Family Settlement Agreements

In re Estate of Halbert, 172 S.W.3d 194 (Tex. App.—Texarkana 2005, pet. denied).


Testatrix died leaving behind three instruments with disparate distribution schemes that could be deemed to be her last will. A dispute arose as to which of these documents should be probated as her will. The beneficiaries of all of the potential wills signed a mediated settlement agreement. Later, however, one of the beneficiaries disputed the validity of the settlement agreement and sought to have it declared unenforceable. The trial court held that the agreement was valid.

The appellate court reversed. The court explained that the agreement not to probate Testatrix’s will did not contain an alternative distribution scheme and thus was unenforceable. The court recognized that “[a] family settlement agreement is an alternative method of administration in Texas that is a favorite of the law.” Halbert at 199. However, an agreement not to probate a will must be accompanied by an agreement stating how the decedent’s property is to be distributed. See In re Estate of Morris, 577 S.W.2d 748 (Tex. App.—Amarillo 1979, writ ref’d n.r.e.). The court examined the settlement agreement and found that it contained neither an express nor implied distribution scheme such as to probate one of the three wills or to have Testatrix’s estate pass by intestacy.

Moral: To be enforceable, a family settlement agreement must explain how the decedent’s estate is to be distributed.