Informal Family Agreements
As the saying goes: “Death is not the end. There remains the litigation over the estate.” It is very common for a person to pass away leaving a valid Last Will and Testament, only to have the surviving beneficiaries fight over their inheritances. These situations of hostility following the death of a family member or other loved one are difficult to maneuver, and particularly in Texas, are encouraged to be avoided. It is of the utmost importance in circumstances of this nature to consider the use and propriety of an Informal Family Agreement.
An Informal Family Agreement is an agreement made by those with an interest in the deceased person’s estate whereby those interested persons agree not to probate the Will, and agree to the disposition of the estate property among themselves.
Texas is a strong supporter of the Informal Family Agreement. Although a testator’s original wishes should certainly be respected, they need not be precisely carried out if it means avoiding a Will contest. Thus these agreements are most commonly utilized when beneficiaries are trying to avoid litigation costs associated with will contests.
The authority for the use of an Informal Family Agreement is logical. Texas case law provides that the agreements are supported by the fact that property vests immediately at the decedent’s death in the beneficiaries under the Will. Since the Will beneficiaries may agree to trade and transfer bequests immediately after the property is distributed to them, it is only appropriate that they be permitted to divide the property by agreement prior to receiving it within judicial administration of the estate. In other words, the property belongs to the beneficiaries immediately when the decedent dies, not when the will is probated and the estate is ultimately distributed. Thus since the assets are already “theirs,” they can agree to split up the estate among themselves as they wish. While the assets are still subject to the decedent’s debts, the remainder of the property can be split and divided among the devisees as they see fit..
There are certain requirements to be met in drafting these agreements, and court approval is required in specific situations. If an Informal Family Agreement appears to be attractive for your particular situation, it’s important to speak with an estate planning attorney at Garg & Associates to fully discuss your options and the requirements for implementation.
We invite you to contact us for a consultation. Call Garg & Associates, PC at 281-362-2865 or complete our contact form.