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