Fiduciary duty

5 July 2016

Estoppel does not prevent beneficiary from pre-suit discovery

The Fort Worth Court of Appeals decision in In Re Meeker involves two important issues for probate litigators: entitlement to pre-suit discovery and estoppel based on acceptance of benefits. Both issues arise fairly regularly in will contests. Texas Rule of Civil Procedure 202 provides a limited method to obtain discovery of facts before actually filing a suit.  It is a useful tool when a litigant suspects they have a valid claim, but wish to investigate further before actually filing suit. There are some exacting requirements of the rule and the discovery tools are more limited than would be allowed in […]
20 June 2016

Garrett v. First State Bank of Central Texas: No informal fiduciary relationship

In Garrett v. First State Bank of Central Texas, the Waco Court of Appeals considered a dispute over the ownership of a decedent’s account. The bank filed an interpleader when faced with competing claims to the account proceeds, between the decedent’s estate and his caregiver. The decedent added the caregiver as a signatory to his money market account. After decedent’s passing, the caregiver claimed he wanted the account to pass to her after his death. But the trial court ruled the account documents the decedent signed did not make her the survivorship beneficiary. There was a dispute as to whether […]
29 April 2015

Court of appeals upholds removal of executor

In Estate of Montemayor, the San Antonio Court of Appeals considered a challenge to the probate court’s removal of an independent executor.  Such removals have become more difficult since the Texas Supreme Court’s opinion in Kappus v. Kappus. The probate court removed the executor because it found that, after over three years, he had not effectively pursued resolution of the estate.  That alone is not necessarily grounds for removal.  But the sole asset of the estate was a house and lot. The executor moved into the house and told one of the beneficiaries that “he was going to keep the […]
28 January 2015

Does the holder of a POA owe a general fiduciary duty to the principal?

Under Texas law the holder of a power of attorney, as an agent,  owes the principal a fiduciary duty.  In situations involving a transaction between the agent and the principal, Texas law closely scrutinizes the transaction and places the burden on the agent to prove the fairness of the transaction to the principal. But what if the agent doesn’t actually use the POA as part of the transaction in question?  Does the burden still fall on the agent to prove the fairness of the transaction and show that full disclosure was made to the principal? Texas courts typically answer yes. […]
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