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Court Holds That Decedent’s Residence Was Homestead That Was Exempt From Claims Against Her Estate

In Caceres v. Kerri Grahamas Dependent Adm’r of the Estate of Alicia Maribel Procell, decedent was survived by a minor child and her estate was insolvent. No. 14-18-00826-CV, 2020 Tex. App. LEXIS 4198 (Tex. App.—Houston [14th Dist.] May 28, 2020, no pet. history). The trial court appointed a dependent administrator and approved the administrator’s inventory, appraisement, and list of claims. The administrator had included the decedent’s homestead on the estate’s inventory and represented that the estate had a claim for the rental income from the homestead. The trial court overruled the objections of two of the children to the inventory, appraisement, and list of claims, and granted the administrator’s motion to terminate the property’s homestead protection and to subject it, and the income it generated, to the dependent administration.

On appeal, the appellate court disagreed with the trial court because one of the decedent’s children was a minor when her mother died. The court held that the homestead remains exempt as a matter of law from the claims of the estate’s creditors and is not subject to administration. The court also held that title to the homestead vested in the decedent’s four children upon her death; thus, rent due after her death belongs to the estate. The court discussed the law governing homestead and a decedent’s minor children:

[A]n application by a person authorized to act on the minor’s behalf, the court must “set aside . . . the homestead for the use and benefit of . . . the minor children.” This means that, with a few narrow exceptions not presented here, the homestead is not liable for the payment of any of the estate’s debts. Unless one of the express exceptions applies, the homestead is not subject to administration.  Instead, the decedent’s children share “absolute title” to the homestead. Second, a trial court has discretion to permit a minor’s guardian to “to use and occupy” the homestead under a court order. Third, the homestead may not be partitioned among the decedent’s heirs for so long as the trial court permits the guardian of the decedent’s minor children “to use and occupy” the homestead.

Id. The court held that the fact that the administrator included the homestead property in the inventory did not mean that it was presumptively homestead:

Although there is case law holding that inclusion of real property in the administrator’s inventory is prima facie evidence that the property is not a homestead, and thus, a homestead should not be included on the inventory, we cannot say that the inclusion of homestead property in the administrator’s inventory is per se erroneous, because the Texas Estate Code appears to permit its inclusion. “Estate” is statutorily defined to include all of a decedent’s property, and the homestead falls within that broad definition.

Id.

The court also disagreed with the trial court’s conclusion that the minor’s homestead’s rights should have been terminated when she turned eighteen. The court held: “the homestead passed free of claims by or against the estate to the decedent’s children upon their mother’s death, and it continues to be exempt homestead property even though Jennifer is no longer a minor.” Id. The court reversed the trial court’s orders and remanded for further proceedings.

© 2020 Winstead PC.National Law Review, Volume X, Number 185

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About this Author

David Johnson Financial Litigator Winstead Law Firm

David maintains an active trial and appellate practice and has consistently worked on financial institution litigation matters throughout his career. David is the primary author of the Texas Fiduciary Litigator blog, which reports on legal cases and issues impacting the fiduciary field in Texas. 

David's financial institution experience includes (but is not limited to): breach of contract, foreclosure litigation, lender liability, receivership and injunction remedies upon default, non-recourse and other real estate lending, class...

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