A Gift of “Personal Property” Means all but Real Estate

A will left some specific items to individuals, left “all household and personal property” to Vargas then left a residuary clause. The estate consisted of about $290,00 in bank accounts, stocks, cars and household furnishings.

Vargas contended that she received everything except the specific gifts and that the only thing that passed by the residuary clause was some real estate.

Problem

Was the gift of “all my remaining household and personal property” limited by the term household? Or did it include all money as well?

Answer:

 In a will, an unqualified reference to “property” encompasses everything of exchangeable value that the testator owned, including real and personal property whether tangible or intangible.

“Personal property,” in contrast, excludes real property but otherwise remains broad in definition, including everything other than real property that is subject to ownership.

We reject Mitchell and Vasquez’s argument that Hunt’s combined bequest of household and personal property limits the latter category to tangible items. Hunt bequeathed “all of my remaining household and personal property” to Vargas. Mitchell and Vasquez’s proposed interpretation disregards Hunt’s use of the word “all,” which is incompatible with the limited conveyance of a subset of her personal property. 

“all personal property” means all, tangible and intangible.

In re Estate of Debra A. Hunt, 01-19-00216-CV, (Tex. App. – Houston[1st] Feb. 6, 2020 no pet. h.).

Ruling

  Hunt’s bequest of “all of my remaining household and personal property” is unambiguous—it conveys to Vargas all of Hunt’s personal property other than the family-related items that she gave to Mitchell.

Definition of Community Property in Texas

Definition of Community Property in Texas

Texas is a community property state. 

The word community in community property refers to the marital community; the marriage between you and your spouse.  If you are not married, you do not have any community property.  You only have separate property.

Community property is all property acquired during the marriage except property acquired by inheritance or by gift.  Community property does not include property that you owned before the marriage or property that you acquire during the marriage by inheritance or by gift.

All property is presumed to be community property.  If someone claims that certain property is their separate property, they have the burden of proof to prove that it is separate and not community.  If they don’t meet that burden, the property is community property no matter how or when it was acquired.  Proving real estate is separate property is easy.  Proving that money is separate property is not as easy.

Contested probate issues involving community property include but are not limited to: how and when property was acquired;  whether income from separate property is community property; whether separate property has been so comingled with community property that it has become community property; and, whether community funds have been used to increase the value of separate property to such an extent that the community is entitled to be reimbursed.

Mineral Interests Overview In Texas

Mineral Interests Overview In Texas

In Texas, when you own mineral interest, you lease that interest in exchange for receiving royalty payments based on how much of the minerals are extracted. Mineral interest or royalty interest are often involved in inheritance disputes like contesting a will. This article gives a brief description of mineral or royalty interest in Texas. 

Every fact situation is different and you should not take, or refrain from taking, any action based on what you read. You should talk to your attorney about your situation to understand what your rights are.

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In Texas, an instrument conveying land transfers both the surface estate and all minerals and mineral rights, unless the instrument contains a reservation or expresses a contrary intention. In many cases, a person will sell land but will reserve the minerals. That creates two estates, the surface and the mineral estate. I have written about that…

Learn about oil & gas inheritance laws in Texas

The mineral estate is comprised of five severable rights: “1) the right to develop, 2) the right to lease, 3) the right to receive bonus payments, 4) the right to receive delay rentals, and 5) the right to receive royalty payments.”

The holder of the leasing privilege is the executive-interest holder. The executive enjoys the exclusive right to make and amend mineral leases and, correspondingly, to negotiate for the payment of bonuses, delay rentals, and royalties, subject to a duty of utmost good faith and fair dealing to non-executive interest holders. In Texas, a typical oil and gas lease actually conveys the mineral estate with the possibility that the mineral estate will revert to the owner if the oil company stops producing.

A royalty interest is a nonpossessory interest in minerals. A party possessing a royalty interest that does not include the right to lease the mineral estate, receive delay rentals, or bonus payments is referred to as a non-participating royalty-interest holder. I have written about non-participating interest here.

This article is based on a 2015 decision of the Supreme Court of Texas in a case dealing with the very complicated issue of “fractional royalty interest” versus “fraction of royalty interest.” Hysaw v. Dawkins.

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Robert Ray is the Editor and owner of this site. Board Certified, Personal Injury Trial Law — Texas Board of Legal Specialization. We handle cases throughout Texas. Our principal office is in Lantana, Texas (DFW area).
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Definition of Community Property in Texas

Kind of Texas Property that is Inherited if You Die Intestate.

Inherited Property

What property is inherited by your heirs in Texas if you die intestate (without a will or with a will that has been set aside because of a suit contesting the will) depends on what kind of property you have at your death. There are two kinds of property that are relevant to probate: probate property and non probate property. Non probate property includes joint accounts with right of survivorship, life insurance policies, retirement funds, IRA’s, and any other account where you designate a beneficiary when you create the account. When you die, if you did not name your estate as the beneficiary, the property does not go to your estate to be distributed to your heirs, rather, it goes to the beneficiary or beneficiaries that you designated when you created the account.

Probate property is further designated as community property or separate property.  You can find a discussion of these terms on this site under the Glossary by clicking on the words. You only have community property if you are married at the time of your death. If you are not married, are divorced or are a widow or widower when you die, all of your property is separate property.

Married – separate or community property

Separate Property 

  • If no children – all personal property to spouse; one half of real property to spouse, balance to parents.  If no parents living and no brothers or sisters or their descendants living, all to spouse.
  • If children – one third of personal property to spouse, balance to children.  Spouse has a one third life estate in real property, balance to children who also get spouse’s share once he/she dies.

Community Property 

  • If there are children –
    • If all children of the deceased person are children of surviving spouse – all to spouse.
    • If some children of the deceased person are not also children of surviving spouse, all of decedent’s one half of the community will go to the children.
  • If there are no children or descendants of the deceased – all to surviving spouse.

Not Married – only separate property

With children –

  • All to children.

No children –

  • To parents if they survive.
    • If there is one surviving parent and no siblings or descendants of siblings, all to surviving parent.
    • If there is one surviving parent and some surviving siblings, one-half to parent, siblings divide balance.
    • If there is no surviving parent but some surviving siblings, each sibling, or their descendants if they did not survive, is entitled to a share of the estate based on the number of siblings.

Do not take, or refrain from taking, any action based on what you read. You need to discuss your situation with your attorney who can advise you based on your facts.

If you have a question about a pending or anticipated lawsuit about contesting a will in Texas, use the Contact Us page at the top of the site to see if we can help.

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Note: When the intestate’s children, descendants, brothers, sisters, uncles, aunts, or any other relatives of the deceased standing in the first or same degree alone come into the distribution upon intestacy, they shall take per capita, namely: by persons; and, when a part of them being dead and a part living, the descendants of those dead shall have right to distribution upon intestacy, such descendants shall inherit only such portion of said property as the parent through whom they inherit would be entitled to if alive (i.e. per stirpes or by the root and not per capita.) Estates Code §201.101.

Example: An intestate dies who was never married and who had no children. His parents predecease him. He had three siblings. Sibling A has one child and survives the intestate. Sibling B has two children but predeceases the intestate. Sibling C has three children and also predeceases the intestate. The estate is divided per stirpes and not per capita. The intestate‘s property is divided into three parts. The surviving sibling A gets one third; the two children of sibling B share one third and the three children of sibling C share one third.

Example: An intestate dies who was never married and who had no children. His parents predecease him. He had three siblings. Sibling A has one child. Sibling B has two children. Sibling C has three children. All of the siblings predecease the intestate. The estate is divided per capita and not per stirpes. The estate is divided into six shares and each of the surviving nieces and nephews receive one sixth.

Gift Deeds in Texas

Gift Deeds in Texas

Gift Deeds in Texas

Gift deeds are valid in Texas but there are requirements above and beyond what is required of a normal deed. A gift deed is a document that transfers title to land. It can be informal but the intent of the grantor must be to immediately divest himself of the property where he no longer has control over the land.

Deeds in Texas?

To be a valid deed, the document must be (1) in writing, (2) signed, (3) describe the property, and (4) delivered. TPC §5.021.

Gift deeds in Texas?

To be valid, gift deeds in Texas further require the document set forth (1) the intent of the grantor, (2) the delivery of the property to the grantee, and (3) the gift to be accepted by the grantee. The one claiming the gift bears the burden to establish each of the elements. All dominion and control over the property must be released by the owner. Delivery is required, but it need not be actual or immediate. If the grantor intended for the title to pass immediately upon execution and acknowledgment, there is a valid constructive delivery.

What you should know

You should be familiar with Texas inheritance laws that you can review here.

You also might want to know what types of property are involved in probate which you can see here.

Gift deeds in Texas are valid; however, there are strict requirements for gift deeds in Texas that have to be met. If you have a document that might be a gift deed or if someone is claiming they have a gift deed to a property that should be yours, you should contact an attorney as soon as possible.

A recent case

In 2016, the San Antonio court of appeals was asked to decide if a document was a gift deed. The document was titled “March 11, 2005, Will” of two people who owned the property in question and was signed by them. The document said “we agree that the house be evenly owned by” the grandchildren. The court ruled that the key issue turns on the intent of the donor when the document was executed. A gift is a voluntary transfer of property to another made gratuitously and without consideration. Establishing donative intent requires “evidence that the donor intended an immediate and unconditional divestiture of his or her ownership interests and an immediate and unconditional vesting of such interests in the donee.” Until the donor has absolutely and irrevocably divested herself of the title, dominion, and control of the subject of the gift, she has the power to revoke the gift. Here, the conveyance in the “March 11, 2005 Will” lacks present donative intent. The document provides “[w]e agree that the house be evenly owned by (grandchildren)” and the document’s title as a will clearly implies the donor’s intent to transfer ownership of the property to the (grandchildren) upon the testators’ deaths. The transfer did not provide for an immediate and unconditional divestment of the donors’ interests. By its very nature, the “March 11, 2005 Will” does not “absolutely and irrevocably divest” the owners of “title, dominion, and control of” the property. The court reversed the trial court who had ruled that the document was a gift deed. 04-14-00609-CV.

Another problem with gift deeds in Texas was highlighted by the 2018 case 04-17-00132-CV.  A gift deed is the separate property of the person to whom the deed was given. The deed will usually recite the consideration as “love and affection.” A non gift deed will usually recite the consideration as “$10 and other good and valuable consideration” and would be classified as community property.” In the case, the deed was from family members to other family members but it recited the consideration as “for and in consideration of the sum of Ten and no/100 ($10.00) Dollars.” A party to the suit who was the beneficiary of the separate property of one of the grantees claimed that the deeds were actually gift deeds instead of deeds being purchased. She even had one of the family members who was the grantor testify that they were gift deeds not purchased deeds. If they were gift deeds, she would inherit the land. If they were purchased deeds, she would not inherit the land. The court ruled that because the deeds were not ambiguous and recited that they were sold for $10, no testimony would be allowed which would contradict what the deed said. So, they were not gift deeds.

Learn about Joint Accounts and Inheritance in Texas

In Texas, joint accounts are accounts, usually with a financial institution, where more than one person has rights to the account.  Deciding what those rights are is a problem often faced in contested probate cases. Are they survivorship accounts where the survivor gets all of the account and the money does not got through a will or probate? Or, are they non-survivorship accounts where the money does not go to the survivor but passes through the will and through probate?

Accounts with community property owned by both spouses are treated differently than accounts between non-spouses (See below.)

The courts look at the documents creating the account and the words used to determine the type of account involved.  Often, the financial institution will use a pre-printed form that has boxes to check.  The card will be filled out correctly but no box will be checked!  Or two conflicting boxes will be checked!  Since all accounts are presumed to be non-survivorship accounts, the burden of proof is on the person claiming that the account is a survivorship account to prove that it is.  If the boxes on the signature card are not checked, too many boxes are checked or as one jury found, checked later by someone not the owner of the account, then the account is not a survivor account and the money goes through probate.  The account would pass through the owner’s will or through his estate. However, the courts are more likely to find that two spouses intended to create joint accounts with right of survivorship than the are likely to find that two non-spouses intended to create such accounts. In other words, the burden of proof on non-spousal accounts is higher than it is on spousal accounts.

Joint accounts can cause difficulties.  The difficulties relate to the type of joint account in question.  There are three basic joint accounts:

  1. convenience accounts – where one or more persons own the account but other, non-owners, are allowed to make withdrawals  On the death of the owner, the account passes through his will or through his probate estate and does not pass to the non-owner;
  2. tenants in common – where two are more persons own the account equally – when one owner dies, his share passes through his will or through his probate estate and does not pass to the other owner; and
  3. joint accounts – with or without the right of survivorship.
  • with right of survivorship means that when one of the joint owners dies, the account belongs to the survivor and does not pass through the deceased’s will or through his probate estate.
  • without right of survivorship means that the account is owned by the joint owners and when one dies, his share passes through his will or through his probate estate and does not pass to the other owner.

An example of the difficulty with joint accounts are the following cases:

  1. One case held that there was no right of survivorship even though the signature card said ” Joint accounts – with survivorship” since the language did not match that required by statute to create a survivorship account;
  2. Another case held that there was no right of survivorship because no box had been checked;
  3. Signature card said “Type of customer – joint with survivorship” held not a survivorship account; and,
  4. “Joint account – payable to either or survivor” was not a survivorship account.

As shown by the cases cited above, accounts with a substantial amount of money in them need to be scrutinized carefully to determine what type of account they are and who, therefore, owns the account.

On my blog, I wrote about a daughter who took over her parents bank account when they added her to the signature card. The father had to sue the daughter over the ownership of the account. You can read the outcome of that case on our blog here.

Note: On June 25, 2009 in Holmes v. Beatty, No. 07-0784, the Texas Supreme Court reversed some of the holdings listed above as they relate to community property between spouses. The Court held it was easier for spouses to create joint accounts with right of survivorship if they used terms like JT TEN, or designated the account as a joint account. The Court said that the difference between a joint account and other accounts is the right of survivorship. Since the husband and wife signed documents that indicated the account was a joint account, it had a right of survivorship. The account went to the survivor rather than through the wills of the husband and wife.

Note: Effective September 1, 2011, the legislature amended the Probate Code with the express purpose of overruling Holmes v. Beatty which is cited below. The changes in the Probate Code should return the law to what is set out above.

Note: In 2011 a Texas Appeals Court held that personal accounts located in Texas were governed by Michigan law based on the facts of the case. In Michigan, unlike in Texas, joint accounts are presumed survivorship accounts even if they do not say they are. Since the documents creating the account were executed in Michigan and subject to Michigan law, they were survivorship accounts even though they would not be if governed by Texas law. This case shows again the necessity of reviewing the documents creating the accounts to determine if they are survivorship accounts. 335 S.W.3d 282. (The legislature passed a law that has the effect of overruling this case. Now, if more than 50% of the nonprobate asset is contributed by a Texas resident, then Texas law will be applied).

Note: 2017. Joint accounts continue to be the focus of lawsuits especially where the original owner of the account is elderly. In a 2017 case, No. 12-17-00062-CV, the appeals court said “In essence, the requirements for the creation of a right of survivorship to a joint account are: 1) a written agreement, 2) signed by the decedent, 3) which specifies that his interest “survives” to the other party.” The court found that part 1 and 2 had been met but part 3 had not been met even thought the account purported to be a joint account. “The only evidence purporting to create a survivorship account is the signature card. On it, in a section labeled “OWNERSHIP OF ACCOUNT — CONSUMER,” the account holder is directed to place his initials next to the account selected. This instruction is followed by a notice that “THE TYPE OF ACCOUNT YOU SELECT MAY DETERMINE HOW PROPERTY PASSES ON YOUR DEATH. YOUR WILL MAY NOT CONTROL THE DISPOSITION OF FUNDS HELD IN SOME OF THE FOLLOWING ACCOUNTS.” Nine options are presented, each with a box next to it to be marked to indicate the choice. The box next to “MULTIPLE-PARTY ACCOUNT WITH RIGHT OF SURVIVORSHIP” is marked with an X, and the initials LDH and LWH are on the blank next to that box. The card is signed by all three account holders.” According to the court, this was insufficient to create a joint account with right of survivorship in Texas.

Note: In a 2019 case, a niece began taking care of her uncle towards the end of his life. She had him add her to his banking accounts and made the accounts joint accounts with the right of survivorship. When the uncle died, she went to another town to a branch of the bank where the uncle had never done business and withdrew all the money. Meanwhile, the court had appointed and administrator over the estate. When the administrator found out about the funds, she sought a temporary injunction against the niece ordering her to return the money. The trial court imposed an injunction against the niece after he heard evidence. The injunction required the niece to return the money to the estate. It would be determined later who would receive the money but for safekeeping pending the case, the funds had to be returned. 12-18-00206-CV

Your Privacy

We take your privacy very seriously. We are keenly aware of the trust you place in us and our responsibility to protect your privacy. We treat all information provided to us with care and discretion.

Robert Ray is Board Certified

Robert Ray is the Editor and owner of this site. Board Certified, Personal Injury Trial Law — Texas Board of Legal Specialization.

We handle cases throughout Texas. Our principal office is in Lantana, Texas (DFW area).

Robert Ray Texas Inheritance

Click here to email us or to go to the contact form if you want to contact us about a Texas inheritance dispute.

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