In In re Estate of Johnson, the Texas Supreme Court reaffirmed in a May 28, 2021 opinion that a will 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.
The will’s proponent in this case established that the contestant accepted benefits under the will to which she was not otherwise legally entitled. Because the contestant did not rebut this evidence, the Texas Supreme Court determined that the trial court properly dismissed the will contest.
The Facts Of In Re Estate of Johnson
Shortly before his death, Dempsey Johnson executed a will, in which he devised his estate through specific bequests and left the residuary to his three daughters, Lisa Jo Jones, Tia MacNerland, and Carla Harrison. In addition to MacNerland’s residuary interest, Johnson bequeathed to her a mutual fund account and one-half of a bank account. Decedent named Jones the estate’s independent executor.
After Decedent’s Death, Jones applied to probate his will. In December 2017, Jones transferred to MacNerland the mutual fund account left to her under the will, and MacNerland assumed ownership of the account. The value of the account at transfer was $143,229.15.
In February 2018, MacNerland brought a will contest. She alleged that Decedent lacked testamentary capacity when he executed the will, or did so under Jones’ influence. Jones responded that MacNerland lacked standing to contest the will because MacNerland had accepted benefits under it—namely, the mutual fund account that MacNerland took possession of three months earlier.
MacNerland did not return the mutual fund account to the estate. Jones filed a sworn inventory of the estate’s assets and liabilities. The inventory valued the estate at $1,427,209.94, including MacNerland’s mutual fund. Jones then moved to dismiss MacNerland’s will contest for lack of standing, claiming that MacNerland’s acceptance of benefits under the will estopped her from suing to invalidate it.
MacNerland conceded that she had inherited the mutual fund account through her father’s will. Relying on the inventory, however, MacNerland argued that the acceptance-of-benefits doctrine did not deprive her of standing to contest the will because the value of the mutual fund account was “far less” than one-third of her father’s $1.4 million estate—the proportionate amount, MacNerland claims, she “would have received” had he died without a will.
The Texas trial court dismissed MacNerland’s will contest for lack of standing.
MacNerland appealed, contending that the trial court misapplied the acceptance-of-benefits doctrine. She argued that her contest is consistent with her acceptance of the mutual fund account because, win or lose the contest, she is entitled to more. The benefit that she accepted—the mutual fund account—is not the full amount to which she is entitled under the will, and further, if she succeeds in her will contest, then her intestate share of her father’s estate would exceed the account’s value. Because Jones did not provide evidence to contradict MacNerland’s assertion, MacNerland argued, Jones did not carry her burden to establish that the acceptance-of-benefits doctrine bars her claim.
The court of appeals agreed with MacNerland. Jones petitioned for review by the Texas Supreme Court.
Who Has Standing To Contest a Will In Texas?
In a will contest, a Texas probate court addresses the issue of standing to contest a will first. The Texas Supreme Court summarized standing in a will contest, stating:
Under the Estates Code, any “person interested in an estate” may contest its administration in probate court. A “person interested” in an estate is “an heir, devisee, spouse, creditor, or any other having a property right in or claim against an estate being administered.”
To have standing to contest a will, a person must first establish this interest. As we held in Logan v. Thomason, “the burden is on every person contesting a will, and on every person offering one for probate, to allege, and, if required, to prove, that he has some legally ascertained pecuniary interest, real or prospective, absolute or contingent, which will be impaired or benefited, or in some manner materially affected, by the probate of the will.” “In the absence of such interest a contestant is a mere meddlesome intruder.”
After standing to contest the will is established, the burden shifts to will’s proponent to adduce evidence of any affirmative defense that precludes the contestant from proceeding with her claim.
Here, that meant that Jones bore the burden to establish that MacNerland voluntarily accepted benefits under the will.
The Acceptance-of-Benefits Doctrine In Texas Will Contests
The acceptance-of-benefits doctrine in a Texas will contest bars a party from contesting the validity of a will while enjoying its benefits. As stated by the Texas Supreme Court: “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.”
A contestant may rebut the doctrine’s applicability by showing that she did not accept the benefit through the will.
Here, MacNerland argued that her assertion of an entitlement to greater benefits under her father’s will, or hypothetically, as an intestate heir of her father’s estate, defeats Jones’s defense of estoppel by acceptance of benefits. MacNerland drew support for her position from Holcomb v. Holcomb, a Texas court of appeals decision addressing the acceptance of benefits doctrine, suggesting that a contestant may challenge the will if the benefits she accepted are worth less than those to which she is entitled under the challenged will or intestate laws.
The Texas Supreme Court rejected the suggestion of Holcomb, stating:
The suggestion in Holcomb that a will contestant may presently accept benefits under the will based on a hypothetical claim to greater benefits should a court declare it invalid finds no support in our case law. We rejected the idea more than sixty years ago in Wright v. Wright. As we explained in that case, the test for determining whether a contestant’s acceptance of benefits estops her from bringing a will contest “does not depend upon the value of the benefits,” “[n]or is it to be determined by comparing them with what the statutes of descent and distribution would afford the beneficiary in the absence of a will.” Rather, the doctrine asks whether the contestant has an existing legal entitlement to these benefits other than under the will. If there is no existing entitlement save for the testator’s bequest, then the contestant’s acceptance of it is inconsistent with a claim that the will is invalid.
“A beneficiary must firmly plant herself on the side of the will’s validity or invalidity and accept the consequences of that election.” MacNerland either had to pursue her will contest or accept the benefits bequeathed to her by decedent. She chose to accept the benefits. As a result, MacNerland was required to accept the validity of the will, and renounce every right inconsistent with the will.