Sklar v. Sklar, 598 S.W.3d 810 (Tex. App.—Houston [14th Dist.] 2020, no pet. h.).

Wills

Specific Gifts

Testatrix specifically bequeathed a car and shares in a mutual fund to Sister. Instead of distributing these assets to Sister, Independent Executors sold the property without consulting Sister exercising the authority Testatrix gave them to sell any portion of the estate in any manner that they deemed best provided they give “due regard” for her specific bequests. Sister sued Executors alleging breach of fiduciary duties by selling the property, selling the car for too low of a price, and asking her to sign a release after Executors repurchased the mutual funds shares and offered them to Sister. The trial court rejected Sister’s claims and she appealed.

 

The appellate court affirmed. The court recognized that Executors owed fiduciary duties to Sister. However, Sister’s claim for breach of those duties failed because Sister did not “conclusively demonstrate that she was injured” by the alleged breach of duty. Thus, it was irrelevant whether selling the two specific bequests was or was not a breach of fiduciary duties. The court reviewed the evidence which showed that the proceeds of the assets sales were their fair market value and thus Sister could not show damage because of the alleged breach.

 

The appellate court also rejected Sister’s argument that Testatrix’s requirement that “due regard” be given to specific bequests precluded Executors from selling the property. The trial court found that Executors sold the car after “weighing factors such as age, condition, repairs, storage, insurance and other costs” and sold the mutual fund shares “to secure gains and avoid market fluctuations.” The appellate agreed that this evidence was sufficient to show that Executors gave due regard to Testatrix’s specific bequests.

 

Moral:  A testator whose intent is for a beneficiary to receive a specific gift such as an heirloom or family home must make certain that any authority to sell granted to the executor be expressly limited so that these assets are sold only as a last resort to pay creditors.

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