Estate of Sloan, 496 S.W.3d 299 (Tex. App.—Fort Worth 2016, pet. denied).
Husband and Wife established a homestead on
property that was Wife’s separate property. Upon Wife’s death, Husband
was appointed as the independent executor of Wife’s will which gave him
the right to purchase property in Wife’s estate at fair market value
which he later did by conveying his interest in $222,000 of property in
Wife’s estate. After Husband’s death, an attempt was made to show the
Husband had violated his fiduciary duty by purchasing the property for
less than its fair market value. The trial court agreed finding that
Husband’s homestead interest had no effect on the fair market value of
the property.
On appeal, the court reversed. The explained that
Husband’s right as a surviving spouse to occupy the homestead for the
rest of his life (unless he abandons the property) under Tex. Const.
art. XVI, § 52, reduces the amount a willing seller would pay for the
remainder interest “left over” after the Husband’s homestead right which
is akin to a life estate.
Note that the court did not need to determine the
amount of the decrease in value because the parties agreed that if
Husband’s homestead right lowered the value of the property, then
Husband’s estate was not liable.
Moral: A surviving spouse’s homestead right reduces the fair market value of the homestead property