gavel with blue probate bookOur two previous posts discussed claims available to nonprobate transfer challengers in Texas: lack of contractual capacity, undue influence, and claims by creditors of the deceased person. This post focuses on several of the legal procedures necessary to challenge a nonprobate transfer in Texas.

The Person Who Challenges a Texas Nonprobate Transfer Must Have Legal Standing

Legal standing requirements apply to any lawsuit. In general, this concept requires that the person bringing the lawsuit have a legitimate interest in the outcome. Usually that translates to a direct financial interest. The classes of persons with legal standing will depend on the circumstances of the case.

Undue Influence and Lack of Contractual Capacity—Transferor Living. In theory, when the transferor is still living, the transferor himself or herself can bring these claims. In practice, however, the transferor often completely lacks contractual capacity as a permanent condition. In those circumstances, any person interested in the welfare of the transferor can apply to become guardian of the transferor’s estate. That person can then bring claims to invalidate the improper transactions upon approval of the court. Please see our series on pursuing and avoiding Texas guardianships for more on this topic.

Alternatively, Courts may allow a next friend to bring claims on behalf of a transferor who has lost contractual capacity. We recommend that you speak with a Texas probate lawyer to discuss whether this approach is a viable option in your circumstances.

Undue Influence and Lack of Contractual Capacity—Transferor Deceased. The transferor’s claims for undue influence and lack of contractual capacity survive the death of the transferor. In other words, the wrongdoers don’t get absolved of their misdeeds just because the primary person harmed—the transferor—is now deceased. The primary person with legal standing then becomes the administrator or executor of the transferor’s estate. After a formal probate proceeding, the court appoints an executor if the transferor died with a valid will or an administrator if the transferor died without a valid will. Please see our series on becoming an executor for a discussion of this legal appointment process.

In certain circumstances, the heirs of beneficiaries of the transferor’s estate may have standing to challenge the Texas nonprobate asset transfer. Texas law is somewhat contradictory on this topic, so be sure to speak with an experienced attorney about this complex issue.

Creditor Claims. As we discussed in our last post in this series, creditors themselves have standing to begin a proceeding for fraudulent transfer. They may have standing to use other tools for recovery of the improperly transferred assets or damages resulting from same, but those procedures typically require that the executor or administrator of the transferor’s estate initiate recovery proceedings. If an estate isn’t pending, then creditors of a deceased transferor have standing to open up an estate.

All Texas Proceedings for Recovery of Nonprobate Assets Require Service on Certain Affected Parties

Every legal proceeding that involves the recovery of nonprobate assets requires some kind of service of process on affected parties. If the claim takes the form of a traditional lawsuit, then the plaintiff must hire a qualified person—typically a private process server or a county constable—to personally serve the defendants named in the lawsuit. The defendants are typically the recipients of the property and perhaps those that assisted with the improper transaction.

If the claim for recovery is not a traditional lawsuit, but it relies on Texas Estates Code provisions, then the Texas Estates Code itself typically specifies who receives service of the claim and how the claim must be presented. Depending on the provisions relied upon, the claimant may be required to serve the claim by personal service, certified mail, public notice in a local publication, or public notice by posting at the courthouse.

Parties Can Conduct Discovery While Pursuing Claims for Recovery of Nonprobate Assets

Texas parties to claims for recovery of improperly transferred nonprobate assets may be entitled to legal discovery, which refers to the formal process of obtaining information related to the lawsuit. Texas discovery includes written requests to the opposing side, known as interrogatories, requests for production, and requests for admissions. The parties may also send subpoenas to third parties for their documents and depositions. In traditional lawsuits, the parties will always be entitled to some level and form of the previously mentioned discovery tools. If the claim for recovery is made using Estates Code Procedures rather than a traditional lawsuit, then discovery may be more limited. A Texas probate attorney will be able to assess the prospects for discovery in your case.

Parties to Traditional Lawsuits for Recovery of Nonprobate Assets Are Entitled to Jury Trial

With few exceptions, Texas law gives the option of a jury trial to all parties to traditional lawsuits. If just one of the parties requests a jury trial, rather than a trial by the judge alone, then that party will get their wish and receive the jury. The decision on whether to request a jury, however, is extremely nuanced and requires an in-depth understanding of the legal claims, the underlying facts, and the local environment where the trial will be held. When Texas nonprobate transfers arise, this decision becomes even more complex. We therefore recommend that you consult with your Texas probate counsel before deciding whether to request a jury trial.

Next up, we present our final post on this series—a recap and highlighting of specific points in this series on challenges to Texas nonprobate asset transfers.

The Johnson Firm’s probate lawyers regularly bring lawsuits and assert statutory claims for recovery throughout Texas. Please call our Dallas lawyers if you need help pursuing or defending against a claim for recovery of improperly transferred nonprobate assets. Our offices also serve Plano, Frisco, McKinney, Denton, Fort Worth, Garland, Irving, Austin, Houston, San Antonio, Nacogdoches, Lufkin, and Center.