Tuesday, August 31, 2010
In In re Estate of Hoelzer, 310 S.W.3d 899 (Tex. App.—Beaumont 2010, pet. filed), after Step-mother died, Son was appointed as the successor independent executor of Father’s estate. He then filed a claim against Father’s estate on behalf of himself and his three siblings for reimbursement of funds Step-mother received as the result of asbestos litigation about twenty years ago. The probate court removed Son because the courts had previously determined that Son and his siblings were not creditors of their father’s estate and that any potential claims were time-barred. Thus, under Tex. Prob. Code § 149C, Son’s actions constituted gross misconduct and gross management as well as showing that he was about to misapply estate funds. Son appealed.
The appellate court affirmed explaining that there was sufficient evidence to show that Son’s actions were inappropriate under § 149C. All that was necessary was for the trial court to determine that sufficient grounds appeared to support the belief that Son has misapplied or is about to misapply property of the estate, that is, to pay a judgment-barred claim. It is not necessary for court to be absolutely certain that misapplication has occurred or may occur in the future.
Moral: An independent executor should not pay judgment-barred claims, especially to himself and his relatives.
Another issues was raised in the same case. Texas Probate Code § 149C provides that the court may remove an independent executor after the executor is cited by personal service to answer at a time and place fixed in the notice. This specific provision governs over Texas Rule of Civil Procedure 245 which requires at least a notice of 45 days. Thus, the Probate Court may require the executor to answer sooner than 45 days. In addition, the court held that service on the executor’s attorney by any method satisfies the personal service on the executor requirement. See Prob. Code § 33(f)(1).
Moral: An executor must read any service of process carefully to determine the time by when an answer is required and cannot rely on the general 45 day rule.