Ferguson v. Ferguson, 111 S.W.3d 589 (Tex. App.—Fort Worth 2003, pet. denied).
Husband devised to Wife the marital home which was Husband’s separate
property. Controversy arose regarding the classification of other assets
as Husband’s community property or separate property. The parties
reached a settlement in which Wife received a sum of money in exchange
for giving up all other claims against Husband’s estate. Thereafter, the
executor demanded that Wife leave the marital home asserting that she
had agreed to relinquish all claims to Husband’s property. The trial
court found that the settlement agreement covered the marital home and
ordered Wife to vacate.
The appellate court carefully reviewed the settlement agreement and held
as a matter of law that the agreement did not impact the devise of the
marital home to Wife, especially since there had never been any prior
controversy regarding Wife’s ownership of the home under the terms of
the will. In dicta, the court indicated that even if the marital home
had been covered by the agreement, Wife would still have her
constitutional and statutory homestead rights to use and occupy the
property because there was no evidence that she intended to waive those
rights.
Moral: Settlement agreements need to be properly structured and
reviewed. The agreement should be drafted so that it is neither
underinclusive nor overbroad.
Ferguson v. Ferguson, 111 S.W.3d 589 (Tex. App.—Fort Worth 2003, pet. denied).
Testator’s will contained an in terrorem provision. Two beneficiaries
claimed that each other violated the provision when they took various
actions, that is, filing a complaint against the executor’s inventory,
appraisement, and list of claims and filing a petition for a declaratory
judgment. Both the trial and appellate courts held that the actions of
these beneficiaries did not violate the in terrorem clause.
Neither action was intended to challenge Testator’s dispositive plan.
Instead, one action was to ascertain whether the inventory properly
distinguished between Testator’s community and separate property and the
other was to interpret the terms of a settlement agreement.
Moral: In terrorem clauses will not be effective to eliminate all
litigation regarding a testator’s estate. Instead, they are designed to
protect the testator’s disposition plan.