TBJ January 2022
2021: The Year in Review
Estate Planning and Probate Law
Written by Gerry W. Beyer
Rule Against Perpetuities Texas Constitution Article I, § 26 adopts the common law version of the rule against perpetuities. Extensive revisions to Texas Property Code § 112.036, enacted by the 2021 Legislature, may operate to extend the time period to 300 years from the effective date of a trust, which permits the creation of dynasty trusts in Texas.
Here is a summary of these revisions:
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The “effective date” of a trust is the date it becomes irrevocable (e.g., because the settlor of a revocable trust dies or the settlor expressly made the trust irrevocable).
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If the effective date is on or after September 1, 2021, the interest must vest (or not vest) not later than 300 years after the effective date of the trust.
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If the effective date is before September 1, 2021, the trust must vest (or not vest) “not later than 21 years after some life in being at the time of the creation of the interest, plus a period of gestation.” However, this restriction is inapplicable if the trust references Property Code § 112.036 for how the rule is to operate.
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Regardless of the rule’s applicable time period, the settlor may not require a real property asset to be retained by the trust (or not sold) for a period longer than 100 years.
The constitutionality of the 2021 amendments is subject to considerable debate.1
Foreign Language Wills The 2021 Legislature amended Texas Estates Code § 503.002 to provide that when a will and its accompanying judgment, order, or decree admitting it to probate is written in whole or in part in a language other than English and it is filed for record in a county where the testator’s real property was located, a correct English translation must also be filed. The accuracy of this translation must be sworn to before an officer authorized to administer oaths.
New Statutory Probate Court in Denton County Effective January 1, 2022, Denton County will have a second statuto
Acceptance of Benefits In Estate of Johnson,2 after accepting benefits under the testator’s will (a mutual fund worth over $143,000), the beneficiary contested the will, claiming that the testator either lacked testamentary capacity or was unduly influenced. The beneficiary sought to avoid the long-established rule that a person cannot accept benefits under a will while contesting its validity by showing that the benefits she accepted are less than she would receive by intestacy (over $450,000) if the will contest succeeded. The trial court rejected this argument and dismissed her contest for lack of standing. She successfully appealed to the 5th Court of Appeals in Dallas.
The Texas Supreme Court reversed and dismissed her lawsuit. The court held “that a contestant does not defeat an acceptance-of-benefits defense by showing that the benefit she accepted is worth less than a hypothetical recovery should her will contest prevail.”3 “Equity does not permit the beneficiary of a will to grasp benefits under the will with one hand while attempting to nullify it with the other.”4
Accordingly, before a beneficiary accepts property left to the beneficiary under a will, the beneficiary must make certain the beneficiary does not desire to contest the will in hopes of receiving a larger share via intestacy. The court recognized that the beneficiary’s acceptance of benefits must be voluntary so that “an opportunistic executor [cannot] offensively deny a would-be will contestant’s claim by partially distributing the estate to an unwitting beneficiary to avoid a will contest.”5
GERRY W. BEYER is the Governor Preston E. Smith Regents Professor of Law at Texas Tech University School of Law, where he teaches probate courses including wills and trusts, estate planning, and Texas estate administration. He is the editor in chief of the REPTL Reporter, the quarterly publication of the State Bar of Texas Real Estate, Probate & Trust Law Section.
