Estate of Johnson, 64 Tex. Sup. Ct. J. 1160 (2021).


Acceptance of Benefits

After accepting benefits under the testator’s will (a mutual fund worth over $143,000), the beneficiary contested the will claiming that the testator either lacked testamentary capacity or was unduly influenced. The beneficiary sought to avoid the long-established rule that a person cannot accept benefits under a will while contesting its validity by showing that the benefits she accepted are less than she would receive by intestacy (over $450,000) if the will contest succeeded. The trial court rejected this argument and dismissed her contest for lack of standing. She successfully appealed to the Dallas Court of Appeals.

The Supreme Court of Texas reversed and dismissed her lawsuit. The court held “that a contestant does not defeat an acceptance-of-benefits defense by showing that the benefit she accepted is worth less than a hypothetical recovery should her will contest prevail.” Id. at *1. “Equity does not permit the beneficiary of a will to grasp benefits under the will with one hand while attempting to nullify it with the other.” Id. at *3. The beneficiary had no legal entitlement to the mutual fund she accepted other than as being the beneficiary of the testator’s specific gift of the mutual fund. The situation would be different if she had an independent right to the fund such as being named as the fund’s pay on death beneficiary.

Moral:  Before a beneficiary accepts property left to the beneficiary under a will, the beneficiary must make certain the beneficiary does not desire to contest the will in hopes of receiving a larger share via intestacy. The court recognized that the beneficiary’s acceptance of benefits must be voluntary so that “an opportunistic executor [cannot] offensively deny a would-be will contestant’s claim by partially distributing the estate to an unwitting beneficiary to avoid a will contest.” Id. at *7.