Under current Texas law, if a person (a “Testator”) leaves a part of their estate by Will to a “lineal descendent” (a child or grandchild); or to a “descendant of a Testator’s parent” (a brother or sister), and that descendent predeceases the Testator, the gift will pass to the children of the predeceasing descendent.[1] This is automatic under the Texas anti-lapse statute unless altered by the Testator in the Will (i.e. “to my brother, if he survives me”).
However, a careful title examiner must understand that the Texas anti-lapse statute has not always been the law and does not affect gifts under early Wills in a chain of title. Prior to passage of such statutes, Texas relied on common law which stated that if a beneficiary predeceased a Testator, then the gift lapsed, and the gift passed under intestacy.[2]
Prior to 1991, a gift lapsed if the beneficiary predeceased the Testator except and unless the predeceased beneficiary was a child or lineal descendant of the Testator and left a surviving descendant.[3] In 1991, the anti-lapse statute was expanded to include lineal descendants of the testator’s parents (i.e. a beneficiary that is a brother or sister of the Testator).[4]
Typically, if a gift fails or lapses, it becomes part of the Testator’s residuary estate.[5] A residuary estate is an important aspect under any Will where any part of the estate, known or unknown, not specifically gifted under the Will passes to the beneficiaries of the residuary estate. Under current Texas law, if a residuary estate is gifted to two or more individuals and one of those individuals fails to survive the Testator, the predeceased beneficiary’s share passes to the surviving beneficiaries of the residuary estate.
However, similar to the anti-lapse statute, special care must be taken as to when a Will is probated to determine what happens if a residuary gift lapses. Prior to September 1, 1993, if a residuary gift lapsed it passed through intestacy to the heirs at law of the Testator, even if there were other named beneficiaries of the residuary estate.[6] In 1993, the Texas Legislature changed the common law rule so that if a residuary gift is devised to two or more persons, and one or more of the residuary gifts lapse or fail for any reason, then the lapsed gift passes to the other residuary devisees.
As a demonstration of this problem consider that John owns 100 acres of land. In John’s Will he leaves the land to Larry, but the residuary estate is bequeathed to Curly and Moe. Depending on the date of John’s death, if a gift lapses to one of the beneficiaries, the estate will be divested in very different ways.
1. If John dies before 1991, with Larry (his brother) predeceasing, then Larry’s interest will pass to Moe and Curly via the residuary clause.
2. If John dies after 1991, with Larry (his brother) predeceasing, then Larry’s interest will pass to Larry’s lineal descendants via the anti-lapse statute. (Note: If Larry has no living descendants, the gift then goes to the residuary estate.)
3. If John dies before September 1993, with Larry and Curly predeceasing, then 1/2 of the Estate will pass to the surviving residuary beneficiary, Moe, and 1/2 of the Estate will pass via intestacy, to the heirs at law of John.
4. If John dies after September 1993, with Larry and Curly predeceasing, then all of the Estate passes to Moe as the sole surviving beneficiary of the residuary estate.
[Note: If the predeceased beneficiary of the residuary estate is the descendant of the Testator, the Testator’s parents, or a member of a class gift[7], the gift would still pass to the descendants of the predeceased beneficiary, subject to the above anti-lapse statutory dates.]
If a title examiner does not know the full marital and family history of a deceased Testator, then Gaps in the chain of title can quickly form. Further, because beneficiaries named in a Will may believe the Estate passed through probate, conflicts between named beneficiaries and heirs at law may lead to time consuming litigation. Accordingly, it is important that all title examination take into account gifts that lapse, as well as the date in which the Testator died.
[1] Texas Estates Code § 255.153. Disposition of Property to Certain Devisees Who Predecease Testator
[2] See Andrus v. Remmert, 136 Tex. 179 (Tex. 1941).
[3] See Joyner v. Christian, 131 Tex. 274 (Tex. 1938)(citing Article 8295 R.C.S. 1925).
[4] See. Tex. Prob. Code § 68(a).
[5] Texas Estates Code § 255.152. Failure of Devise; Effect on Residuary Estate
[6] See Sewell v. Sewell, 266 S.W.2d 924 (Tex. Civ. App.—Texarkana 1954, writ ref’d n.r.e.); Tabor v. National Bank of Commerce, 351 S.W.2d 126 (Tex. Civ. App.—San Antonio 1961).
[7] Texas Estates Code § 255.152. Devisee Under Class Gift