Matter of Estate of Abraham, 583 S.W.3d 374 (Tex. App.—El Paso 2019, pet. filed).

Estate Administration

Community Property Transfer by Surviving Spouse

Decedent used a parcel of community property as collateral for a loan. Decedent died before repaying the loan and thus the creditor filed a claim in the probate proceeding for the unpaid balance of the loan. Four months after Decedent’s death, his son filed a deed which purported to transfer this property from Decedent to him. Decedent signed the deed but it was not notarized until after Decedent’s death. Two years later, Decedent’s surviving spouse and sole beneficiary deeded her interest in this property to the son contingent on him paying the creditor’s claim but without reference to the other debts of the estate. Decedent’s spouse did not seek the court’s permission to execute the deed nor did she post a bond. The administrator sought to set aside this deed because the court did not grant permission, there was no partition order, and no bond posted. The probate court agreed and Decedent’s spouse appealed.


The appellate court affirmed. The court explained that although title to the property immediately vested in the spouse upon Decedent’s death under Estates Code § 101.001, it remains subject to Decedent’s non-exempt debts. In addition, once a personal representative is appointed, the personal representative has a superior right to possession of all estate property under Estates Code § 101.003. The court described methods for a beneficiary to obtain property during the administration of an estate as well as for a spouse to get title to his or her share of a community property asset under Estates Code § 360.253. The spouse did not follow any of these procedures but claims that the community property procedure in Estates Code § 360.253 is optional. The court explained that the procedure is optional in the sense that the surviving spouse could wait until the administration of the estate is complete to transfer the property and not need to comply with this section. However, if the spouse wants to transfer the property prior to the conclusion of the administration, the formal procedure of partition and posting a bond is necessary to protect estate creditors. Otherwise, the spouse could transfer the asset and shield it from estate creditors.


Moral:  A surviving spouse wishing to transfer a community asset prior to the conclusion of the administration must follow the procedures under Estates Code § 360.253 to protect the rights of the deceased spouse’s creditors.