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Filipp v. Till, 230 S.W.3d 197 (Tex. App.—Houston [14^th Dist.] 2006, no pet. h.).

Wills

Disclaimer

Beneficiary filed a disclaimer about two years after Testator’s death which was well beyond the nine months from date of death requirement imposed under Probate Code § 37A.  This ineffective disclaimer acted as an assignment to the individuals who would have received the property had Beneficiary predeceased Testator.  Accordingly, the alternate beneficiaries named in Testator’s will had a sufficient interest in the property to maintain a cause of action for trespass to try title.

Moral:  A person wanting to disclaim estate property should do so within nine months of the decedent’s death.

Other Estate Planning Matters

Power of Attorney

Trust Creation

Testator’s will devised his farm to Beneficiary.  Testator later named Beneficiary as his agent under a durable power of attorney.  Using that authority, Beneficiary conveyed this farm into a revocable trust with the Testator as the current trustee, Beneficiary as the successor trustee, and Beneficiary as the recipient of the farm upon Testator’s death.  Several months after Testator’s death, Beneficiary (as successor trustee) conveyed the farm to her own trust.  Later, Beneficiary executed a tardy disclaimer which operated as an assignment to the Alternate Beneficiaries of Testator’s will.

Nephew, upset that he was cut out of Testator’s will, filed suit making a claim to the farm.  He was successful in obtaining a default judgment in his favor declaring him to be the owner of the land.  Alternate Beneficiaries brought suit for trespass to try title.  Nephew then claimed that Alternate Beneficiaries lacked standing because the farm was not in Testator’s estate at the time of his death because it had been transferred into a revocable trust.  The trial court agreed that ademption had occurred.

The appellate court reversed.  The court held that the trust to which the farm was conveyed was void.  A durable power of attorney does not allow the agent to create a trust and then transfer property to it because an agent acting under a power of attorney cannot have the trust intent which is necessary to create a trust under Trust Code § 112.002.  It is not enough that the agent (Beneficiary) have trust intent, the settlor himself (Testator) must manifest trust intent.  Accordingly, Alternate Beneficiaries could bring an action to establish their right to the farm.

Moral:  An agent lacks the ability to create a “new” trust for the principal because it is necessary for the principal to manifest trust intent.

Note:  If the principal created a trust while competent, Probate Code § 499(6) authorizes the agent to transfer more of the principal’s property to that trust.

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