 206 S.W.2d 152 (Tex. Civ. App.-- Eastland 1947, writ ref'd, n.r.e.); Word v. Colley, 173 S.W. 629 (Tex. Civ. App.--Galveston 1914, writ ref'd); Morris v. Halbert, 36 Tex. 19 (1871); § 266, Prob. C.
Under the principle that an heir can transfer no greater interest than he acquires, it has been held that an heir who is not a party to a voluntary partition of an estate, or a minor during his minority, is not bound by the agreement. Rutherford v. Stamper, 60 Tex. 447 (1883); Clark v. Posey, 329 S.W.2d 516 (Tex. Civ. App.--Austin 1959, writ ref'd n.r.e.). Family settlement agreements are voidable, like other contracts, for those infirmities that vitiate generally. Middleton v. Pipkin, 56 S.W. 240 (Tex. Civ. App.--1900, no writ); McCombs v. Abrams, 28 S.W.2d 584 (Tex. Civ. App.--Galveston 1930), affirmed, 48 S.W.2d 612 (Comm. 1932).
3.Common-law Suit for Settlement of Estate. As mentioned above, the action at common law, brought for settlement of the estate and for an accounting, is a broad remedy, and this would also be useful in getting the estate out from the control of an undesirable executor or administrator.
4.Bonded Closing. Although Sections 262-269 of the Probate Code may seem to provide a method of removing an estate from administration, the remedy is more illusory than real. A bond in an amount double the gross appraised value of the estate must be posted, conditioned that the surety and obligors will pay the debts then or later due by the estate, including sums due the personal representative. Despite the bond, the creditors retain their lien on the property of the estate, and they may sue either upon the bond or by action against the distributees. There does not seem to be any method provided for terminating the potential liability of the surety on this bond, other than the expiration of the statute of limitations. It would take a very unusual set of circumstances to make this procedure useful. However, there is authority that this is the only method provided to withdraw property from an estate under administration before all debts are paid. Rowe v. Dyess, 213 S.W. 232 (Comm. 1919, opinion adopted); Houston v. Mayes, 13 S.W. 1036 (Tex. Sup. 1890).
5.Receivership. Where there is a pending administration, especially an independent administration, and where it is reasonably necessary to preserve the property of the estate, a court of competent jurisdiction may create a receivership. Tex. Civ. Prac. & Rem. Code, § 64.001; Griggs v. Brewster, 62 S.W.2d 980 (Tex.Sup. 1933); Dunn v. Vinyard, 251 S.W. 1043 (Comm. 1923, judgm't adopted); Metting v. Metting, 431 S.W.2d 906 (Tex. Civ. App.--San Antonio 1968, no writ).
Examples of receiverships granted while an independent administration was pending include the following:
--Where the independent executor refused to account to the beneficiaries, O'Connor v. O'Connor, 320 S.W.2d 384 (Tex. Civ. App.--Dallas 1959, writ dism'd), appeal from remand on separate issue, 337 S.W.2d 829 (Tex. Civ. App.--Texarkana 1960, no writ);
--Where there was a dispute about whether the executor mismanaged the estate and whether the estate was ready for distribution, Hake v. Dilworth, 96 S.W.2d 121 (Tex. Civ. App.--Waco 1936, writ dism'd); Griggs v. Brewster, 62 S.W.2d 980 (Tex.Sup. 1933);
-- Where there was an impasse between the independent executors and the will required them to act jointly, Blalock v. Blalock, 424 S.W.2d 646 (Tex. Civ. App.--Texarkana 1968, no writ).
Although it must be shown that the party seeking the receivership has an interest or a probable interest in the property, that the property is in danger of being lost or removed, and that the applicant has no other adequate remedy at law, it has been held that the bonding procedure mentioned above is not an adequate remedy. See Blalock v. Blalock, supra, and Metting v. Metting, supra.
6.Partition and Distribution Upon Petition. If the estate involved is not an independent administration, the beneficiaries can use the provisions found at Sections 373-387 of the Probate Code to force a full or partial distribution and a partition, if necessary. Any of the heirs, devisees, or legatees may initiate this procedure by written request filed after the inventory has been filed and approved, if only a distribution is desired, or when twelve months have expired from the original grant of letters testamentary or of administration, if both partition and distribution are requested. § 373, Prob. C. At the hearing on the application, the court is to determine the existing and probable future debts and expenses, then determine the residue by subtracting these from the entire assets of the estate. The shares of the persons entitled to the estate are to be determined at the same time. § 377, Prob. C. Failure of the personal representative to comply with the court's order leaves him vulnerable to a complaint for the wrongful withholding penalty of 10% per month provided by Section 384, Prob. C.
Section 402, Prob. C., provides a somewhat similar, but redundant, provision allowing the beneficiary of an estate to petition for accountings and distributions. Under this section, any "interested person" may apply for the accounting and distribution, but the action cannot be required until 15 months have expired after the original grant of letters.
VII. THE INSOLVENT OR ILLIQUID ESTATE: DIVIDING THE PIE WHEN EVERYONE IS HUNGRY FOR MORE.
In our hypothetical estate you will remember that John Dowell's business appeared to be having financial problems before he died. Let us now assume that, far from having a large estate, the Decedent was deeply in debt. Merry, the widow, waived appointment as independent executrix and you have appointed the Decedent's eldest son, Angus "Pinche" Dowell, as administrator with will annexed. Merry and her small children want to live in the house, but everyone from the government on down is clamoring for payment. Who gets what, and when?
To determine the answers to this important question, the administrator and the probate judge must sort through at least four sets of issues:
--How does a claimant get in line to be paid and which claimants, if any, don't have to make claims?
--What property of the estate is subject to claims against the Decedent and what property is exempt?
--When are claims to be paid?
--If the assets of the estate are inadequate to satisfy all the provisions of the will, which beneficiaries are preferred and which get nothing?
A. Claims from the Viewpoint of the Creditor.
Considering that the personal representatives of estates are almost always persons or entities closely aligned with the Decedent or his family, it is perhaps not surprising that a cool, even disdainful attitude prevails towards creditors in the trial courts. However, this attitude is not supported by either the case law or the statutes, except as relates to the homestead and family exemptions. From the very qualification of the personal representative to the closing of the estate, Texas has made comprehensive provision for the protection of the rights of the creditor, while preserving the family unit from calamity. With that said, one must admit that the creditor has plentiful opportunity for error in the claims process.
1. Protection of Creditors. The purpose of administration is to satisfy the claims of creditors of the decedent and to distribute the remainder of the estate among the heirs. Administration is for the benefit of all creditors, not just those with secured claims or other claims of high priority. Houston v. Mayes' Estate, 17 S.W. 729 (Tex.Sup. 1886); Palfrey v. Harborth, 158 S.W.2d 326 (Tex. Civ. App.--San Antonio 1942, writ ref'd).
When an administration is opened, the law contemplates that all property liable for payment of debts will be brought into administration and used for the payment of debts as provided by law. Pearce v. Stokes, 291 S.W.2d 309 (Tex.Sup. 1956); § 37, Prob. C.; Sinnott v. Gidney, 322 S.W.2d 507 (Tex.Sup. 1959); § 263, Prob. C. The administrator has custody, management and control of the decedent's estate, subject to directions of the probate court, until debts, expenses, and charges are paid and distribution is made. Littlefield v. Ungren, 206 S.W.2d 152 (Tex. Civ. App.--Eastland 1947, writ ref'd, n.r.e.); Atlantic Ins. Co. v. Fulfs, 417 S.W.2d 302 (Tex. Civ. App.--Fort Worth 1967, writ ref'd, n.r.e.). Unless the estate is closed by following the bonding procedure provided by Sections 263 et seq of the Probate Code, an estate must be kept open while any debts remain unpaid and until it has been fully settled. Rowe v. Dyess, 213 S.W. 232 (Comm. 1919, opinion adopted); Houston v. Mayes, 13 S.W. 1036 (Tex.Sup. 1890).
The priority of a creditor is low as a potential administrator, but a creditor is ranked ahead of strangers, while falling after heirs and kindred of the decedent, in the list of persons qualified to serve. § 77(f), Prob. C.
2. Notices to Creditors. The Probate Code requires specific duties of the personal representative of the estate as respects creditors. Within one month after receiving letters, the personal representative is to publish a general notice to creditors "requiring all persons having claims against the estate being administered to present the same within the time prescribed by law." § 294(a), Prob. C. This notice is to be published once in a newspaper of general circulation in the county in which the proceedings are pending. § 33(f)(3), Prob. C. Notice at this time is also required to the Comptroller of Public Accounts of Texas if the Decedent remitted or should have remitted taxes administered by the Comptroller. § 294 (a), Prob. C. This latter notice must be made by certified or registered mail.
As to this and the other required notices to creditors, it is not entirely certain whether the independent executor is required to follow the notice provisions. However, it is certainly the better practice to do so.
Within four months after receiving letters, the personal representative is required to give notice by certified or registered mail to each creditor of the decedent having a claim secured by a recorded claim on real estate belonging to the decedent. § 295(a), Prob. C. Note that this section does not require special notice upon all secured creditors -- only to those with debts secured by liens upon real estate belonging to the decedent. However, a new subsection (b) was added to this section in 1991, to require that the personal representative also give notice to each person having an outstanding claim against the estate, if the representative has actual knowledge of the claim.
Proof of service of the notice to general creditors by publication, and of the notice to holders of claims secured by liens on real estate, is required to be filed with the court. §§ 294(b) and 295(d), Prob. C.
3. Presentment of Claims. Presentment of claims, unless suit was already pending against the decedent at the time of his death, is an absolute prerequisite to establishment of the claim. § 314, Prob. C. A court may not render a judgment authorizing payment of a claim that has not been presented to the personal representative. Clements v. Chajkowski, 208 S.W.2d 841 (Tex.Sup. 1948). Indeed, the pendency of a non-independent administration suspends both the power to execute upon a judgment against the decedent and the power to foreclose upon a security interest. Cocke v. Smith, 179 S.W.2d 954 (Tex.Sup. 1944); Pearce v. Stokes, 291 S.W.2d 309 (Tex.Sup. 1956). A foreclosure not made through the claims process in such an estate is void, and the administrator can even recover the value of the use of the property during the period the purchaser had possession. Texas Loan Agency v. Dingee, 75 S.W. 866 (Tex. Civ. App. 1903, writ ref'd); Tiboldi v. Palms, 79 S.W. 23 (Tex.Sup. 1904); American Savings & Loan Ass'n. of Houston v. Jones, 482 S.W.2d 62 (Tex. Civ. App.--Houston [14th Dist.] 1972, writ ref'd n.r.e.).
In presenting claims, the creditor must strictly follow the provisions of the Probate Code, although the administrator may waive defects that are not fundamental. The Probate Code is unequivocal:
"...[N]o personal representative of a decedent's estate or of the estate of a ward shall allow, and the court shall not approve, a claim for money against such estate, unless such claim be supported by an affidavit that the claim is just and that all legal offsets, payments and credits known to the affiant have been allowed. If the claim is not founded upon a legal instrument or account, the affidavit shall also state the facts upon the claim is founded...." (emphasis supplied). § 301, Prob. C.
It has been held that the affidavit is required even if the claim is based upon a judgment rendered against the decedent during his lifetime. Ayers v. Waul, 44 Tex. 549 (1876); Dent v. A. Harris & Co., 255 S.W. 221 (Tex. Civ. App.-- Dallas 1923, no writ). Substantial compliance with the required language is required, or the claim may be treated as a nullity. Boney v. Harris, 557 S.W.2d 376 (Tex. Civ. App.--Houston [1st Dist.] 1977, no writ). The claims that must be presented are only claims for money, and this term has been construed to mean essentially the same thing as liquidated claims "where the amount of the claim is fixed and definite, not contingent and indeterminate, and which are susceptible of verification by affidavit." Hume v. Perry, 136 S.W. 594 (Tex. Civ. App. 1911, writ dism'd). It follows that contingent claims that are not definite in amount, and tort claims, need not be presented. Seay v. Hall, 677 S.W.2d 19 (Tex.Sup. 1984).
The Probate Code specifies the persons authorized to furnish the required authentication of a claim for a corporation or in a representative capacity. § 304, Prob. C. The Probate Code allows the personal representative to waive defects of form unless written objection thereto is filed with the clerk within 30 days after presentment. § 302, Prob. C. At first glance the provision for the administrator to waive non-fundamental defects seems beneficial to the creditor. However, it is actually a trap:
"The failure of a representative of an estate to endorse on, or annex to, a claim presented to him, his allowance or rejection thereof within thirty days after the claim was presented, shall constitute a rejection of the claim...." (emphasis supplied). § 310, Prob. C.
"When a claim or a part thereof has been rejected by the representative, the claimant shall institute suit thereon in the court of original probate jurisdiction in which the estate is pending or in any other court of proper jurisdiction within ninety days after such rejection, or the claim shall be barred." (emphasis supplied). § 313, Prob. C.
As you can see, this is an unusually short limitations period within which to bring suit. Moreover, actual endorsement of allowance is required. Mere oral assurances to the creditor that the claim will be allowed will not avoid the operation of the limitations period. Russell v. Dobbs, 354 S.W.2d 373 (Tex.Sup. 1962).
4. Election of Secured Status. The secured creditor must be especially careful in presenting his claim to be certain that it furnishes the information required for the claim to be classified as the appropriate class of secured claim, or his secured position may be illusory. Section 306, Prob. C., which governs the handling of secured claims, provides that the claimant must specify whether the debt is to be classified as a matured secured claim to be paid in due course of administration, or as a preferred debt and lien against the specific property securing the debt. If classified as the latter, no further claim shall be made against other assets of the estate but the claim shall remain a preferred lien against the security. If the allowed claim is not paid within 12 months from the original grant of letters, the creditor can force a sale of the property and the application of the proceeds to the debt.
A striking illustration of the application of these rules is found in Cessna Finance Corp. v. Morrison, 667 S.W.2d 580 (Tex. App.--Houston [1st Dist.] 1984, no writ). In this case, Cessna failed to specify that the claim was to be treated as a matured, secured debt to be paid in course of administration. The debt was therefore treated as the default category of secured lien -- a preferred debt and lien against specific property. Unfortunately for Cessna, the security was an aircraft which had been lost in the jungles of South America, and Cessna was not allowed to share in the other assets of the estate.
5. Effect of Failure to Present Timely Claim. If a non-secured claimant fails to present his claim within six months, the payment of this late claim is to be postponed until all the claims presented within six months have first been paid in full. The failure of a secured claimant to present his claim within six months does not cause this claim to be postponed. § 298, Prob. C. Similarly, claims for last illness and funeral expenses must be presented within 60 days of the grant of original letters, or they will no longer rank ahead of exempt property and allowances to the widow and children. § 300, Prob. C.
6. Claims in Independent Administrations. The creditor has considerably fewer restrictions under an independent administration than under a dependent administration. The creditor is not required to present his claim to the independent administrator, and may bring suit or foreclose without waiting for the claim to be rejected. Fischer v. Britton, 83 S.W.2d 305 (Tex.Sup. 1935); Bozeman v. Folliott, 556 S.W.2d 608 (Tex. Civ. App.--Corpus Christi 1977, writ ref'd n.r.e.). However, the independent executor has six months from the grant of letters in which to answer a suit for money. Prob. C., § 147. The creditor of an estate administered by an independent executor has the further assistance of Section 148, Prob. C., which allows any creditor, by written complaint, to force the distributees to elect either:
--to execute a bond for the smaller of the creditor's claim or the value of the estate, or
--to convert the estate to a dependent administration.
B. Claims from the Viewpoint of the Administrator and the Probate Judge.
It is often not understood that both the judge and the administrator have an active role in the processing of claims in the non-independent administration.
1. Role of the Probate Judge. It is the judge, not the administrator, who is charged with the sensitive task of classifying and approving claims. Although Section 312(a), Prob. C., permits the court to adjudicate claims in the familiar adversarial setting, other paragraphs of that section clearly expect a more activist role by the court.
Consider the explicit authorization of Section 312(c):
"Although a claim may be properly authenticated and allowed, if the court is not satisfied that it is just, he shall examine the claimant and the personal representative under oath, and hear other evidence necessary to determine the issue. If not then convinced that the claim is just, he shall disallow it."
While the court is authorized to independently reject a claim allowed by the personal representative, the court has no authority to allow a claim that has been rejected by the personal representative. Gibson v. Hale, 57 Tex. 405 (1882); Poole v. Rutherford, 199 S.W.2d 665 (Tex. Civ. App.-- Fort Worth 1947, writ ref'd, n.r.e.); Lopez v. Wallace, 453 S.W.2d 383 (Tex. Civ. App.-- El Paso 1970, no writ); Small v. Small, 434 S.W.2d 940 (Tex. Civ. App.-- Waco 1968, writ ref'd, n.r.e.), later app. 464 S.W.2d 734 (Tex. Civ. App.-- Dallas 1971, writ ref'd, n.r.e.).
Of course, the claims are to be ranked by class, and claims of a lower class are not to be paid until the claims of a higher class have been paid in full. If there are insufficient funds to pay the claims of a given class, they are to be paid pro-rata as the funds become available. § 321, Prob. C.
2. Failure of Executor/Administrator to Act. If the personal representative fails to allow or reject the claim within 30 days, causing it to be considered rejected by law, and if the claim is later established by suit, the costs are to be taxed against the representative individually, or the representative may be removed upon the usual complaint and citation. § 310, Prob. C.
In view of the rather strict rules controlling the approval of claims, the provisions of Section 297, Penalty for Failure to Give Notice, can loom large in an insolvent estate. If the representative fails to give the required notice to creditors or secured creditors, and as a consequence the creditor loses his claim or his priority, the personal representative and his surety are liable for the resulting damages. Tiboldi v. Palms, 78 S.W. 726 (Tex. Civ. App. 1904) aff'd 79 S.W. 23. Even worse, if the personal representative should fail to pay a claim ordered by the court to be paid when funds are available, he and his sureties may be liable for the claim, interest, costs, and damages at the rate of five percent per month on the unpaid claim. § 328, Prob. C.
C. Exempt and Protected Property.
Texas has provided a distinctive system of special protections for the spouse and children of a deceased person. These are the homestead, the exempt property or award in lieu of exempt property, and the family allowance. The awards of these rights are to be made by the judge immediately after approval of the inventory. Since an estate is not subject to the Bankruptcy laws, Bankruptcy Code, § 109, the system of ranking claims and allowing exemptions is uniquely the province of the probate court.
1. Homestead. The Texas Constitution, Art. 16, § 52, guarantees to the surviving spouse or minor children under guardianship the right to use and occupy the homestead during the life of the surviving spouse or so long as the guardian of the minor children of the deceased is permitted by court order to occupy the homestead. This possessory right is exclusive, Cheswick v. Freeman, 287 S.W.2d 171 (Tex.Sup. 1956), and it delays the rights of the other heirs to possession or partition of the homestead. George v. Taylor, 296 S.W.2d 620 (Tex. Civ. App.--Fort Worth 1956, writ ref'd, n.r.e.).
Section 271, Prob. C. extends this homestead right to benefit unmarried children remaining with the family of the deceased, and it also extends the exemption to "all such property of the estate as is exempt from execution or forced sale by the constitution and laws of the state." The only debts with which the homestead may be charged are for purchase money, improvements, and taxes due on the homestead. § 270, Prob. C.
When the order has been entered setting this property aside, the homestead is no longer part of the estate. It is no longer subject to administration, and a purported sale of such property is void. Allen v. Ramey, 226 S.W. 489 (Tex. Civ. App.--Texarkana 1921); Roots v. Robertson, 55 S.W. 308 (Tex.Sup. 1900).
2. Exempt Property or Award in Lieu of Exempt Property. If the estate does not include all or part of the specific articles exempted from execution or forced sale, the court is to make a reasonable allowance in place of the missing exempt property. This award is limited to $10,000 in lieu of a homestead and $1,000 for other exempted property. Prob. C., § 273. If there is not sufficient property or money to make up this award, other property of the estate may be ordered sold to create the necessary funds. Prob. C., § 276.
3. Family Allowance. At this time the court is to fix a family allowance for the support of the surviving spouse and minor children of the deceased. § 286, Prob. C. The amount of the allowance is an amount sufficient for the maintenance of the surviving spouse and minor children for one year for the time of death of the decedent, taking into account the circumstances anticipated to exist during such year and the separate property available to the surviving spouse and children. §§s 287-288, Prob. C.
4. Apportionment of Taxes. Be aware that in 1987 the Legislature added Section 322A to the Probate Code, the general effect of which is to require the payment of a pro-rata share of the estate tax by each person or entity who received a part of the decedent's gross estate as determined for the purpose of estate taxes, unless the decedent's will directs otherwise. Just how the executor is going to go about compelling this payment is not entirely clear. Section 322A has some problems, and it is fairly complex. If you have an estate involving estate taxes and the decedent died on or after September 1, 1987, you may have the chance to make some new law.
D. Order of Payments and Distributions.
The order of payments and distributions is governed by the comprehensive plan of the Probate Code. This plan is of critical importance to the creditors and the court if the assets of the estate are insufficient to pay the costs of administration and the claims against the estate.
Although there are several exceptions, a general rule is that the non-independent executor or administrator will need to make payments after passage of the two-month anniversary of the granting of letters, the six-month anniversary, and the one-year anniversary. The actual classification of claims is governed by Section 322, Prob. C., and the payment is governed by Section 320. The former conflict between the two sections, concerning the amount of first priority funeral expenses that could be allowed, was resolved by the 1987 amendments, and both now set the maximum amount of allowable priority last illness and funeral expenses at $5,000.00.
The following is a reasonably complete, but not exhaustive, pathfinder through the payment timing/priority maze:
1. Funeral expenses and expenses of last sickness not exceeding $5,000.00, if presented within 60 days after original grant of letters. § 320(a)(1), Prob. C. (but see the next paragraph).
2. Claims of the United States of America. 31 U.S.C.A. § 3713. However, under the existing Federal decisions, reasonable expenses of administration and preservation of the estate come ahead of these claims (see discussion under item 5, infra). It is not completely clear whether the family allowance comes ahead of these debts or not. Schwartz v. Commissioner, 560 F.2d 311 (8th Cir. 1977); Federal Reserve Bank of Dallas v. Smylie, 134 S.W.2d 838 (Tex. Civ. App.--Amarillo 1939, no writ). Claims of the United States clearly rank ahead of the expenses of last sickness. Rev. Rul. 80-112. It seems fairly certain that claims made by the U. S. pursuant to commercial lending type activities, such as SBA loans and FHA loans, will not be given special priority under 31 U.S.C.A. § 3713, but will be classed with other creditors of the same class. United States v. Kimbell Foods, Inc., 440 U.S. 715, 99 S.Ct. 1448 (1979).
3. Allowances made to the widow or children. § 320(a)(2), Prob. C. If the allowance includes property subject to a valid, subsisting lien or encumbrance, the lien ranks ahead of the allowance. § 277, Prob. C.
4. Funeral expenses and expenses of last sickness not exceeding a total of $5,000.00, presented within 6 months but not presented within sixty days after the original grant of letters. § 320(a) (1), Prob. C.
5. Expenses of administration, preservation, safe-keeping, and management of the estate. Probate code, §§ 320(a)(3) and 322, Class 2. When these expenses are reasonable, they come ahead of claims of the United States, as they are not "debts." Hammond v. Carthage Sulphite Pulp & Paper Co., 34 F.2d 155 (D.C. N.Y. 1928); U. S. v. Weisburn, 48 F.Supp. 393 (D.C. Penn. 1943).
6. Claims secured by liens, including tax liens, so far as the same can be paid out of the proceeds of the property subject to such lien. Prob. C., § 322, Class 3. This would include governmental agencies in their commercial lending activities, United States v. Kimbell Foods, Inc., supra; United States v. S.K.A. Associates, Inc., 600 F.2d 513 (5th Cir. 1979).
7. Claims for taxes, penalties and interest due to the State of Texas or political subdivisions. Probate code, § 322, Class 4.
8. Claims for the cost of confinement established by the Texas Department of Corrections. Prob. C., § 322, Class 5.
9. Claims for repayment of medical assistance payments made by the state to or for the benefit of the decedent. Prob. C., § 322, Class 6.
10. Funeral expenses and expenses of last sickness that exceeded $5,000.00, and all other claims legally exhibited within six months after the original grant of letters. Prob. C., §§ 320(a)(1), 322 Class 1, and 322 Class 7.
11. All claims legally exhibited after the lapse of six months from the original grant of letters. Prob. C., § 322, Class 8; § 327.
At any time after twelve months have expired after the original grant of letters, the personal representative or a distributee may apply for an order of distribution. There is provision for an application for order of partial distribution at any time after the filing and approval of the inventory. Prob. C., § 373.
No claim for money against the estate is to be allowed after an order for partition and distribution has been made, but the claimant retains his right to proceed against the distributees directly. Prob. C., § 318.
If a non-secured creditor has not been paid within twelve months after the original grant of letters, he can force payment from available funds or force the sale of property to create available funds. Prob. C., § 326.
Unlike the unsecured creditor, the secured creditor who has elected to be classified as a matured, secured claim to be paid in course of administration (§ 306(a)(1)) need not wait the twelve months, but can petition the court for sale of the security and application of the proceeds at any time after the lien has been allowed and approved. Prob. C., §s 338 and 325.
The claim of the secured creditor who has elected to have his claim classified as a preferred debt and lien against specific property is to be paid according to the contract and is to be brought current within 12 months after the original grant of letters. If not brought current, the court is to order the property sold, on application by the lienholder. Prob. C., § 306(d).
What if there is not enough property left to satisfy all the gifts under the will after paying the creditors and setting aside the homestead and exempt property? Who takes and who gets left out? These decisions are governed by the law of abatement of bequests.
Although Texas formerly had no statute directly governing the order of abatement of bequests, the 1987 amendments to the Probate Code furnished us with Section 322B, Abatement of Bequests, and it is no longer necessary to explore the case law to answer most of the questions.
Unless the decedent provides otherwise by will, a decedent's property is liable for debts and expenses of administration in the following order:
1. Property not disposed of by will but passing by intestacy;
2. Personal property of the residuary estate (that is, not made a part of a specific gift under the will);
3. Real property of the residuary estate;
4. General bequests (gifts under the will) of personal property;
5. General devises (gifts under the will) of real property;
6. Specific bequests of personal property;
7. Specific bequests of real property.
This ranking does not change the requirements for payment of a claim classified as a preferred debt and lien against specific property, nor does it affect the statutory plan for apportionment of estate taxes under Section 322A, Prob. C.
VIII. THE WILL CONTEST: WELL BEGUN IS (SOMETIMES) HALF FINISHED.
The Probate Code provisions for transfer of contested matters on the motion of a party or the court virtually insure that the judge of the constitutional county court will not be called upon to try a will contest. This is discussed more fully above under "Transfers and Appeals." However, I believe that a proper response to the advent of the contest may simplify the remainder of the administration.
When a contest arises, decide promptly whether to refer the matter to another court. Will contests tend to be time-consuming to try, with emotions running high and much at stake. This does not fit very well with running the county government. If you decide that the case is better left to the district court to try, enter a prompt order of transfer so that the parties can proceed efficiently in the proper forum. To get the case half prepared and then transfer it, or to endure having one of the parties remove it from your court, is a benefit to no one.
B.. Promptly Appoint a Temporary Administrator.
Section 132, Prob. C., provides for the appointment of a temporary administrator in the event of the contest of a will or the contest of an application for appointment. Note that the appointment of a temporary administrator due to a pending will contest is made only if the will is contested before it has been admitted to probate. If the contest is brought after the will has been admitted to probate, as authorized by Section 93, Prob. C., an independent executor who has already qualified cannot be removed by the probate court under the authority of this section. Corpus Christi Bank & Trust v. Alice Nat. Bank, 444 S.W.2d 632 (Tex.Sup. 1969).
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