In Texas, when a person who leaves a will passes away, the decedent’s estate vests immediately in the devisees under the will, subject to payment of the decedent’s debts. But what are the rights of the surviving spouse in his or her community property interest in the decedent’s property? This issue was recently addressed by a recent El Paso Court of Appeals decision. ( See Matter of Estate of Abraham, 583 S.W.3d 374, 377 (Tex. App.—El Paso 2019, no pet. h.).
In this case, the surviving spouse, Margaret, executed a deed assigning all of her interest in community real property that had been acquired by her deceased husband (the “Decedent”). This assignment was made after the Decedent’s date of death and after the Decedent’s Will making Margaret the sole beneficiary of the estate had been admitted to probate. However, there was a lien against the property, at the time of the assignment, for a debt that had been incurred by the Decedent, and the creditor made a claim against the estate. Margaret did not seek the probate court’s permission to make the assignment.
As a result, the Administrator of the estate filed a lawsuit against Margaret in the probate proceedings to set aside the deed executed by Margaret. The probate court granted the Administrator’s motion for summary judgment and set aside the deed. The decision was affirmed on appeal.
In upholding the probate court’s decision, the El Paso Court of appeals stated, at p. 377:
When a person dies leaving a lawful will, “all of the person’s estate that is devised by the will vests immediately in the devisees[.]” Tex.Est.Code Ann. § 101.001(a)(1). At same time, the decedent’s estate vests subject to the payment of the debts of the decedent, unless those debts are otherwise exempted by law. Id. at § 101.051(a)(1). And more specifically, the community property that was under the deceased spouse’s sole or joint management during the marriage continues to be subject to the debts of that spouse upon his or her death. Id. at § 101.052(a); see also Tex.Fam.Code Ann. § 3.202(c)(“The community property subject to a spouse’s sole or joint management, control, and disposition is subject to the liabilities incurred by the spouse before or during marriage.”).
The Court then explained that the Texas Estates Code establishes procedures for earlier distributions of assets to the estate beneficiaries in a manner that affords protection to the estate creditors. For example, a beneficiary under the will may submit an application to the court for a partial distribution of the estate after the inventory is filed by the Administrator and approved by the court. Further, under the Texas Estates Code, a surviving spouse can obtain legal title to his or her share of community estate property by applying with the court to partition the community property and following the other applicable statutory requirements. Once again this can only be filed after the filing and approval of the inventory. Id at p. 378.
The Court of Appeals found that Margaret did not follow any of these procedures. Thus, the deed executed by Margaret after Decedent’s date of death was void and the Court of Appeals upheld the lower court’s decision to set the deed aside.