Patrick S. Weir discusses a significant Texas case where a residuary clause determination could affect the validity of subsequent documents in the chain-of-title when documents are executed by the owner of a life estate without the joinder of the remaindermen.
Knopf v. Gray held that a testator’s Will bequest created a life estate in the devisee. Testator owned 316 acres (the “Land”) in Robertson County, Texas when she died, and the residuary clause that devised the Land provided the following:
NOW BOBBY I leave the rest to you, everything, certificates of deposit, land, cattle and machinery, Understand the land is not to be sold but passed on down to your children, ANNETTE KNOPF, ALLISON KILWAY, AND STANLEY GRAY. TAKE CARE OF IT AND TRY TO BE HAPPY.
Bobby is the Testator’s son, and Annette, Allison, and Stanley are the Testator’s grandchildren. After the Testator’s death, Bobby and his wife, through multiple warranty deeds, conveyed the Land to Polasek Farms, LLC. Annette and Stanley, two of the Testator’s grandchildren, filed suit seeking a declaratory judgment that the Will devised a life estate in the Land to Bobby. The issue before the Court was whether the intent of the Testator in the residuary clause was to bequeath the Land in fee simple to Bobby, or to bequeath a life estate to Bobby.
The Supreme Court of Texas began its analysis reaffirming that “[t]he cardinal rule of will construction is to ascertain the testator’s intent and to enforce that intent to the extent allowed by law.” “We interpret the words in a will as a layperson would use them absent evidence that the testator received legal assistance in drafting the will or was otherwise familiar with technical meanings.” The Court also provided that land is conveyed or devised in fee simple unless the grant is expressly limited (the greatest possible estate doctrine), and the law does not require any specific words to create a life estate.
In asserting their arguments, the parties tended to focus on the language in the second part of the clause, specifically the words “passed on down.” The grandchildren asserted that the phrase was instructional language, and when taken with the rest of the Will it demonstrates the intent to create a life estate. On the other hand, Bobby asserted the instructional language demonstrated an intent to convey the Land in fee simple, and alternatively that “the instructional language either constitutes an invalid disabling restraint, is nontestamentary, or is technically insufficient to create a life estate.” A disabling restraint is an attempt by the grantor, through the terms of a transfer, “to invalidate a [grantee’s] later transfer of that [granted] interest, in whole or in part.”
The Court quickly refuted such a concentrated analysis stating it “misses the analytical forest for the trees.” “We need only read the provision as a whole to see a layperson’s clearly expressed intent to create what the law calls a life estate.” Thus, the Court held that the residuary clause created a life estate in Bobby with the remaindermen being the grandchildren. The “passed on down” language referred to the reversion after Bobby’s death.
The Court provided additional analysis in the context of the entire will. The Will has twelve specific bequests to her grandchildren, and the Will used terms like “passed on,” “given,” and “handed down.” The Court provided that “the will as a whole indicates an intent to keep her property in her family and to bequeath certain property to multiple generations.”
The Court then ruled on Bobby’s alternative arguments, holding that the bequest clause was not an invalid disabling restraint because restraint is inherent in a life estate and that would take the clause out-of-context. The language providing “the land is not to be sold” was an integral part of Testator’s intent to create a life estate, the instructional language was testamentary, and the language did not create an invalid disabling restraint. The residuary clause expressed the Testator’s intent to bequeath the Land to the grandchildren, subject to life estate in Bobby, the Testator’s son.
Significance
This holding is significant for anyone dealing with real estate, wills and trust, or oil and gas law. The Court’s finding serves to limit the greatest possible estate rule. Here, the Court found that that the unusual limitation used in the residuary clause was express and clear enough to limit the grant. The determination that an interest is a life estate can have far reaching effects, and it could affect the validity of subsequent documents in the chain-of-title when documents are executed by the owner of a life estate without the joinder of the remaindermen.
Author
Table of Sources
Knopf v. Gray, 545 S.W.3d 542 (Tex. 2018).
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