Texas Estate Planning

Is an Estate Liable for Apartment Rent?

When you pass away, your estate is still obligated to pay any debts you have and to fulfill any contracts you have signed, if possible. You cannot expect to escape your credit card debts, for example, by dying.

However, some things are not as simple.

What if you have signed a rental agreement as a co-lessor with a roommate? Ordinarily, if you do not pay the rent while you are alive, then the landlord can sue either roommate individually for the total amount owed or both jointly. If you pass away, the roommate is still responsible for the total amount of the lease, but can that roommate sue your estate for the amount you still owe under the lease?

That is essentially the question someone asked the New York Times recently in "A Roommate Dies; Must His Estate Pay the Rent?"

In this case, a woman was renting a garage apartment with her boyfriend who passed away. She continued to pay the full rent and wondered if she could receive her boyfriend's share of the rent from his estate.

The simple answer is yes, she can.

The estate, if it has the money to do so, would normally be responsible to pay her back for the rent. However, her claim against the estate would come after any tax liabilities or secured creditors and she would only get paid, if there is enough money left in the estate to do so.

Her position could be strengthened if she and her boyfriend had signed a written agreement about the amount of rent each of them was responsible for and what to do in the event one of them passed away during the term of the lease.

Reference: New York Times (Nov. 5, 2016) "A Roommate Dies; Must His Estate Pay the Rent?"

Deciding Whether to Challenge an Estate

Challenging someone's estate plan can be very expensive and very difficult to do successfully. Therefore, challenges should only be made after careful consideration. They should not normally be made merely because you received less from the estate than you expected.

You should instead first consider whether the distribution of assets would seem reasonable to an independent observer and whether there were any suspicious circumstances under which the estate plan was made.

Sometimes that initial inquiry will lead to an obvious answer, as was the case in a recent Market Watch column "My stepfather left $1 million to strangers and dead people."

A Market Watch reader wrote in to ask about some instructions his stepfather had left concerning a trust written a few days before he passed away. Instead of leaving any money for his wife of 60 years or any other close relatives, the stepfather decided to leave everything to relatives who lived overseas with whom he had no contact for years.

At least one of those foreign relatives was dead at the time.

While that is a pretty simple case of plans that do not on their surface appear reasonable to an independent observer, most cases are far less straightforward. Before deciding to challenge the estate plan of a relative, contact an estate attorney and see whether you have a good case.

Reference: Market Watch (Nov. 26, 2016) "My stepfather left $1 million to strangers and dead people."

Challenging a Late Marriage

Unscrupulous people use all sorts of tactics to take advantage of the elderly and position themselves to inherit an elderly person's estate. A common tactic is to pressure the elderly person to create a new will. Another common tactic is to marry the elderly person and then claim the estate as the spouse after the elderly person passes away.

The idea is that it is easier to get married than to have someone create a new will.

The Wills, Trusts & Estates Prof Blog recently discussed an example of this in the context of Texas case in "Challenging Mental Capacity in Marriage."

People who wish to challenge the inheritance must somehow prove the marriage was invalid. This can be difficult to do, as the burden of proof is on them.

The normal method for a successful challenge is to claim that the elderly person did not have the mental capacity to get married. Just as a will requires mental competence to be valid, so does a marriage.

While courts are often sympathetic to those seeking to challenge these types of marriages, it is still difficult to provide the necessary evidence to win. For that reason anyone looking to bring these cases should seek the expertise of an experienced estate attorney.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 22, 2016) "Challenging Mental Capacity in Marriage."

Michael Jackson's Estate Sued … Again

Michael Jackson's estate has been a difficult one to say the least. It has faced problems with the IRS and a seemingly endless list of those with legal claims against the estate. 

The latest problem is a lawsuit filed over an alleged contract that Jackson is said to have entered into with the deceased filmmaker Raju Patel. 

According to Patel's father, Jackson and Patel were close friends who founded a film company together and who agreed to split any profits equally. Jackson is supposed to have wanted to create a film to thank fans who still believed in him after he faced charges of child molestation. 

In 2005, a contract was agreed to for Patel to make this film, but Patel passed away three months later. As his successor, Patel's father allegedly has the contractual rights to make the film. However, the film cannot be made because Jackson's estate is not allowing access to the necessary video footage of Jackson and the rights to use his music. 

The Guardian reported this story in "Michael Jackson Estate Sued for Blocking Fan Tribute Film."

While Jackson's estate claims that this lawsuit is meritless, it could be a real problem for the estate. If Jackson did enter into a valid contract with Patel to create the film, then the estate is bound by that contract. 

The estate administrators cannot simply disregard the contract because they do not like it as much as Jackson did. However, since this lawsuit was just filed, it will be some time before it is known which side in this case is in the right.

Reference: Guardian (Dec. 4, 2015) "Michael Jackson Estate Sued for Blocking Fan Tribute Film."

 

Attorney Sued for Defrauding Estate

A young man named Bodee Peterson died from injuries sustained in a water skiing accident in 2011. The family hired attorney David Alan Roth to press claims for the estate against the responsible party. A settlement was eventually reached.

The family is now alleging that Roth misled them about the amount of the settlement. Roth was to have set up annuities for Peterson's siblings, something he allegedly failed to do.

A surprise twist to the story? Roth committed suicide a few months ago.

Consequently, the Peterson family is pursuing its claims against his estate.

The WCF Courier has more of the story in an article titled "Bodee Peterson's parents file claim against Roth estate."

A key takeaway from this story is this: if you are overseeing a loved one's estate, it is very important that you hire the right attorney to pursue any claims that the estate has. In addition, stay on top of things. You should contact the attorney regularly so you know what is happening and make sure that the attorney is on top of things.

Reference: WCF Courier (February 8, 2015) "Bodee Peterson's parents file claim against Roth estate."