A recent decision from the Ft. Worth Court of Appeals, In the Estate of Larry Ronald Neal, Deceased, offers a good reminder about how important is to carefully word a will to ensure that one’s intent is carried out after death.

Background

Larry Neal executed a will in 2009 naming his brother, Gary, as executor of his estate and making various bequeaths of his assets.  The will included the following provisions:

Article II  “I do give and bequeath to my niece, Valorie Jean (Neal) White, all of my personal effects and all of my tangible personal property, including automobiles, hangars, aircraft, fly-drive vehicles, patents, companies, and all other things owned by me at the time of my death, including cash on hand in bank accounts in my own name, or companies names, or securities, or other intangibles.

Article IV  “I hereby grant to my Executor the continuing absolute, discretionary power to deal with any property, real or personal, held in my estate or in any trust, as freely as I might in the handling of my own affairs.  Such power may be exercised independently and without the prior or subsequent approval of any court or judicial authority, and no person dealing with the Executor shall be required to inquire into the propriety of any of their actions…I hereby grant my Executor the following specific powers and authority in addition to…powers conferred by law:  (a) to make distributions in cash or specific property, real or personal…(b) to sell, transfer, or convey, at public or private sale, any property, real or personal…constituting all or part of my estate; (c) to compromise and settle claims in favor of or against my estate; (d) to hold and exercise any and all powers conferred by law.

Larry passed away in 2014, at which time Gary admitted the will to probate and was named independent executor of his estate.

The Lawsuit

A dispute arose when Larry’s daughter, Lori Neal Freitag, sought a declaratory judgment that under the will, Valorie was entitled to receive Larry’s personal property only and that the will did not dispose of Larry’s real property and that such real property should, therefore, pass under intestacy laws to Larry’s children–Lori and her two brothers.  Gary took the opposite position, arguing that because Article II gave Valorie “all other things owned” by Larry, that Valorie was entitled to the real property.  He also argued that Article VI supported this interpretation because ti gave Gary the authority to sell and manage “real or personal” property.  Thus, Gary argued, the will “unambiguously contemplated disposition of the entirety” of the estate.

The trial court ruled in favor of Gary, holding that all property–personal and real–should pass under the will to Valorie.  Lori appealed this decision.

The Court of Appeal Opinion

The Ft. Worth Court of Appeals reversed the trial court decision and held in favor of Lori.  [Read full opinion here.]

The court held that Article II defined only personal property.  The court reads Article II as containing three separate phrases.  First, Larry gave Valorie all of his “personal effects,” which the court held was a subset of personal property.  Second, Larry gave Valorie all tangible personal property including various items such as automobiles, a  hangar, and aircraft.  The court said nothing in this phrase indicates Larry intended to leave her real property; instead, this phrase explicitly identified examples of personal property.  Third, Larry gave Valorie “all other things owned” at the time of his death, including cash, securities, and intangibles.  The court reasoned that “all other things” must be read in context and when looking at each of items listed as being included, they are all intangible personal property.  Thus, the last clause intended to give her “all other” intangible personal property–not real property.

Gary argued that there is a presumption against partial intestacy when someone leaves a will.  While true, the court held that the presumption must yield in this case, because it is clear that Larry did not dispose of his real property in his will.

Gary also argued that Article IV expressly allows him to dispose of both “real and personal” property.  The court reasoned that even where property may pass through partial intestacy, the law allows an executor to take control over such property, so it was not unusual or a sign of intent for real property to pass through the will that Larry allowed Gary to take control as executor.  Second, the fact that Larry included the terms “real or personal” property in Article IV indicates that he knew the difference between them and included a distinction when he chose to do so.  Thus, said the court, his failure to include real property in his bequeath in Article II indicates his intent was to leave Valorie only the personal property expressly stated.  Finally, the court rejected Gary’s argument that by including a hangar in the list of property given to Valorie, that indicated an intent to leave her real property.  Not so, said the court, because the hangar at issue here was removable, making it personal property.

Based on this, the court held that all personal property passed to Valorie, but all real property was not distributed by the will and should pass by intestate succession.

Takeaways

A person writing a will must take great care to ensure their wishes are spelled our clearly, completely, and in accordance with the law of interpretation.  It seems hard to fathom that Larry intended to write a will leaving only his personal property and wanted his real property to pass intestate, but that is what happened in this case.  I always recommend that a person hire an experienced estate planning attorney to draft or at least review a will prior to execution to avoid this type of dispute.