ENFORCING BENEFICIARIES’ RIGHTS W ritten by

1 ENFORCING beneficiaries RIGHTSW ritten by: MARY C. BURDETTEC alloway, Norris, Burdette & Weber, PLLC3811 Turtle Creek Blvd., Suite 400 Dallas, Texas 75219(214) Bar of Texas34 ANNUAL ADVANCEDTHESTATE PLANNING AND PROBATE COURSEJune 23-25, 2010 San AntonioCHAPTER 8* The author expresses her appreciation and gratitude to Nikki Wolff for her invaluable assistance with the preparationof this C. BURDETTEC alloway, Norris, Burdette & Weber, PLLC3811 Turtle Creek Boulevard, Suite 400 Dallas, Texas 75219214-521-1520 214-521-2201 OF PRACTICEP robate, Trust and Fiduciary Litigation; Estate Administration; Guardianships, including ContestedGuardianships; and Wills and TrustsEDUCATIONJ uris Doctor Degree, cum laude, from Southern Methodist University School of Law 1982; Phi Delta Phischolastic honorary fraternity; Order of the Coif.

2 Notes and Comments Editor, Southwestern Law ReviewBachelor of Science Degree in Accounting, summa cum laude, from the University of Texas at Dallas 1978 PROFESSIONAL HISTORYA dmitted to the State Bar of Texas by the Supreme Court of Texas, November 1982 Calloway, Norris, Burdette & Weber, PLLC, Partner from 1994 to presentThompson & Knight, Tax and Estate Section, 1982-1994 (Shareholder from 1987)Board Certified Estate Planning and Probate Law - Texas Board of Legal SpecializationBoard Certified Tax Law - Texas Board of Legal SpecializationCertified Public AccountantChair of Probate, Estates & Trust Section, Dallas Bar Association 2003-2004 Council Member, Real Estate Probate & Trust Law Section, State Bar of Texas 2004-2008 Fellow, American College of Trust and Estate CounselMember, Advanced Estate Planning & Probate Planning Committee, State Bar of Texas Member.

3 Wills and Probate Planning Committee for The Center For American and International Law-3-Member, Texas Board of Legal Specialization Estate Planning and Probate Law Legal Assistant ExamCommission (1999-2004)Certified by the State Bar of Texas Under Probate Code Section 646 to serve as an Ad Litem in GuardianshipProceedingsNamed Texas Super Layer by Texas Monthly magazine from 2003-2010 Listed in The Best Lawyers in America from 2001-2009 Frequent speaker on matters involving probate, trusts, fiduciary law, guardianships and probate litigationMember, Dallas Bar Association, Probate, Trusts & Estates SectionMember, State Bar of Texas, Real Estate.

4 Probate & Trust Law Section-4-TABLE OF of Qualification of Settlement from Independent Prior to 15 from Agent Under to Estate Property In the Independent Release Trade Practices No Contest s Common Law Duty to Trust Code Code Accounting the Trust s Books and Accounting Tax s Duty to Make Distributions Subject to an Ascertainable Discretionary Absolute From of Trust of Principal and to Amount of from Income or Concerning Prudent Investor of at Inception of of of of Investment and Management (1)Duties When (2)Duty of (3)Avoidance of of (1) (2)Risk/Return (3)Cost (4) (5) to Adjust Between Principal and in Best Interest of Only Reasonable and to Resolve Without a Litigation Exoneration (1)Bad (2)Good (3)

5 Gross s Fee Trust Division or Termination of Uneconomic Voluntary Resignation of Trustee and Selection of No Contest of Actions and Beneficiary s 37 APPENDIX beneficiaries RIGHTS Chapter 8-6- ENFORCING beneficiaries the exalted legal position of the estateand trust beneficiary due to the legal duties owed tothem by their fiduciaries, these beneficiaries are oftenDavid rather than Goliath when it comes to enforcingtheir RIGHTS in connection with estates and factors contribute to this imbalance.

6 Thefiduciary holds the assets intended to benefit thebeneficiary and the authority over them. Thebeneficiary typically needs financial assistance and maylack financial management expertise. To provideflexibility, testators and settlors tend to give fiduciariesbroad powers and discretion, which the law most cases, these plans work extremely well,but when they do not, a beneficiary often facessubstantial obstacles in trying to enforce his legal beneficiary may lack the resources to obtain legaladvice, while the trustee can access assets intended forthe beneficiary to resist the beneficiary s efforts.

7 Thisarticle examines some of the more commoncircumstances that may affect the RIGHTS of an estate ortrust beneficiary and explores possible solutions thatmay avoid the high financial and emotional costs of full-blown fiduciary of WillA will is not effectual until probated. CODE 94. A beneficiary under a will has noproperty RIGHTS until the testator dies and the will isadmitted to probate. Hunter v. NCNB Tex. Nat l Bank,857 722 ( Houston [14 Dist.)]

8 ] 1993,thwrit denied). If a will is in the possession of a personwho has not promptly offered it for probate or isintentionally suppressing it, a beneficiary can compeldelivery of the will pursuant to Section 75 of the TexasProbate Code. Section 75 provides as follows:Upon receiving notice of the death of atestator, the person having custody ofthe testator s will shall deliver it to theclerk of the court which hasjurisdiction of the estate. On swornwritten complaint that any person hasthe last will of any testator, or anypapers belonging to the estate of atestator or intestate, the county judgeshall cause said person to be cited bypersonal service to appear before himand show cause why he should notdeliver such will to the court forprobate, or why he should not deliversuch papers to the executor PROB.

9 CODE delivery is not made or good cause not shown,the person having custody of the will can be arrestedand imprisoned until he delivers the will. If the personrefuses to deliver the will, he can also be liable to anyaggrieved person for damages initiating a Section 75 proceeding, inmost cases the beneficiary should first send a Section75 letter to the person having possession of the willdemanding delivery of the will to the clerk inaccordance with Probate Code Section 75.

10 This letterwill usually cause the person to come forward with thewill. A Section 75 letter also may be used todetermine the existence of and obtain wills executed bythe decedent other than the will offered for probate if aparty has reason to believe that another will may be thedecedent s last valid will. If it is not known who haspossession of any other wills, Section 75 letters maybe sent to all persons who might have possession,including the decedent s prior attorneys. If a Section 75proceeding is required and the person cited does notdeliver the will to the clerk or appear with the willbefore the court, unless good cause is shown, the personcan be arrested and imprisoned until he delivers the person also can be liable for damages sustained byany person due to his refusal to deliver the will.