In re Estate of Kappus, 242 S.W.3d 182 (Tex. App.—Tyler 2007),
reversed, Kappus v. Kappus, 284 S.W.3d 831 (2009).

Estate Administration

Removal of Executor

 

Beneficiaries’ Mother (the testator’s ex-wife) moved to have Independent Executor removed from office because he shared ownership of certain estate property with his deceased brother and allegedly had a conflict of interest with the beneficiaries. Mother argued that he could not adequately represent the estate while seeking to retain his own share of the property. The trial court denied the motion and the appellate court reversed.

The court begin its analysis by explaining that great deference is given to the testator’s choice of an independent executor. However, the named executor may be removed for the reasons specified in Probate Code § 149C. In this case, the estate and the executor are in conflict regarding a 4.86% interest in the property because both claim ownership to this property. The court concluded that the existence of this conflict requires the trial court to remove the executor.

Moral: Naming an executor who co-owns property with the testator is problematic should a dispute over the amount each actually owns arises after the testator’s death.

 

Trusts

Creation of Trust

 

The trial court held that a testamentary trust was not created because no steps had been taken to fund the trust. The appellate court reversed. The court explained that the will left the residue of Testator’s estate to a trust, the provisions of which were set forth in the will. Under Probate Code § 37, title to property devised in a will vests immediately in the beneficiaries upon the testator’s death. The will contained nothing which would delay this vesting. Thus, the property vested immediately in the trustee.

Note: The court went on to explain that although the trial court did not reach the issue of removing the trustee from office under Property Code § 113.082, since the trust was actually created, it was an abuse of discretion for the court not to remove the trustee from office for having a conflict of interest (the trustee was personally claiming ownership to a portion of the property claimed by the trust).

Moral: Unless the will provides otherwise, a testamentary trust is created as of the date of the testator’s death.

 

Trusts

Trustee Acceptance

 

The appellate court explained that “[w]hen the same person is named as independent executor and as trustee of a testamentary trust, acceptance of the position of trustee will be presumed from his or her having acted as executor.” Kappus at 191. It appears that the court is engrafting this as either an additional method of acceptance or as coming within the acceptance methods specified in Probate Code § 112.009.

Moral: An executor who is also named as the trustee of a testamentary trust must take clear action to reject the trusteeship if the executor does not wish to serve in that capacity.



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