Fiduciary duty

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. […]
26 August 2014

Court finds designated executor unsuitable

In Gossett v. Beck, the Dallas Court of Appeals upheld the probate court’s determination that an indepedent executrix designated in a will was unsuitable and therefore disqualified to serve.  The basis of the probate court’s decision was a deed from the decedent to the proposed executrix of a house worth $850,000 for apparently no consideration.  Furthermore, the transfer was accomplished via a power of attorney. This sort of transaction sets off immediate alarms because of 1) a transfer via a power of a attorney; and 2) for no apparent valuable consideration in return. Another beneficiary claimed that the proposed executrix […]