PROBATE, GUARDIANSHIP & TRUSTS STATUTES OF

PROBATE, GUARDIANSHIP & TRUSTS

STATUTES OF LIMITATIONS ISSUES

b y

Jerry Frank Jones

and

Laurie Ratliff

2010 Advanced Estate Planning & Probate Course

State Bar of Texas

San Antonio

JERRY FRANK JONES

400 West 15 , Suite 975

Austin, TX 78701

Phone: (512) 476-2929

jerry@jerryfrankjones.com

Honors: Texas Monthly Super Lawyer: 2003--2009

The Best Lawyers in America 2006--2009

Education: Williams College, Williamstown, Mass., B.A. 1967;

University of Texas-Austin, J.D, 1971

Certification: Board Certified, Estate Planning and Probate, State Bar of Texas.

Bicycle Assembly and Maintenance, Barnett Bicycle Institute, 2004

Fellow: American College of Trust and Estate Counsel

Instructor: U. of Texas, Legal Assistant Program, Estate Planning & Probate (1989-1995)

Author:

CPresented: “Exculpatory Clauses,” Fiduciary Litigation Course, State Bar (2009)

C “LIMITATIONS IN FIDUCIARY LITIGATION,” Advocate, Litigation Section, State

Bar of Texas 2009.

C“‘HE’S DEAD?’ Suing and Defending When There is A Dead Body,” Car Crash Seminar

2005-2006, University of Texas, School of Law

C“HE’S INCAPACITATED? Powers of Attorney.” Advanced Real Estate Drafting

Course, State Bar of Texas 2005.

C"A TOPICAL GUIDE: Advanced Estate Planning and Probate Course Articles" State Bar

of Texas, Annual Advanced Estate Planning and Probate Course (Originally prepared in

1992; updated each year through 2010)

C“‘HE’S DEAD?’ Real Estate in a Decedent’s Estate,” Advanced Real Estate Drafting

Course 2002

C“HE’S INCAPACITATED? Powers of Attorney.” Advanced Real Estate Drafting

Course, State Bar of Texas 2005.

C“TEXAS LEGISLATIVE REPORT” 2003, 2001, 1999, 1997 State Bar of Texas, Annual

Advanced Estate Planning and Probate Course.

C"The 706 for Country Lawyers and Other Simple People," Travis County Probate and

Trust Law Section, 1994.

C"DEATH AND TAXES: An Introduction To Taxes Concerning A Probate Attorney,"

prepared for the University of Texas Legal Assistant Program--1993.

State Bar of Texas: Real Estate, Probate and Trust Law Section: Chair (2001-2002), Council

(1994-1998) and Legislative Liaison (1997–2003 ); Pattern Jury Charges: Family Law

Committee, Probate Subcommittee Chair (2009)

Texas Legislature

CLegislative Liaison, Real Estate, Probate and Trust Law Section, State Bar of Texas

(1997–2003)

CLegislative Liaison, Texas Academy of Probate Lawyers (1997-2003)

CMember, Texas Legislative Interim Study Committee on Community Property Laws

(1999-2000)

Alp d’Huez Club: October 2005.

LAURIE RATLIFF

Ikard & Golden, P.C.

400 West 15th St., Suite 975, Austin, Texas 78701

(512) 472-4601

lratliff@ikardgolden.com

BOARD CERTIFICATION

Civil Appellate Law - Texas Board of Legal Specialization

JUDICIAL CLERKSHIP and COURT EXPERIENCE

Briefing Attorney - Seventh Court of Appeals, Amarillo (Justice John T. Boyd)

Staff Attorney - Third Court of Appeals, Austin

EDUCATION

Texas Tech University School of Law - J.D. 1992

Research Editor, Texas Tech Law Review

University of Texas at Austin - B.B.A. 1989

SELECTED COMMUNITY SERVICE, ACTIVITIES and HONORS

Board of Directors -- The Settlement Club

AV Peer Review Rating by LexisNexis Martindale-Hubbell

Super Lawyer(2005, 2006, 2007, 2008 & 2009)

Member – State Bar Appellate Section; Pro Bono Committee

Life Fellow, Texas Bar Foundation

Past Chair, Travis County Bar Association Civil Appellate Section

Past Chair, Heritage/History Committee, Appellate Section, State Bar of Texas

Past Assistant Coach, University of Texas School of Law Jessup International Law Moot

Court Team

SELECTED RECENT PRESENTATIONS and PAPERS

“Statute of Limitations Issues in the Probate, Guardianship & Trust Context The Advocate

(Vol. 48 Fall 2009)

“Appealing Bench Trials” State Bar Nuts and Bolts of Appellate Practice (2009)

“Everything you wanted to know but were afraid to ask: an open Q&A with Judge Hurley,

Justice Wainwright & Chief Justice Jones” Panel Moderator Austin Bar Association Bench bar

(2009)

“Oil Tank Farm and Gas Storage Cases on Appeal” Texas Oil & Gas Association 2009 Property

Tax Representatives Annual Conference (2009) (co-presenter)

“Case Law Update” Austin Bar Association Nuts & Bolts of Administrative Law Seminar

(February 2009)

“Practice Before the Courts of Appeals” State Bar Appellate Boot Camp (2008)

“Jury Charge Issues” State Bar 31st Annual Advanced Civil Trial Course (2008)

“Midland Tank Farm Appeal Update” Texas Oil & Gas Association 2008 Property Tax

Representatives Annual Conference (2008) (co-presenter)

“Not Just for Toxic Tort Cases: Strategic Use of Multidistrict Litigation Consolidation” 71

TexBar J. 98 (2008) (co-author with Lynne Liberato)

“Preserving Issues in Post-Trial Motions” Austin Bar Association Civil Litigation Section

Ultimate Trial Notebook Seminar (June 2007)

“Shaking Out the New Multidistrict Litigation Rules and MDL Panel Decisions” Permian Basin

Oil & Gas Law Weather Report (March 2007)

“Appellate Practice Tips Every Lawyer Needs to Know” Austin Bar Association First Friday

CLE (December 2006)

“Multidistrict Litigation” 20th Annual Advanced Civil Appellate Practice Course (2006)

“Case Law Update” 7 Tex. Tech. Admin. L.J. 1 (Spring 2006) (co-author)

“Appeals Involving the Government” 19th Annual Advanced Civil Appellate Practice Course

(2005)

“Case Law Update” Austin Bar Association Annual Advanced Administrative Law Seminar

(2005, 2004, 2002)

“Supreme Court Update” College of the State Bar Summer School (co-presenter)(2005)

Ethics Seminar Class, “Lifestyle Issues” South Texas College of Law (co-presenter) (2004)

“Third Court of Appeals Update” Travis County Bar Association Bench-Bar Conference (April

2004)

Austin Lawyer: Third Court of Appeals Update” - monthly article (2001-present)

The Appellate Advocate: Texas Supreme Court Update” - annual article (co-author) (2002-

present)

PROBATE, GUARDIANSHIP & TRUSTS

STATUTES OF LIMITATIONS ISSUES

TABLE OF CONTENTS

INTRODUCTION. ..................................................... 1

1 . PROBATE...................................................... 2

a . The effect of death on the statute of limitations. ................. 2

b . An estate is not an entity. ................................... 2

c . A suit against an estate may not toll the statute of limitations. ..... 2

d . The relation back doctrine as a means of curing defects

in capacity. ............................................... 5

e . Limitation issues relating to probating a will. ................... 6

i. Probate of the Living: Void. . ........................... 6

ii. Pre Mortem Probate.. ................................. 6

iii. Pre Mortem Agreements and Assignments. ............... 7

iv. 4 Years to Probate..................................... 7

v.After 4 Years: Muniment of Title.......................... 7

vi. After 4 Years: Innocent Purchasers. ..................... 7

vii. After 4 Years: Faultless Beneficiaries..................... 7

viii. After 4 Years: Abandonment............................ 8

ix. After 4 Years. To Show Revocation. ..................... 8

f . Limitations issues in will contests............................. 9

g . Statute of limitations issues relating to temporary administrators... 9

h . Limitations issues relating to the appointment of a

personal representative..................................... 1 0

i. Before Appointment.. ................................ 1 0

(1)30 Days. ...................................... 1 0

(2)Four Years. ................................... 1 0

(3)After Four Years. ............................... 1 0

ii. After Appointment.................................... 1 0

(1)20 days: Bond & Oath. .......................... 1 0

(2)60 Days. Notice to Beneficiaries. .................. 1 1

(3)90 Days. Inventory.. ............................ 1 1

(4)Notice to Creditors.............................. 1 1

i . Limitations: Affidavits of Heirship.. .......................... 1 1

j . Limitations issues relating to heirship proceedings. ............ 1 2

i. East, Kenedy & Fernandez............................. 1 2

ii. Cases Before East, Kenedy & Fernandez................. 1 4

k . Limitations issues relating to adopted children. ................ 1 6

l . Additional Limitations issues for children without a

presumed father. . ........................................ 1 6

m . Limitations issues involving void marriages. .................. 1 7

n . Limitations issues with common law marriages. ............... 1 7

o . Limitations issues relating to claims against an estate. . ........ 1 7

i. Unsecured Creditors: 4 Month Notice.................... 1 8

ii. Secured Creditors. . ................................. 1 8

(1)Election. ...................................... 1 8

(2)Preferred Debt and Lien. . ....................... 1 8

(3)Matured Secured ............................... 1 8

(4)Usual Election.................................. 1 8

(5)Deemed Election................................ 1 8

iii. Tolling of claims in the Probate Code. . ................. 1 8

iv. Liquidated claims in dependent administrations........... 1 9

(1)4 Months. ..................................... 1 9

(2)30 Days. ...................................... 1 9

(3)90 Days. ...................................... 1 9

p . Foreclosures and dependent administrations. ................. 1 9

q . Foreclosures and independent administrations................. 1 9

r . Limitations issues relating to contracts for bequests.. .......... 1 9

s . Statutory bill of review proceedings........................... 2 0

2. INCAPACITY AND GUARDIANSHIPS............................... 2 0

a . Guardian Appointed........................................ 2 0

i. Bond and Oath....................................... 2 0

ii. Inventory.. ......................................... 2 1

iii. Allowance........................................... 2 1

iv. Investments......................................... 2 1

b . Incapacity tolls the statute of limitations. . .................... 2 1

i. Personal Actions..................................... 2 1

ii. Real Estate. ........................................ 2 1

c . The effect of the appointment of a guardian on limitations. . ..... 2 2

d . Creditors ................................................ 2 2

i. Election: Secured Creditor............................. 2 3

ii. 120 Day Notice. ..................................... 2 3

iii. 90 Day Barring Statute. ............................... 2 3

e . Bill of Review............................................. 2 3

3 . NEXT FRIEND.................................................. 2 3

4 . TRUSTS....................................................... 2 3

a . General.................................................. 2 3

b . Removal: No Limitation..................................... 2 4

c . Trust Contest............................................. 2 5

d . Limitation in Venue. . ..................................... 2 5

e . No shortening of limitations periods: Mandatory Rules.......... 2 6

iii

5 . BREACHES OF FIDUCIARY DUTY................................. 2 6

a . General. ................................................ 2 6

b . Older Cases.. ............................................ 2 6

c . Cases Under the Statute.................................... 2 6

d . Conte, Court of Appeals.. .................................. 2 6

e . Bonds: Executors, Administrators and Guardians Statute. ....... 2 7

f . Accountings and Releases: . ............................... 2 7

i. Guardians and Dependent Administrators................ 2 7

ii. Independent Executors............................... 2 7

iii. Trustees. . ......................................... 2 8

6 . LACHES . .................................................... 2 8

a . Two Uses. ............................................... 2 8

b . Applies to Settlors and Trustees as well as Beneficiaries......... 2 8

c . Affirmative Defense. ....................................... 2 8

d . Elements. . .............................................. 2 8

e . Relation to Statute of Limitations. . .......................... 2 9

f . Removal.. ............................................... 2 9

g . Old Repudiation Cases. .................................... 2 9

i . Factors Considered........................................ 3 0

j . Damages vs Enforcement................................... 3 0

k . Third Parties. . ........................................... 3 0

PROBATE, GUARDIANSHIP & TRUSTS

STATUTES OF LIMITATIONS ISSUES

b y

Jerry Frank Jones

and

Laurie Ratliff

INTRODUCTION

The focus of this paper is to highlight

common statute of limitations issues in

probate, guardianships and trusts.

Some time limits (such as filing a bond)

are discussed, even though they are not

technically statutes of limitations. They

are mentioned because they may be

important in monitoring the actions of a

fiduciary to avoid his being (or to cause

him to be) driven from his office.

This paper does not cover deadlines for

appealing final judgments or bills of

review or direct and collateral attacks on

judgments.

The finality of judgments in probate

court is a quagmire. Not only can it

impact when you must appeal; it also

tells you whether or not a particular

order of the court may be reviewed at a

later date. Severance and vigilance are

the keys. Judge Steven King’s article on

final judgments was most recently

presented at the 2009 Advanced Estate

Planning and Probate Course and will

be found at Tab 23. Also see, the

discussion after Probate Code Section 5

Johanson’s Texas Probate Code.

On direct and collateral attacks on

probate judgments see generally Texas

Practice Series, Probate and

Decedents’ Estates.

On probate bills of review, see Section

31 (Decedents’ Estates) and Section

657 (Guardianships) of the Texas

Probate Code. For an introduction to

equitable bills of review see pages 529

et seq of O’Connor’s Texas Rules, Civil

Trials 2010.

References to sections are to the Texas

Probate Code unless otherwise

indicated. It is also worth noting that

the Guardianship Code is actually a part

of the Probate Code beginning at

section 601. The Trust Code is in the

Property Code at Sections 101.001

through 117.012.

There are other sections of the Property

Code dealing with trust matters. Most

notably section 142.005 on court

created trusts, chapter 121 on

employees’ trusts, chapter 123 on the

attorney general’s participation in

charitable trusts, chapter 163 on

institutions funds and chapter 181 on

powers of appointment.

1 . PROBATE

a . The effect of death on

the statute of limitations.

i. Section 16.062 of

the Civil Practice and Remedies Code

tolls for one year any action in favor of

or against a dead person. TEX. CIV.

PRAC. & REM. C ODE §16.062. Thus, if a

plaintiff dies before suit is filed, there

can be up to one additional year to bring

an action. Likewise, if a defendant dies

before suit is filed, the plaintiff has an

additional year to bring any action.

ii. Except if a personal

representative is appointed within a year

of death. In that case this statute

begins to run on the date the personal

representative qualifies. Id. §16.062.

iii. Note that Section

16.062 only tolls the claims on behalf of

the decedent and his estate, not those

made by the family under the wrongful

death statute. See TEX. CIV. PRAC. &

REM. CODE § 71.001 et seq.

iv. This statute does

not revive any action that was barred at

the time of death. Russell v. Ingersoll-

Rand Co., 841 S.W.2d 343, 344-45

(Tex. 1992).

v. In Garcia v

Caremark, Inc., 921 S.W.2d 417, 421

(Tex.App.—Corpus Christi, no writ

1996), the parent sued on behalf of his

child’s estate. The suit was filed more

than 2 years after the child’s death but

less than 3 years. The defendant

contends that the extra year under

§16.062 was not available because the

parent had acted as de factor

administrator. The Court rejected that

contention indicating that §16.062 calls

for a personal representative to qualify,

which means taking an oath and

possibly filing a bond. Further, that if

they allowed an informal or defacto

administrator to start the running of the

statute of limitations that the dates

would be nebulous. Whereas with a

formal administration there is a definite

date.

b . An estate is not an

entity. An estate is not an entity and

cannot sue or be sued, Henson v.

Estate of Crow, 734 S.W. 2d 648 (Tex.

1987). The personal representative of

an estate can sue and be sued and in

certain instances the heirs of an estate

can sue and be sued.

c . A suit against an estate

may not toll the statute of limitations.

i. There are a number

of cases in which a plaintiff sued an

estate and not the personal

representative. In some the judgment

was declared void. In others the

judgment was sustained because the

defendant had knowledge of the suit,

participated or made an appearance.

There are three supreme court cases.

(1) In Price v.

Estate of Anderson, 522 S.W.2d 690

(Tex. 1975), the plaintiff sued the

“Estate of Anderson” and served the

temporary administrator. As authorized,

the administrator accepted service,

notified the insurance company and

retained counsel. The attorney filed an

answer and several other documents on

behalf of the “estate.” Subsequently,

the attorney filed a motion to dismiss,

arguing the action was barred by the

statute of limitations.

(a) The

plaintiff then amended and named the

temporary administrator as a defendant.

The trial court dismissed the action

against both the estate and the

temporary administrator.

(b) The

plaintiff argued that this was a

“misnomer” case where the plaintiff

misnamed the defendant. The supreme

court disagreed and concluded it was

not a “misnomer” case, but was a

mistake of law. Id. at 691-92. The court

refused to consider whether or not this

mistake was inexcusable. Instead it held

that the purposes of the statute of

limitations were not breached in this

matter, because the defendant knew of

the lawsuit and had attorneys who

represented him throughout the

proceeding. Id.

(2) In Henson v.

Estate of Crow, 734 S.W.2d 648, 649

(Tex. 1987), a landlord sued for back

rents; the defendant died during the

litigation and the defendant’s lawyer

gave notice of death. The plaintiff then

amended and added the “Estate of

Bruce L. Crow” as the defendant. The

lawyer who had been representing the

decedent filed an answer on behalf of

the estate. The court entered judgment

for the defendant and against the

plaintiff landlord.

(a) Citing

Price v. Estate of Anderson, the

supreme court held that the estate was

not a legal entity and could not be sued.

The plaintiff argued that problem was

waived because the attorney filed an

answer for the estate. The supreme

court disagreed and concluded that this

case was different from those where the

personal representative appears. The

plaintiff also argued that the estate

waived any error because it did not

except to the defect. The supreme

court again rejected the plaintiff’s

argument. According to the court, since

the estate is not a legal entity there was

no one before the court to make

exception or to waive defects. Id. at

649. The supreme court affirmed. There

was no indication or discussion of

whether or not the plaintiff was now

barred from making a proper claim

against the personal representative. Nor

did the supreme court discuss any

limitations problems.

(3) The supreme

court took up this problem one more

time in Rooke v. Jenson, 838 S.W.2d

229 (Tex. 1992). In this car accident

case, the plaintiff first sued Sam Reed.

After learning that Reed was deceased,

the plaintiff amended and named

Reed’s wife, who was the sole heir and

executrix in Reed’s will, as the

defendant. Reed’s daughter, Jenson,

knowing of the suit, became the

personal representative rather than the

widow, but more than two years after

the accident. Rooke again amended her

lawsuit this time to name Jensen, as

executor, as a defendant. The trial court

dismissed the lawsuit on the basis of

limitations.

(a) The

supreme court held that because

Jensen knew about the lawsuit no

purpose of the statute of limitations

would be served by dismissing the

action. Id. at 230.

(b)

Jensen argued that, unlike Price, supra,

in this case the person actually serving

as executor was different from the

person originally sued. The court

disagreed because Jensen was fully

aware of the suit and used the same

attorney who had represented the

mother. Id.

ii. There are several

lower court cases as well.

(1) In Estate of

C.M. v. S.G., 937 S.W.2d 8 (Tex.

App.—Houston [14 Dist.] 1996, no

writ), plaintiff brought an action against

LCM for molestation and against the

estate of his wife, CM. LCM was the

executor and the plaintiff had him

served. However, LCM never appeared

or participated as executor. He had one

lawyer and the “estate” had another.

(2) The trial

court entered judgment for the plaintiff

and against both LCM and CM’s estate.

On appeal the court on its own

determined that the matter had to be

reversed because the estate was not a

legal entity. Thus, the trial court lacked

“fundamental jurisdiction” which could

not be waived. The court of

appeals said that suits seeking to

establish liability of an estate should be

filed against the personal representative

or in some instances, the heirs or

beneficiaries. Id. at 10.

(3) The court

explained that a judgment against an

estate is not necessarily void if the

personal representative appears or

participates in the lawsuit. Id. at 10.

The court held that because the

executor did not appear or participate in

the trial in his capacity as executor, the

trial court lacked jurisdiction to enter

judgment against the estate. The court

reversed and rendered a take-nothing

judgment. Id. at 10-11.

(4) The

reasoning of this court does not seem to

square with the knowledge element set

out in Price, supra.

(5) What the

court did not say is whether or not a

subsequent action was barred either by

res judicata or by limitations or if there

had been a tolling of the statutes.

iii. In Gregg v. Barron,

977 S.W.2d 654 (Tex. App.—Fort Worth

1998, pet. denied), plaintiff sued the

estate and listed the son as the child

and heir of the decedent. The son was

served with process. The heir answered

and participated in discovery. After

limitations ran, plaintiff amended and

named the son, as the personal

representative of the estate, as a

defendant and as sole heir. Id. at 655.

Son moved for summary judgment in

that an estate was not a legal entity, that

no one had been appointed personal

representative and that son was not

joined until after the statute of limitations

had run. The trial court granted

summary judgment for the son.

(1) The court of

appeals reversed and remanded.

Although acknowledging that a personal

representative is the proper party, not

the estate; the court of appeals

concluded that the statute of limitations

was tolled because the proper

defendant participated in the trial

although the suit was incorrectly styled

as being brought against the estate. Id.

at 656-57; see also Dueitt v. Dueitt, 802

S.W.2d 859, 861-62 (Tex. App.--

Houston [1 Dist.], 1991, no writ) (only

estate was named as plaintiff but

executor participated in his

representative capacity; judgment was

not set aside).

(2) Son went on

to argue that Price could be

distinguished

“…because no personal

representative has been

appointed to his father's estate.

However, this difference does not

affect the spirit of the Price

opinion, nor does it change the

fact that Charles participated in

the trial of the case. More

importantly, Charles has not

denied that he is the sole heir of

the deceased.”

iv. In Richardson v.

Lake, 966 S.W.2d 681 (Tex.App.—San

Antonio 1998, no pet.) the statute of

limitations was about to run. In his suit,

filed against “The Estate of Torfeasor”

plaintiff stated that he knew he had to

make the personal representative a

party but that there was no

administration pending. As soon as the

temporary administrator was appointed

(which was after the statute of

limitations had run), the plaintiff had him

served with process. The court was

persuaded that the plaintiff knew the law

and complied with it as promptly as

possible. Id. at 683.

d . The relation back

doctrine as a means of curing defects

in capacity.

i. Under the relation

back doctrine, if a filed pleading relates

to a cause of action or defense that is

not subject to limitations when the

pleading is filed, a subsequent

amendment that changes the facts or

grounds of liability is not subject to

limitations unless the amendment is

wholly based on a new, distinct or

different transaction or occurrence.

Tex. Civ. Prac. & Rem. Code §16.068.

ii. Two Texas

Supreme Court cases are worth noting.

In both cases, the supreme court

concluded that a plaintiff’s lack of

capacity could be cured by the

subsequent appointment as

administrator after limitations had run,

but before the actions were dismissed.

iii. First, in Austin

Nursing Center, Inc. v Lovato, 171

S.W.3d 845 (Tex. 2005), a woman

asserted a health care liability claim on

behalf of her mother’s estate. She filed

suit within the statute of limitations

individually and as personal

representative of her mother’s estate. In

fact, however, she was not the personal

representative. After the statute of

limitations had run, the probate court

appointed her the personal

representative. Id. at 847.

iv. According to the

supreme court, the estate’s claims were

not barred and her claims as personal

representative related back to her

original filing. Id. at 852-53. The court

characterized the issue as one of

capacity to sue, not as standing to sue.

Id. at 848-49. Thus, the defendant had

to raise the issue in the trial court by a

verified pleading. Id. at 849. Standing

on the other hand, which is a

component of subject matter jurisdiction,

can be raised for the first time on

appeal. Id.

v. Second, the

supreme court addressed a similar

issue with similar facts in Lorentz v.

Dunn, 171 S.W.3d 854 (Tex. 2005).

Lorentz, the decedent’s sister, brought

an action purporting to be the

administrator of her sister’s estate. In

fact her application was pending and

had not been granted at the time she

filed suit. Her appointment as

administrator came after the statute of

limitations had run. Defendant moved to

dismiss contending that Lorentz lacked

standing when the suit was filed.

Defendant also asked that the matter be

dismissed as sanctions for

misrepresenting her capacity.

vi. As in Lovato, the

supreme court treated the issue as one

of capacity not standing. Id. at 856.

The court concluded that the after

acquired capacity cured the pre-

limitations lack of capacity. Id.. The

Court declined to address the sanctions

motion, leaving that to the discretion of

the trial court.

vii. The Amarillo Court

of Appeals addressed the relation back

doctrine in Covington v. Sisters of

Charity, 179 S.W.3d 583 (Tex. App.--

Amarillo 2005, pet denied). The case is

instructive in its discussion of Lovato

and Lorentz.

viii. In Covington,

decedent’s sister brought an action for

herself and Aon behalf of the estate,”

even though one of the decedent’s

children had already been appointed

administrator. Id. at 584-85. After being

challenged, and after the statute of

limitations had run, the sister amended

her lawsuit to include the court

appointed administrator. Id. at 585.

ix. The Amarillo Court

held that the relation back doctrine did

not apply. According to the court, the

sister was a “stranger” to the lawsuit,

and thus she did not have any claims.

Id. at 587-89.

x. Interestingly, the

administrator did not bring the action as

required by Civil Practice and Remedies

§71.001(c). The case does not discuss

the administrator’s possible liability.

e . Limitation issues

relating to probating a will.

i. Probate of the

Living: Void. Any administration of an

estate or probating of a will of a person

who is still living is void. TEX. PROB.

CODE § 72(a).

ii.Pre Mortem

Probate. Similarly, one cannot establish

the validity of a will during the testator’s

life. While some states allow proof of

the validity of a will during a testator’s

lifetime, Texas does not have any such

provision. See Gerry Beyer, TEXAS LAW

OF WILLS, § 52.38 et seq.

iii. Pre Mortem

Agreements and Assignments. But

agreements regarding the disposition of

a living person’s estate are sometimes

made. Some courts have approved

such agreements and others have

declined jurisdiction. This occurs

occasionally in contested guardianships

where the parties want to avoid further

litigation on the death of the proposed

ward. Such an agreement would not be

binding on the Ward, for example if they

subsequently regained capacity. Under

Texas law, a person may assign an

expectancy. See Section 11.7, Texas

Practice, Wills If a person assigns an

expectancy, the assignee only takes

what the assignor actually has at death.

A testator always has the right to

change a will.

iv.4 Years to

Probate. The statute of limitations to

probate a will is four years from the date

of death. TEX. PROB. CODE § 73.

(1) In Farr v.

Bell, 460 S.W.2d 431, 436

(Tex.Civ.App.—Dallas 1970, writ ref.

n.r.e.) the court held that article 5538 of

the Revised Civil Statutes (the

predecessor to Civil Practice &

Remedies Code §16.062) did not

extend this four year statute.

v.After 4 Years:

Muniment of Title. A will may be

admitted to probate after four years but

only for the limited purpose to prove

title, as a muniment of title. No personal

representative can be appointed. The

person offering the will must establish

that they are not in default for failing to

present the will for probate within the

four-year period. TEX. PROB. CODE

§73(a). In Brown v Byrd, 512 S.W.2d

753, 755 (Tex.Civ.App.—Tyler 1974, no

writ), the court defined, not in default as

“…a failure due to the absence of

reasonable diligence on the part of the

party offering the instrument.”

vi.After 4 Years:

Innocent Purchasers. If a bona fide

purchaser buys property from the heirs

four years after the decedent’s death,

and no will has been probated, he is

protected. The subsequent probate of a

will does not effect the good title of the

purchaser. Section 73(b). Any complaint

the beneficiaries under the will has to be

directed against the heirs and the

proceeds received from the BFP. But

anyone who buys from heirs takes

subject to an administration. Texas

Practice, Decedent’s Estates, Section

191.

vii. After 4 Years:

Faultless Beneficiaries. Even though

one beneficiary under a will may be

barred from probating the will because

they are in default, another beneficiary

who is not in fault may successfully

submit it for probate. Fortinberry v.

Fortinberry, 326 S.W.2d 717, 719-20

(Tex. Civ. App.--Waco 1959, writ ref’d

n.r.e.).

(1) This rule,

however, does not protect the

successors to a beneficiary in default. In

Faris v Faris, 138 S.W.2d 830 (Tex. Civ.

App.--Dallas 1940, writ ref’d), the widow

survived her dead husband by 20 years,

but never offered his will for probate. On

her death, her children tried to probate

his will. According to the court of

appeals, widow waived her rights and

her successors--even though not

directly in default--could not probate the

will. Id. at 832.

(2) The courts

have been more generous with grantees

under deeds who are trying to establish

a link in their chain of title. Chovanec v.

Chovanec, 881 S.W.2d 135, 137-38

(Tex.App.--Houston [1 Dist.] 1994, no

writ).

(3) If a will is

probated as a result of the application of

a person not in default, everyone under

the will takes their interest, even a

person who could not have probated the

will because they were in default.

Masterson v. Harris, 107 Tex. 73, 174

S.W. 570, 573-75 (1915).

(4) In Estate of

Williams, 111 S.W.3d 259, 263-64

(Tex.App.--Texarkana 2003, pet.

denied), only one beneficiary applied to

probate the will. The appellate court

held that he was in default and that the

lack of fault of the other beneficiaries

(who did not apply to have the will

probated) was irrelevant. Whether or

not those persons could subsequently

seek probate of the will was not

addressed.

(5) If a will is

offered for probate after four years, the

decedent’s heirs (or beneficiaries of a

prior will) must be given notice of the

application. TEX. PROB. CODE §128B.

Section 128B details the type of notice

and its requirements. This statute was

enacted in 1999. The only reported case

applying §128B is Estate of Cornes, 175

S.W.3d 491 (Tex.App.--Beaumont 2005,

no pet). In Cornes, the Beaumont Court

held that the constitutional county

court’s failure to give notice was

harmless error because the issues were

tried “de novo” in the district court. Id. at

494-95.

viii. After 4 Years:

Abandonment However, a proponent

may raise a presumption that the

application was abandoned. In Abrams

v. Ross’ Estate, 250 S.W. 1019, 1021-

22 (Tex. Comm’n App.1923, judgm’t

adopted), the court held that a 44-year

delay from an order of continuance

created a “conclusive” presumption of

abandonment. But generally, a

presumption of abandonment may be

rebutted. Brown v. Byrd, 512 S.W.2d

753 (Tex. Civ. App.—Tyler 1974, no

writ).

ix.After 4 Years. To

Show Revocation. A will not

admissible to probate because not

offered within four years can still have

effect. Such will can show revocation of

an earlier will. Even if the will was not

admitted to probate because the

proponent was at fault in not offering it

earlier, it can still be used to show

revocation of an earlier will. In re Estate

of Williams, 111 S.W.3d 259 (Tex.App.--

Texarkana 2003, pet. denied).

f . Limitations issues in will

contests.

i. As with any

proceeding in which court relief is

sought, a will may be contested before it

is admitted to probate. Section 10 of the

Probate Code provides for the filing of

an opposition by an interested person.

TEX. PROB. CODE §10. A will may also

be contested for two years after its

probate. TEX. PROB. CODE § 93.

ii. There is also an

exception to the two-year statute of

limitations to contest a will for

incapacitated persons. An incapacitated

person has two years after gaining

capacity to institute a contest. TEX.

PROB. CODE 93.

iii. Courts tend to be

lenient in allowing will contests. For

example, personal service on a person

before the will is admitted to probate

does not bar a post probate will contest

under Section 93. Estate of Blevins, 202

S.W.3d 326, 328 (Tex.App.--Tyler 2006,

no pet.).

iv. The appointment of

a guardian ad litem for a minor in the

original contest did not bar the minor

from filing a contest within two years of

reaching majority. Ladehoff v. Ladehoff,

436 S.W.2d 334, 340 (Tex. 1968). This

mysterious result is explained because

the minor was not served with process.

Service on a minor is a prerequisite to

having a judgment binding on a minor.

v. A proceeding to

probate a will dated later than the one

already admitted to probate is not a will

contest--because it is not disputing the

validity of the probated will-- and is

controlled by the four year statute,

Section 73; not the two-year limitation in

Section 93. See Estate of Morris, 577

S.W.2d 748, 752

(Tex.Civ.App.—Amarillo 1979, writ ref’d

n.r.e.).

g . Statute of limitations

issues relating to temporary

administrators.

i. The temporary

administration procedure is set out in

Texas Probate Code § 131A et seq; see

17 M.K. WOODWARD & ERNEST E. SMITH,

III, TEXAS PRACTI CE: PROBATE AND

DECEDENTS’ ESTATES §§ 461-80 (1971).

ii. Temporary

administrations should be avoided if at

all possible. It will double the

administration costs. Also, some

probate judges are openly hostile to

establishing a temporary administration

especially if the only reason is because

a plaintiff’s attorney has not been

diligent. However, if a temporary

administrator is involved, below are

issues to consider.

iii. At best, a

permanent personal representative

cannot be appointed until the first

Monday 10 days after the application is

filed and citation is posted. TEX. PROB.

CODE §§ 128; 33(f)(2).

iv. If the statute of

limitations will run, even with the help of

TCPRC Section 16.062, before an

administrator can be appointed, the

court can appoint a temporary

administrator. If the temporary

administrator is to be a defendant, he

should be authorized to accept service

of suit, notify the insurance carrier, to

demand defense and indemnity and to

co-operate with the insurance company.

v. While it is true that

a creditor of an estate (such as a

plaintiff in a personal injury claim) is

entitled to be appointed administrator

under Probate Code §77(f), it is not the

best practice. If the plaintiff asks for an

administrator so there is a proper party

to sue, the plaintiff should decline to

serve and ask that an independent third

party be appointed.

vi. A decedent’s

debtor, a potential defendant, is not an

interested person under Section 3(r) of

the Texas Probate Code. Thus, a

debtor may not bring an action to

appoint an administrator.

vii. If the deceased

does not have any assets (or at least

not any non-exempt assets) other than

his rights under an insurance policy, the

applicant may have to pay the

temporary administrator’s fees and

expenses.

h . Limitations issues

relating to the appointment of a

personal representative.

i. Before

Appointment.

(1)30 Days.

The Probate Code provides for a

hammer on executors who fail to offer a

will for probate in a timely manner.

Section 178(b) provides, inter alia, that

letters of administration shall issue if a

person named as executor in the will,

without good cause, fails to offer the will

for probate within 30 days of the

decedent’s death. Thus, a third party

could step in and be appointed

administrator rather than the person

named in a will. This rule is seldom

used. But it is there, and the statute

uses “shall.” There have been no cases

since it was amended in 2007 to add the

“good cause” clause. For a discussion

of the cases before that time, see

Johanson’s Texas Probate Code

discussion following Probate Code §

178.

(2)Four Years.

There is a four-year statute of limitations

for appointing a personal representative.

Section 73(a) states that no personal

representative shall be appointed where

a will is probated more than four years

after the date of death. TEX. PROB.

CODE §73(a).

(3)After Four

Years. However, apparently a personal

representative can be appointed after

four years if the application to appoint

him was filed within four years. See

Section 74 and Texas Practice,

Decedents’ Estates, Section 226. This

could come up if a will has been

probated as a muniment of title or in an

heirship proceeding.

ii.After Appointment.

(1)20 days:

Bond & Oath. After the court appoints a

personal representative, the

representative must file a bond (if any is

required) and oath within 20 days of the

order of appointment. If the bond and

oath are not filed within 20 days, the

court may revoke the order appointing

the personal representative. TEX. PROB.

CODE §192.

(2)60 Days.

Notice to Beneficiaries. Under Section

128A a personal representative has to

give notice to all beneficiaries under a

will that the will has been probated and

the personal representative has been

appointed.

(3)90 Days.

Inventory. Within 90 days of

qualifications, the personal

representative must file an inventory

unless an extension has been granted.

Section 250.

(4)Notice to

Creditors.

(a)30

Days. Publish in Newspaper. Within 30

days of qualification, the personal

representative must publish a notice to

creditors in the newspaper. Section 294.

(b)2

Months. Within 2 months of

qualification, the personal

representative must give notice by

certified mail to all secured creditors.

Section 295.

time. At any time, the personal

representative may give to unsecured

creditors that they must present their

claims within four months are their claim

will be barred. Section 294(d)

i . Limitations: Affidavits of

Heirship.

i. Section 52 of the

Texas Probate Code provides that

affidavits of heirship that have been on

file for five years are prima facie

evidence of the facts stated in the

affidavit in heirship proceedings and

suits involving title to real or personal

property.

ii. Section 52(c) states

that this statute is cumulative and that it

is not to abrogate any right to present

evidence or rely on an affidavit

iii. For more on the

relationship between that Section and

Texas Rules of Civil Procedure Rules

804(b)(3) and 893 (14), see Compton v.

WWV Enterprises, 679 S.W.2d 668

(Tex. App.–Eastland 1984, no writ). For

a history of affidavits of heirship, see

Johanson’s discussion of Nonstatutory

affidavits of heirship in his Commentary

following Section 52.

iv. These affidavits

have always been looked on with favor.

But in 1999, at the behest of the Texas

title companies, the Texas Legislature

enacted Section 52A. That is a statutory

form for affidavits of heirship. Since

then, affidavits of heirship have become

even more accepted for proving up title

to real estate.

v. However, affidavits

of heirship are merely evidentiary

devices. They do not start the running of

any statutes of limitation. Section 52(c)

says:

“An affidavit of facts concerning

the identity of heirs of a decedent

does not affect the rights of an

omitted heir or creditor.”

vi. So while they can

be very handy and economical, they

should be used with caution.

j . Limitations issues

relating to heirship proceedings.

i. East, Kenedy &

Fernandez. On April 16, 2010, the

Texas Supreme Court decided four

cases arising out of the estates of John

Kenedy and Sarita East: Frost National

Bank v. Fernandez, __________

S.W.3d _________, 2010 WL 1526369

(Tex.); In re the John G. and Marie

Stella Kenedy Memorial Foundation, ---

S.W.3d ----, 2010 WL 1526353 (Tex.);

John G. and Marie Stella Kenedy

Memorial Foundation,v. Fernandez, ---

S.W.3d ----, 2010 WL 1509668 (Tex.);

and,John G. and Marie Stella Kenedy

Memorial Foundation,v. Fernandez ---

S.W.3d ----, 2010 WL 1509657 (Tex.).

Most of the facts and comments

regarding limitations are set out in the

Frost National Bank v. Fernandez,

supra, opinion.

(1) Ann

Fernandez was born in 1925 to Maria

Rowland. Rowland worked for the

Kenedy family.

(2) John G.

Kenedy, Jr. died in 1948 with a

holographic will that left his property to

his wife Elena. It was promptly probated

in the Kenedy County Court.

(3) In 1949

Humble Oil, which was a lessee of part

of the Kenedy Estate mineral interests,

filed a will construction suit in district

court to find out if that will disposed of

all of his property. That year the district

court found that “all of the Kenedy heirs

were before it and that it did not leave

an intestacy.” That district court held as

a matter of law that

“’all persons who would have

inherited any part of the Estate of

John G. Kenedy, Jr., deceased, if

he had died intestate as to all or

any part of his estate, are parties

to this suit and therefore all

necessary and interested parties

are included among the

defendants herein.’”

(4) In 1952

“Kenedy's estate was distributed, taxed,

and closed”

(5) In 1961 his

sister, Sarita Kenedy East died. Her will

was probated that same year. There

were several contests of that will. In

1975 the district court entered a

judgment pursuant to a settlement with

some of the parties. The rest of the will

contests were resolved in 1978, See

Trevino v Turcotte, 564 S.W.2d 682

(Tex. 1978).

(6) In 1987,

East’s estate was closed.

(7) Mrs. Kenedy

died in 1984. Her will was probated that

year and her estate closed in 1987.

(8) Fernandez

contended that while she had heard

rumors it was only in 2000 that her

mother told her that Kenedy was her

father. She immediately started filing

actions including bills of review and

applications to determine heirship.

(9) The supreme

court took up a number of issues that

are very interesting to a probate lawyer

(standing, dominant jurisdiction,

exclusive jurisdiction, good faith

pleadings used to determine jurisdiction

exhumation, direct attacks on

judgments, bills of review, abatement,

and jurisdiction for heirship

proceedings)

(10) As

concerns this paper it addresses

limitations and the discovery rule. At

the very beginning of the opinion the

court says

“...we hold that the discovery rule

does not apply to inheritance or

heirship claims by non-marital

children, or bill of review claims to

set aside probate judgments.

Because Fernandez's claims

were barred by the applicable

statute of limitations, we render

judgment reinstating the district

court's judgment.”

(11) At page 10,

the court says

“When an heirship claim is

brought after an administration of

the decedent's estate or a

conveyance of the decedent's

property to a third party, courts

have applied the four-year

residual limitations period of

Texas Civil Practice and

Remedies Code section 16.051.

See, e.g., Cantu v. Sapenter, 937

S.W.2d 550, 552 (Tex.App.-San

Antonio 1996, writ denied); Smith

v. Little, 903 S.W.2d 780, 787-88

(Tex.App.-Dallas 1995), rev'd in

part on other grounds, 943

S.W.2d 414 (Tex.1997). Under

any conceivable accrual date, the

four-year statute of limitations ran

well before Fernandez first

asserted claims to the Kenedy

and East estates. Fernandez

conceded (emphasis added) that

the residual statute of limitations

applies and has never denied

that it bars her heirship claim

absent the application of the

discovery rule to save her claims,

arguing that we should apply the

discovery rule in heirship cases

such as this.”

(12) The court

discusses its prior refusal to extend the

discovery rule to adopted children. They

remind us that in Little v Smith, supra,

the court declined to apply the discovery

rule even though adopted children may

have many barriers to knowing they

were adopted or getting records

unsealed to learn who their biological

parents are.

(13) Generally,

this is a well written case. But, there are

troubling parts:

(a) They

refer to dominant jurisdiction.

(b) They

did not tell us when limitations accrue.

misstated, albeit in dictum, that you

cannot have an heirship proceeding in

the absence of a probate proceeding.

That’s got to be wrong.

(i)

First of all, Section 48(a) says a

court may declare intestacy in several

instances including when, “... no

administration has been granted in this

State.”

(ii)

Then, what about an heirship

proceeding when there is no need for an

administration, or it is too late to request

one.

(iii)

And what about a future interest

(remainder interest under a will,

remainder interest under a trust) where

the fiduciary needs to know who takes

but there is no administration pending.

(d)

Fernandez’s lawyer “conceded” that the

four year statute applied. Why didn’t he

argue that the real estate statutes of

limitations applied?

(e)

Apparently he did not argue the Section

31 bill of review. The argument was only

regarding the equitable bill of review.

The statute appears fairly clear but it

would be nice to know if there is a

discovery rule that applies.

(f) They

do not discuss whether their decision is

based in any part of this being an rem

proceeding.

(g) They

do not tell us if the 1949 intestacy

determination included ad litems and

citations by publication.

(h) They

do not discuss the impact of the now

mandatory citation by publication

(Section 50(b)) and the now mandatory

appointment of ad litems (Section 53(c))

both of which were added to the

statutes in 2001.

(i) They

do not discuss if these same rules apply

to marital children.

ii.Cases Before

East, Kenedy & Fernandez

(1) Sections 48

through 56 of the Texas Probate Code

provide a court procedure for

determining the heirship of a deceased

person. While the procedure is set out,

there is no statute of limitations

mentioned. Because the Probate Code

is silent, courts have held that the

general four year statute applies. TEX.

CIV. PRAC. & REM. CODE § 16.051;

(2) However,

Section 55 (a) does say that if an heir is

not served, he may

“...within four years from the date

of the such judgment have the

same corrected by bill of review

or upon proof of actual fraud,

after the passage of any length of

time,...”

(3) In York v.

Flowers, 872 S.W.2d 13, 16 (Tex.App.--

San Antonio 1994, writ denied), the

court made an exception for real estate.

Husband died intestate in 1944. The

widow conveyed the land by general

warranty deed in 1955. His out-of-

wedlock daughter brought suit to

recover her interest in 41.5 acres that

her father and his wife owned as

community property at the time he died.

(a) The

trial court granted summary judgment

for Flowers. First, Flowers contended

that out-of-wedlock children had no

inheritance rights. The San Antonio

Court of Appeals concluded that such

children do have inheritance rights

based on Trimble v. Gordon, supra.

Flowers next argued that he had good

title under all of the adverse possession

statutes including the 25 year statute.

The court said that since the child was a

co-tenant from the time of her father’s

death, the burden was on Flowers to

show “actual notice of repudiation of the

co-tenancy relationship…. There is no

evidence of actual notice of

repudiation.”

(b)

Finally, the court rejected Flowers

argument that Section 16.051 of CPRC

controlled because it is restricted to

personal actions. The court reversed

and remanded.

(4) Then in

Cantu v. Sapenter, 937 S.W.2d 550,

552-53 (Tex. App.—San Antonio 1996,

writ denied) the court discussed,

Section 55(a) of the Texas Probate

Code. It said there is a four-year rule,

but it is a four year bill of review, not a

statute of limitation. It says that a

person not served “…may at any time

within four years from the date of such

judgment have the same corrected by a

bill of review, or upon proof of actual

fraud, after the passage of any length of

time….”

(a)In

Cantu v. Sapenter, children born out of

wedlock brought an heirship action

eleven years after the date of death.

There was no administration but the

widow conveyed the property to a bona

fide purchaser. The court pointed out

that §55a of the Probate Code had this

four-year bill of review provision, but it

did not have a limitation provision. The

court noted that when a cause of action

was not governed by a particular

statute, that the four-year residuary

statute applied. Cantu, 937 S.W.2d at

552. The court applied these rules

while acknowledging the rights of

illegitimates under the equal protection

clause as announced in Weber v. Aetna

Casualty & Sur. Co., 406 U.S. 164, 175-

76, 92 S.Ct. 1400, 1406-07, 31 L.Ed.2d

768 (1972). Id. at 552-53.

(b) This

court also said that York v Flowers did

not apply because this was a probate

proceeding and York was an action to

recover real estate. The court did

acknowledge that the determination of

heirship was a perquisite to recovery in

York.

court said that the children knew they

were the decedent’s children and knew

that he had died, but took no action.

The court said that the recording of that

deed gave them at least constructive

notice that their interest in the property

was at stake.

(d) The

court acknowledged that at that time

there was no mechanism under Texas

law for a non marital child to assert their

interests. However, effective

September 1, 1987 the statute was

amended to allow their claims. Thus on

September 1, 1991 the statute of

limitations had run.

(e) Finally

the court said that is was restricting this

holding to cases with similar facts and

that they were not expressing any

opinion in cases where the children did

not know and through diligence could

not have found about the facts adverse

to their rights.

(5) In Jeter v.

McGraw, 79 S.W.3d 211

(Tex.App.—Beaumont 2002, pet.

denied), a “non marital child,” contended

that when dad died in 1947 intestate

that dad’s estate passed to non marital

child and not to the surviving spouse.

There was no administration of his

estate and no proceeding to determine

heirship. There was an affidavit of

heirship prepared in 1981 by Jeter’s

attorney showing that Jeter was an heir

of the decedent. The surviving spouse

conveyed her one-fourth interest to

McGraw. And in the next year signed

another deed to McGraw conveying

“…all [her] undivided interest. The

appellate court held that because this

involved real estate that the four year

residual statute (Section 16.051 CPRC)

did not apply, but suggested that on

remand that the adverse possession

statutes should be considered. Id. at

215-16.

k . Limitations issues

relating to adopted children.

i. Probate Code

Section 40 and Family Code Section

162.507 set out the rights of adopted

children.

ii. In Little v. Smith,

943 S.W.2d 414 (Tex. 1997), an

adopted child discovered in 1989 the

identities of her biological mother and

grandmother. She learned that both

were dead and that her biological

mother (died in 1969) had predeceased

her grandmother and that her biological

grandmother had died in 1982.

iii. In 1991, the

adopted child tried to make a claim after

the grandmother’s estate had been

distributed and closed. The Texas

Supreme Court said that the discovery

rule did not apply. The court reasoned

that the rights of an adopted child were

trumped by the need for finality of

probate proceedings and the need to

maintain confidentiality of adoption

records. Id. at 418-20.

l . Additional Limitations

issues for children without a

presumed father.

i. See the discussion

of Frost National Bank v Fernandez,

supra.

ii. Children whose

father’s paternity have not been

established in modern times are

sometimes referred to as nonmartial

children, or children both outside of

wedlock. The Family Code refers to

such children as “children without a

presumed father. TEX. FAM. CODE §

160.204.

iii. For inheritance

purposes, children whose paternity is

established or presumed under Family

Code §160.204 shall inherit from that

father. TEX. PROB. CODE §42(b).

Children who do not have a presumed

father may petition the probate court for

a determination of the right to inherit.

iv. According to case

law, there is a four-year statute of

limitations for heirship proceedings. For

example, in Cantu v Sapenter, 937

S.W.2d at 553, the San Antonio Court

held that the four-year statute of

limitations barred an heirship claim.

v. In Turner v. Nesby,

848 S.W.2d 872, 876-78 (Tex.App.--

Austin 1993, no writ), the Austin Court

held a bill of review filed more than

seven years after heirship judgment was

barred and not available to a non-

marital child. According to the court, the

statute of limitations began to run when

the judgment was entered, not later

when the legislature expanded the

statute. Id. at 878. The court reasoned

that the need for finality of judgments

was key. Id.

vi. While these

decisions, and York supra, are not

favorable to children without a

presumed father, there is a substantial

constitutional overlay that has to be

considered. See Trimble v. Gordon,

430 U.S. 762 (1977).

vii. Also see cases

discussed under Limitations issues

relating to heirship proceedings, supra.

m . Limitations issues

involving void marriages.

i. At death, if there is

no action pending to have a marriage

declared void because of incapacity, a

person has one year after the death of

one of the parties to the marriage to

bring an action to declare the marriage

void. TEX. PROB. CODE §47A. This

section was added in 2007. Before this

statute, upon death there was no

procedure for setting aside the

marriage. The statute was in response

to numerous cases of care giver abuse

where the caregiver would marry an

elderly person and even keep it a secret

until death.

ii. Johanson in Texas

Probate Code Annotated after Section

47A details one egregious example of

this behavior.

n . Limitations issues with

common law marriages. A n

action to establish a common law

marriage must be brought within two

years after the date the parties separate

or the death of one. TEX. FAM. CODE

§2.401(b); see Amaya v. Oravetz, 57

S.W.3d 581, 583-84 (Tex.

App.—Houston [14th Dist. 2001, pet.

denied).

o . Limitations issues

relating to claims against an estate.

Because the statute of limitations

applicable to claims against an estate

are some of the shortest in Texas

jurisprudence, they are also worth

noting here.

i. Unsecured

Creditors: 4 Month Notice. For

unsecured claims, there is s 4-month

barring statute. A personal

representative may give notice to

unsecured creditors pursuant to Section

294(d) of the Texas Probate Code.

That notice, if properly given, requires

the creditor to present its claim within

four months or the claim will be barred.

A guardian may send a similar notice

under Probate Code § 784(d).

ii.Secured Creditors.

For secured creditors, there is an

election. Under Section 295, the

personal representative must give

certified mail notice to all secured

creditors of the issuance of letters

testamentary or of administration.

Within four months of receiving the

notice, or six months from the date

letters or granted (whichever is later, the

creditor must make an election for their

claim to be “matured secured” or

“preferred debt and lien” under Section

306.

(1)Election.

Section 306(b) says that if they do not

timely make that election, they are

treated as a “preferred debt and lien

holder under Section 306(a)(2)

(2)Preferred

Debt and Lien. A “preferred debt and

lien” means the creditor is entitled to

foreclose on his collateral, but cannot

proceed against the estate for any

deficiency. This is best illustrated in the

case of Cessna Finance Corp. v.

Morrison, 667 S.W.2d 580 (Tex.App.--

Houston [1 Dist.] 1984, no writ). In that

case, the collateral was a Cessna

airplane that crashed in South America.

The creditor elected preferred debt and

lien status and much to its surprise was

only entitled to go to South America and

pick up the airplane. It had no right to

pursue any other claims or deficiencies

against the estate. Id. at 583-84.

(3)Matured

Secured “Matured secured” means the

creditor subordinates its rights in the

collateral to a Class 3 claim. That is, the

proceeds from the collateral will first go

to pay funeral and last illness expenses

(Class 1) and expenses of

administration (Class 2). Then the

creditor gets what is left from the

proceeds of the sale of the collateral. If

that is not sufficient to pay the creditor in

full, it is a Class 8 unsecured for any

deficiency.

(4)Usual

Election. Because most creditors are

reluctant to have their claims be

subordinate to administrative expenses

(which includes lawyers fees), they tend

to take their collateral (preferred debt

and lien).

(5)Deemed

Election. If the creditor does not make

an election within four months of

receiving notice, he is deemed to have

elected “preferred debt and lien” status.

iii. Tolling of claims

in the Probate Code. There is a tolling

provision on the statute of limitations

relating to claims. Section Probate Code

§ 299 states that the presentment of a

claim or the filing of a suit tolls any

statute of limitation.

iv.Liquidated claims

in dependent administrations. In

dependent administrations, claims for

liquidated amounts have to go through a

specific process.

(1)4 Months.

First a creditor has the four months

problem arising from Section 294(d) if

they receive notice from the

administrator.

(2)30 Days.

First, once the creditor makes a claim,

the personal representative has 30 days

to allow or reject the claim. TEX. PROB.

CODE § 309. If the claim is allowed, it

goes to the court for approval.

(3)90 Days. If

the claim is rejected, the creditor has 90

days to file suit. TEX. PROB. CODE §

313. If suit is not filed within 90 days

the claim is barred. TEX. PROB. CODE §

313. If the representative does not act

on the claim within 30 days, it is

deemed to have been rejected and the

90 days begins to run.

p . Foreclosures and

dependent administrations.

i. Once a debtor dies,

the rights of a secured creditor change.

If a secured creditor forecloses after the

death of the debtor but before any

administration is taken out, a

subsequently appointed administrator

may set the foreclosure aside, Pearce v.

Stokes, 155 Tex. 564, 291 S.W.2d 309,

311-12 (1956). Only four years after the

decedent’s death does such a

foreclosure become final. Wiener v.

Zweib, 105 Tex. 262, 141 S.W. 771

(1912); see 18 WOODWARD & SMITH,

TEXAS PRACTICE: PROBATE AND

DECEDENTS’ ESTATES § 921. As a result,

the only safe procedure for a secured

creditor is to apply for an administration

of the decedent’s estate.

ii. After the

establishment of an administration, any

non judicial foreclosure is void, Pearce

v. Stokes, supra.

q . Foreclosures and

independent administrations. In an

independent administration, the rights of

the creditor do not change as

dramatically. As distinguished from a

dependent administration, a non judicial

foreclosure can occur before or during

an independent administration and not

be subject to set aside, Pearce v.

Stokes, supra, and Pottinger v.

Southwestern Life Ins. Co., 138 S.W.2d

645, 647-48 (Tex.Civ.App.–Waco 1940,

no writ). If matured secure status has

been elected, there is no foreclosure

available. If preferred debt and lien has

been elected, then the creditor may

foreclose without judicial permission if

there is a default. See “Claims

Procedures in Probate and

Guardianship,” Schwartzel 1996

Advanced Estate Planning and Probate

Tab D and “Handling Claims Against

Decedent’s Estates,” Horrigan, 1997

Advanced Estate Planning and Probate

Tab K.

r . Limitations issues

relating to contracts for bequests.

The statute of limitations on breaches of

contract to make a bequest does not

begin to run until the death of the

decedent. Seale v. Muse, 352 S.W.2d

534, 538 (Tex.Civ.App.--Dallas 1961,

writ ref’d n.r.e.).

s . Statutory bill of review

proceedings. In addition to the

equitable bill of review which applies to

all civil cases, the Probate Code has

some specialized statutory bills of

review.

i. Section 31 of the

Texas Probate Code, allows an

application for a bill of review at any

time up to two years from the time an

order is entered. The petitioner must

prove a meritorious position, some

wrongful act by the other party and that

the petitioner was not negligent.

As contrasted with

Section 93 below, Section 31 does not

set out any exceptions to the two year

limit.

In Power v

Chapman, 994 S.W.2d 331 (Texarkana

1999, no writ), Power learned within two

years about the probate of his wife’s

will. However, he did not bring an action

to set it aside until more than two years

after the order admitting it to probate

and within two years of learning of the

probate and less than four years from

the probate.

Then he brought his

action under Section 31 not Section 93.

The trial court

poured him out and the court of appeals

affirmed saying

“Power argued that he

brought suit within two years of

discovering that he had been

defrauded by the appellees. At

the time Power filed suit,

limitations had run on the

statutory bill of review and he

was not entitled to an equitable

bill of review because he failed to

pursue his legal remedies...”

ii. Section 93 provides

that a probated will can be challenged

within two years of the date the order

was entered. In addition, a will may be

challenged within two years of the

discovery of any fraud or forgery or two

years after an incapacitated person has

their disabilities removed.

iii. And as discussed

above, there is a special four year bill of

review provision in proceeding to

determine heirship under Section 55(a).

iv. In the case of In re

Vance, No. 10-09-00177, 2009 WL

4574896 (Tex.App.--Waco 2009), the

court lists the possible remedies.

2 . INCAPACITY AND

GUARDIANSHIPS Guardianships do

not have the limitations that you find in

decedent’s estates. Obviously, a

guardianship can be sought at any time

when a person is incapacitated or a

minor.

a . Guardian Appointed.

Once an appointment of a guardian is

made, however, there are deadlines that

have to be met and they deviate slightly

from probate proceedings.

i. Bond and Oath. As

with probate estates, the guardian must

take his oath and file his bond within 20

days of the order of appointment. TEX.

PROB. CODE § 701.

ii.Inventory. The

inventory however, must be filed within

30 days of qualifying TEX. PROB. CODE §

729. Note that this is a recent change in

the statute. Before 2003, a guardian

had 90 days to file an inventory, just like

probate. The current 30-day deadline

allows the probate court to know as

soon as possible if the bond was

sufficient and what assets were

available for the care of the ward.

iii. Allowance. If an

allowance was not established in the

order appointing the guardian, the

guardian must seek a monthly

allowance within 30 days of qualifying.

TEX. PROB. CODE §776.

iv.Investments. The

guardianship code also provides certain

investment parameters and deadlines

for the guardian in managing existing

assets of the ward. The guardian may

retain, without court approval, the

assets of the ward that were on hand at

the time of appointment for up to one

year without any duty to diversify and

without liability for any depreciation or

loss. TEX. PROB. CODE §855A(a). The

guardian may seek an order of the court

allowing continued retention after that

the one year period. TEX. PROB. CODE

§855A(b).

Within 180 days of

qualification, the guardian must have

the estate’s assets invested pursuant to

Section 855(b) (the safe harbor

provision) or submit a proposed

investment plan. TEX. PROB. CODE

§855B.

b . Incapacity tolls the

statute of limitations. As everyone

knows, incapacity tolls the statutes of

limitations. As it turns out, this is a

general rule.

i. Personal Actions.

As it relates to personal actions, Section

16.001 of the Civil Practices and

Remedies Code addresses limitations

on incapacitated persons.

(1) If a person is

“under a disability” when a cause of

action accrues, the period of disability is

not included in the limitations period.

TEX. CIV. PRAC. & REM. CODE

§16.001(b).

(2) Two

examples: 1) if a sixteen year-old child

is injured in a car accident, limitations

begins when the child turns eighteen;

and 2) if a minor or adult is injured and

never regains capacity, limitations never

runs. See infra “The effect of the

appointment of a guardian on

limitations.” This only applies to

limitations of personal actions arising

under Subchapter A of Chapter 16

(16.001 through 16.012).

The statute also

has some qualifications. A disability

arising after the limitations period has

started does not suspend the statute.

TEX. CIV. PRAC. & REM. CODE

§16.001(d). Disabilities also cannot be

stacked to extend a limitations period.

Id. at §16.001(c).

ii.Real Estate.

Sections 16.021 et seq sets out the

limitation and tolling provisions for

actions involving real estate., Civil

Practices and Remedies Code §16.022

sets out the tolling rules when there is a

disability.

(1) The statute

defines persons who are under a

disability as minors, incapacitated

persons and persons serving in the

armed forces during a time of war. The

statute is tolled for these persons if the

claim or defense is based on title to real

property. For the tolling provision to

operate, the person has to be under a

disability at the time title vests or

adverse possession commences. If

tolled, the statute does not run during

the period of disability.

(2) With two

exceptions, the statute begins to run

when the disability is lifted.

(a) First,

regardless of a disability, an action must

be brought within 25 years to recover

real estate where another is asserting

title by adverse possession. TEX. CIV.

PRAC. & REM. CODE §16.027.

(b)

Second, regardless of a disability, an

action must be brought within 25 years

where another person is claiming by

adverse possession coupled with a

deed. TEX. CIV. PRAC. & REM. CODE

§16.028.

c . The effect of the

appointment of a guardian on

limitations.

i. There are several

older cases that say the appointment of

a guardian does not start the statute

running. Neblett v. Valentino, 127 Tex.

279, 92 S.W.2d 432, 434-35 (1936);

Collins v. McCarty, 68 Tex. 150, 3 S.W.

730, 731-32 (1887); Texas Utilities Co.

v. West, 59 S.W.2d 459, 460-61 (Tex.

Civ. App.--Amarillo 1933, writ ref’d), and

Brown v. Midland Nat. Bank, 268 S.W.

226, 228 (Tex. Civ. App.-- El Paso

1924, writ ref’d).

ii. However, a recent

Texas Supreme Court case may hint at

a guardian discovery rule. In Yancy v.

United Surgical Partners International,

Inc. 236 S.W.3d 778 (Tex. 2007), the

primary issue was the Open Courts

Doctrine not directly a statute of

limitations issue. The plaintiff’s mother

was appointed guardian and then

brought an action against some but not

all of the possible defendants. More

than 2 years after the incident occurred

(and she was appointed) the guardian

joined additional defendants. Id. at 780.

iii. In analyzing the

Open Courts Doctrine, the Court states

that the guardian knew of the Ward’s

“...condition and retained a

lawyer well within the limitations

period. On this record, there is no

fact issue establishing that Yancy

(on Yates's behalf) did not have a

reasonable opportunity to

discover the alleged wrong and

bring suit within the limitations

period or that she sued within a

reasonable time after discovering

the alleged wrong.” Id. at 786.

d . Creditors The rules on

creditors in guardianships are very

similar to those set out above for

dependent administrators. There is a

similar provision for giving notice to a

secured creditor in a guardianship,

Section 784(a).

i . Election: Secured

Creditor. In Section 793 the secured

creditor has to state whether he wants

matured secured or preferred debt and

lien status. If he does not make an

election, he is deemed to have elected

preferred debt and lien.

i i . 120 Day Notice. A

guardian is required to give notice to

unsecured creditors, Section 784(b).

And if the creditor does not assert a

claim within 120 days, that claim will be

barred. Section 784(e). This is similar to

Section 294(d) for decedent’s estates.

However, notice that this provision is

mandatory not permissive and that it

uses 120 days rather than 4 months.

i i i . 90 Day Barring

Statute. Further, if a creditor makes a

claim and it is rejected, whether by the

guardian or by operation of law after 30

days, and the creditor does not file suit

within 90 days, the claim is barred.

Section 800.

e . Bill of Review. Section

657 is the guardianship counter part to

Section 31 bill of review for decedent’s

estates. It gives a person two years

from the date of a “decision, order, or

judgment” to bring an action to set it

aside. It goes on to give a person two

years after the removal of their

disabilities to file a bill of review.

3 . NEXT FRIEND

a. Statute of limitations

issues also arise when a suit is brought

by a next friend. The bringing of an

action by the next friend of a minor, and

the dismissal thereof, did not cause

limitations to commence to run against a

subsequent suit on the same cause of

action, since it does not remove the

disability. The bringing of an action by a

father as next friend for an injury to his

son does not create the relation of

guardian and ward, so as to start the

running of limitations against the minor.

Galveston, H. & S.A. Ry. Co. v.

Washington, 25 Tex.Civ.App. 600, 63

S.W. 538, 540-41 (1901, no writ).

b. Similarly, a statutory cause

of action for death of a father was,

according to the court, a property asset

belonging to minor children, and was

not barred because not brought within

two years after appointment of guardian,

when children were still minors at time

of trial. Texas Utilities Co. v. West, 59

S.W.2d 459, 461

(Tex.Civ.App.—Amarillo, 1933, writ

ref’d).

4 . TRUSTS

a.General. While

many of the limitation issues concerning

trusts are the same as in decedent’s

estates and guardianships, there are

important differences. First, there is no

court participation initially or thereafter

unless someone specifically invokes the

jurisdiction of the court. Also, trusts are

apt to run for a very long time as

compared to estates. Thus, limitations

issues may be triggered years in the

future.

b.Removal: No

Limitation. In Ditta v Conte,298

S.W.3d 187, (Tex. 2009), the Texas

Supreme Court held “...that no statutory

limitations period restricts a court’s

discretion to remove a trustee.” Id. at

187. There were further proceedings in

the court of appeals, Ditte v. Conte,

____ S.W.3d ______ 2010WL1053097

(Tex.App.-Houston [1 Dist.] Mardall

2010, no. pet. h.).

i. Ditta, a court

appoint guardian of the estate, applied

to remove the trustees more than four

years after the offending events and

more than 4 years after he was

appointed guardian.

ii. The Ward and her

husband created the trust. After he died

she was the trustee along with her two

children. It was subsequently discovered

that the son was not properly

administering the trust and litigation

ensued.

iii. In August of 1998,

Ditta as guardian sought the

appointment of a receiver. The court

appointed a successor temporary

trustee and suspended the powers of

the children as trustees.

iv. In June 2000, the

temporary trustee filed an accounting

from the date of dad’s death to

December 1999. That accounting

revealed that both son and daughter

had obtained trust funds for their own

benefit. A settlement of those issues

occurred in January 2001 in which the

obligation was recognized.

In January 2003, son was

removed as a trustee, and in April of

2004, Ditta applied to remove daughter

as trustee. The trial court removed her,

but the court of appeals reversed,

concluding that § 16.004 of the CPRC

applied.

v. The Texas

Supreme Court reversed and

remanded, concluding that there was no

statute of limitations Id. at ______.

vi. In reaching its

result, the Court observed that the

trustee position is a “status.” The court

then analogized a removal action to a

divorce sought on the basis of cruelty

and adultery. Id. at *3-4. According to

the court, marriage is a status and an

action for divorce does not have to be

brought within any statutory deadline.

The Court further analogized

removal to a real property action to

remove a cloud on title. Id. at *4.

vii. The Court

concluded that the daughter breached

her duties and A...her role as trustee was

compromised due to her indebtedness

to the Trust and her tenuous

relationship with her...@ mother and

brother. Id. at *4. According to the

Court, removal actions A...exist to

prevent the trustee from engaging in

further behavior that could potential

harm the trust.@ Id. at *4. A trustee=s

prior conduct can be indicative of future

conduct.

viii. The Court did not

address laches, the discovery rule, or

the impact of the 2001 settlement

agreement.

c.Trust Contest.

Like a will, a trust can be challenged

because of lack of capacity, undue

influence, improper execution etc. See

“Contesting Inter Vivos Trusts,” T. Jack

Challis, ACTEC Notes Vol. 26 No. 3 at

221 (Winter 2000).

i. Unlike a will,

however, there is no direct statutory

guideline on when this must be done.

Section 16.051 CPRC is the four year

residual limitations period applying to

actions not otherwise covered by a

statute of limitations. Section 16.051

applies to contracts. Seureau v.

ExxonMobil Corp., 274 S.W.3d 206, 227

(Tex. App.--Houston [14th Dist.] 2008,

no pet.). As we have seen, it covers

heirship determinations, Cantu v.

Sapenter, supra.

ii. Presumably it

covers contests of the validity of a trust

as well. If so, some notice or discovery

of the existence of the trust should be

necessary to trigger the statute.

iii. While there is no

Texas authority on point, there is some

authority nationally. BOGERT ON TRUSTS

discusses at Section 950 including the

paucity of specific statutes on trust

contests. Section 604 of the Uniform

Trust Code provides for a 3-year

limitation period on contests of

revocable trust that begins to run from

the date of the settlor=s death. That

section shortens that time to 120 days

from the time notice is given by the

trustee. The Uniform Trust Code makes

no reference to the time frame for

challenging an irrevocable trust. When

the Texas legislature cherry picked the

Uniform Trust Code it did not import

these limitation provisions into Texas

law.

iv. Much of the case

law in Bogert and elsewhere applies to

trustees who have repudiated a trust

and the beneficiaries are attempting to

enforce it. Similarly, most of the trust

cases cited under §16.051 are

repudiation cases. See, e.g.

Courseview v. Phillips Petroleum Co.,

158 Tex. 397, 312 S.W.2d 197, 205

(1958) (limitations does not begin to run

in favor of a trustee and against the

cestui until the latter has notice of a

repudiation and there is no duty to

investigate until the cestui has

knowledge of facts sufficient to incite

inquiry).

v. There are also

numerous cases under §16.025 of the

CPRC that say limitations for trusts

holding real estate do not start to run

until there has been a repudiation.

d . Limitation in Venue.

While this may stretch any definition of

limitations, it is worth noting that for a

single non-corporate trustee, an action

shall be brought in any county in which

the trustee resided for the four years

preceding the filing of an action, TEX.

PROP. CODE § 115.002(b)(1), or in the

county in which the situs of

administration was maintained at any

time in the four years preceding the

filing. TEX. PROP. CODE § 115.002(b)(2).

If there are multiple

trustees or a corporate trustee, the

action shall be brought in any county in

which “situs of administration is

maintained or has been maintained” for

the last four years. These provisions

were added in 1999. Previously the test

was the principal office of the trust.

There are no Texas cases on what the

constitutes “situs of administration.”

e . No shortening of

limitations periods: Mandatory

Rules. Section 111.0035 of the Trust

Code (the Texas Property Code) sets

out default and mandatory rules for

trusts. Generally, the provisions of a

trust trump the rules set out in the Trust

Code. And, to the extent that the trust

does not speak to an issue the

provisions of the Trust Code control.

TEX. PROP. CODE § 111.0035(a).

However, Section

111.0035(b) sets out those matters, the

mandatory rules, which cannot be

overridden by the trust instrument. One

of those rules is Section 111.0035(b)(3).

It provides that, “ . . .the terms of the

trust may not limit . . . the periods of

limitation for commencing a judicial

proceeding regarding a trust.”

5 . BREACHES OF FIDUCIARY

DUTY

a . General. Section

16.004(a)(5), which was enacted in

1999, sets a four year statute of

limitations for breaches of fiduciary duty.

Section 16.004a(b) sets a four statute

for bonds, personal representatives and

guardians. All of this illustrates the

importance of full disclosure and notice.

The preference is for judicial releases

over the usual releases.

b . Older Cases. Section

16.004(a)(5) of the CPRC requires that

an action for breach of fiduciary duty

must be brought within four years of the

time the action accrues.

i. Because of the

relationship between the trustee and the

beneficiary, the courts have applied

various rules for when the cause of

action accrues.

ii. Older cases

generally refer to repudiation. Later

cases say when a beneficiary knew or

should have known and that this is

especially true in a fiduciary relationship

where one party is entitled by law to rely

on another.

c . Cases Under the Statute.

Although §16.004(a)(5) was enacted 10

years ago, it has only been cited in

three cases: Conte v. Ditta,

287S.W.3d28 (Tex. App. Houston [1st

Dist.] 2007), rev’d, 298S.W.3d187

(Tex.2009); Crull v. Rhodes, No. 02-04-

235-CV, 2005 WL 737473 (Tex.App.--

Fort Worth March 31, 2005, no pet.); US

MCT, Inc. v. Brodsky, No. 05-98-00204-

CV, 2001 WL 1360301 (Tex.App.--

Dallas November 07, 2001, no pet).

d . Conte, Court of Appeals.

While the supreme court in Ditta v.

Conte, supra, concluded that there is no

statute of limitations for removal actions

and reversed, the court of appeals’

opinion provides an excellent rendition

of what is probably the status of the

discovery rule in fiduciary matters:

“Statute of limitations serve to

compel the assertion of claims

within a reasonable period during

which the evidence is fresh in the

minds of the parties and

witnesses. Price v. Estate of

Anderson, 522 S.W.2d 690, 692

(Tex.1975). The discovery rule

defers accrual of a cause of

action until the plaintiff knew or,

exercising reasonable diligence,

should have known of the facts

giving rise to the cause of action.

Trinity River Auth. v. URS

Consultants, 889 S.W.2d 259,

262 (Tex.1994). However, the

discovery rule applies only in

certain limited circumstances.

See Computer Assocs. Int'l, Inc.

v. Altai, Inc., 918 S.W.2d 453,

456 (Tex.1996). Generally,

application has been permitted in

cases where the nature of the

injury incurred is inherently

undiscoverable and the evidence

of the injury is objectively

verifiable. See id. The

requirement of inherent

undiscoverability recognizes that

the discovery rule exception

should be permitted only where

“it is difficult for the injured party

to learn of the negligent act or

omission.” Willis v. Maverick, 760

S.W.2d 642, 645 (Tex.1988) This

is particularly true in the context

of a fiduciary. ee ltai, 918 S.W.2d

at 456 Fiduciaries are presumed

to possess superior knowledge,

and the injured party is presumed

to possess less information than

the fiduciary. See id. While a

person owed a fiduciary duty has

some responsibility to ascertain

when an injury occurs, it may be

said that the nature of the injury

is presumed to be inherently

undiscoverable. Courseview, Inc.

v. Phillips Petroleum Co., 158

Tex. 397, 312 S.W.2d 197, 205

(1957). The issue in a breach of

fiduciary duty case is, thus, when

the plaintiff knew or should have

known, with the exercise of

reasonable diligence, of the legal

injury giving rise to the right to

sue. In re Fawcett, 55 S.W.3d

214, 219 (Tex.App.-Eastland

2001, pet. denied)”

Conte v. Ditta, 287S.W.3d at 34-35.

e . Bonds: Executors,

Administrators and Guardians

Statute. Section 16.004 says actions

against executors, administrators and

guardians and their bonding agents,

must be brought within four years of

their death, resignation, removal or

discharge.

f . Accountings and

Releases:

i. Guardians and

Dependent Administrators. The

Section 16.004 provisions are shortened

with the proper notice and pleading of a

final in court supervised proceedings.

For an excellent treatment of this

problem see Joyce Moore, “Releases

and Receipts and Judicial Accountings,”

Chapter 27, 2008 Advanced Estate

Planning and Probate Course.

ii. Independent

Executors. Before 1999 there was no

clear means for an independent

executor to obtain a discharge or

release.

(1) In particular,

section 151 (d) stated that an executor

could require a receipt from a

beneficiary but “...shall not require a

waiver or release from a distributee as a

condition of delivery of property...”

(2) In 1999, the

State legislature enacted Sections 149D

through 149G. This now allows a

means for an independent executor to

obtain a judicial discharge of liability for

all matters that are “fully and fairly

disclosed.” Section 149D.

iii. Trustees. A court’s

approval of a final account and order

closing estate may result in a discharge

of the personal representative. But that

may not be a release of the fiduciary or

his bondsman. Texas State Bank v.

Amaro, 87 S.W.3d 538, 544-45 (Tex.

2002). At best it is only a release to the

extent fo “fair and full” disclosure. To

that extent that the approval of the

accounting will represent a bar is

dependent upon notice and res judicata.

See Coble Wall Trust Co. Inc. V.

Palmer, 859 S.W. 2d 475, 481

(Tex.App. – San Antonio 1993, writ

denied).

6 . LACHES A related issue to the

statute of limitations is laches. There is

very little law in Texas applying laches

to trust litigation. Most of it is old and

deals with repudiation of a trust by a

trustee.

a . Two Uses. Bogert on

Trusts, 2 , sets out two bases for

laches at Section 948.

i. First, when there is

no applicable statute of limitations,

laches will bar a beneficiary when he

has “inexcusably” delayed and it has

caused prejudice to the trustee. Bogert

gives examples of delay in complaining

about sales or mortgages of trust

property. (Footnotes 4 and 5 at page

583).

ii. Second, on page

584 Bogert notes that even if there is a

statute of limitations, and that time has

not run, the courts have sometimes

granted the defense of laches.

b . Applies to Settlors and

Trustees as well as Beneficiaries. At

footnote 6 and 7 on page 583, Bogert

notes that laches can also apply to

settlors or trustees.

c . Affirmative Defense.

Laches is a frequently pled as an

affirmative defense that must be pled by

the defendant. See Tex. R. Civ. P. 94.

As stated in Bogert, the theory in Texas

underlying laches is that the staleness

of a claim will prejudice a defendant if

the claim is not barred. Stevens v.

State Farm Fire & Cas. Co., 929 S.W.2d

665, 672 (Tex. App.—Texarkana 1996,

writ denied).

d . Elements. Laches is not

mere delay; it is delay that works a

disadvantage to another. Ross’ Estate

v. Abrams, 239 S.W 705, 709 (Tex. Civ.

App.—San Antonio 1922), aff’d, 250

S.W. 1019 (Tex.Comm’n App. 1923,

judgment adopted). There are two

elements that must exist for laches to

bar a claim:

i. an unreasonable

delay by one having a legal or equitable

rights in asserting those rights and

ii. a good faith change

of position by another (generally the

trustee) to her detriment because of the

delay.

Rogers v. Ricane Enters.,

Inc., 772 S.W.2d 76, 80 (Tex. 1989); In

re Jindal Saw Ltd., 264 S.W3d 755, 760

(Tex. App.—Houston [1st Dist.] 2008,

orig. proceeding). Delay alone is not

enough to establish laches, there must

be injury or prejudice. Tribble &

Stephens Co. v. RGM Constructors,

L.P., 154 S.W.3d 639, 669 (Tex.

App.—Houston [14th Dist.] 2004, pet.

denied). Laches is a question of fact

that must be determined by considering

all the circumstances in a particular

dispute. Tribble, 154 S.W.3d at 669.

The defendant bears the burden of

proving laches. City of Fort Worth v.

Johnson, 388 S.W.2d 400, 403 (Tex.

1964).

e . Relation to Statute of

Limitations. Laches is generally not

appropriate when the controversy is one

to which a statute of limitations applies.

Graves v. Diehl, 958 S.W.2d 468, 473

(Tex. App.—Houston [14th Dist.] 1997,

no pet.). In certain exceptional

circumstances, however, laches may

bar a claim in a period shorter than the

applicable statute of limitations.

Graves, 958 S.W.2d at 473. For

example in Stevens v. State Farm, the

carrier asserted laches against the

policy holder’s claim for additional

money for damages to home. The claim

was made within the statute of

limitations but after the policy holder

razed his home following a fire and built

a new one. The court of appeals

concluded that the summary judgment

evidence did not conclusively establish

laches. 929 S.W.2d at 672.

f . Removal. The Texas

Supreme Court left open the possibility

of the application of laches in a removal

action. See Ditta v. Conte, 298 S.W.3d

187, 192 (Tex. 2009). In that case, the

Court held that removal of a trustee is

not subject to a limitations analysis. Id.

The Court, however, expressly did not

“pass on whether equitable defenses,

such as laches or estoppel, may apply

to removal actions.” Id. at n.27.

g . Old Repudiation Cases.

In cases before the enactment of the

Trust Code statute of limitations, courts

held that laches did not bar a

beneficiary from suing a trustee until the

trust had been clearly and unequivocally

repudiated and the beneficiary had

notice of the repudiation. Murphy v.

Johnson, 54 S.W.2d 158, 164 (Tex. Civ.

App.—Austin 1932, writ dism’d). The

same applied with a resulting trust. The

beneficiary of a resulting trust is not

barred from enforcing a trust merely by

delay. Atkins v. Carson, 467 S.W.2d

495, 501 (Tex. Civ. App.—San Antonio

1971, writ ref’d n.r.e.). It is only where

the trustee under the resulting trust

repudiates the trust and the beneficiary

has knowledge of the repudiation that

the beneficiary may be barred by laches

from enforcing the trust. Id.

h . Restatement. While

Texas authority on this issue is limited,

the Restatement of Trusts provides

guidance.

i . Factors Considered. A

beneficiary may lose her right to sue a

trustee for breach of trust because of

laches. As set out in the Restatement

of Trusts, in determining if a beneficiary

is barred by laches in pursuing a breach

of trust by the trustee, the court will

consider among others the following

factors:

i. the amount of time

between the commission of the breach

of trust and the bringing of suit;

ii. whether the

beneficiary knew or had reason to know

of the breach of trust;

iii. whether the

beneficiary was incapacitated;

iv. whether the

beneficiary has a present or future

interest;

v. whether the

beneficiary had complained of the

breach of trust;

vi. the reasons for the

delay in suing;

vii. change of position

by the trustee, including loss of rights

against third persons;

viii. the death of

witnesses or parties;

ix. hardship to the

beneficiary if relief is not given;

x. hardship to the

trustee if relief is given.

Restatement (Second)

Trusts §219.

j . Damages vs

Enforcement. While laches may bar a

beneficiary’s suit for damages against a

trustee, laches does not preclude the

beneficiary from enforcing the trust.

Restatement (Third) Trust §98.

k . Third Parties. In addition,

laches may apply against a trustee who

fails to timely pursue an action against a

third party. The laches that applies to

the trustee also bars the action by the

beneficiary unless the third party

knowingly participated in the breach of

trust and the beneficiary was not himself

guilty of laches. Restatement (Second)

Trusts §327.