When a will is not being contested but there is a disagreement of how the will should be construed, a person has four years before action needs to be taken.
In a large estate, a handwritten will gave a ranch to the decedent's third cousin. This provision incurred a large tax. The will had a provision that all taxes were to be paid out of the residuary bequest. The residuary bequest is that part of a will that says something like "I give everything else to ..." The residuary beneficiaries under the will were a museum and a university. When the beneficiary who received the ranch asked the residuary beneficiaries to pay the taxes on the ranch transfer, they refused. A long court battle ensued. Eventually, the Courts determined that the third cousin and not the residuary beneficiaries were responsible for the tax based on the language in the IRS Code.
The Appeals Court added a footnote that they weren't deciding the issue of whether or not the third cousin was entitled to reimbursement from the residuary beneficiaries under Texas law based on the will but just what the Federal Tax Code required. Using this footnote, the third cousin filed a declaratory judgment action under Texas law seeking to get reimbursed by the residuary beneficiaries based on the provision in the will that said all taxes were to be paid out of the residuary clause. The Court noted that it had been more than four years since the dispute was known to the third cousin and that his claim was too late. They upheld the Statute of Limitations claim raised by the residuary beneficiaries. The first court case lasted so long that limitation had run on the Texas suit. Both claims probably should have been brought as alternative claims in the first suit. 362 /3 134.
Copyright by Robert Ray a Texas inheritance attorney.
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