Expectations Lost Would-be Beneficiaries Out of Luck - Hammerle Finley Law Firm

For many years now there has been a monstrous legal theory swirling around in the murky waters of Texas probate law just waiting to be formally recognized.

On June 22, 2018, the Texas Supreme Court finally put an end to it with a well-aimed harpoon.

What was this theory?

It was called “tortious interference with inheritance rights.”

The legal theory had been created by a host of disappointed would-be beneficiaries who claimed that they had been damaged by somebody who had wrongly convinced a donor to disinherit them.

There was just one problem with the theory: it went against the very bedrock of property law in the State of Texas. In Texas, a donor has an absolute right to dispose of his property as he chooses. A parent can decide to disinherit his child, a spouse can decide to leave her spouse nothing in her will, and a businessman can decide to leave his partnership interest to a stranger. The donor can do this with or without input from anyone else.

Texas law says that a beneficiary gets only what a donor wants to give him. The Supreme Court put it more bluntly: “A prospective beneficiary has no right to a future inheritance…..” For relatives especially, that can be a difficult legal principle to accept. Many a disappointed adult child has cast around looking for someone to blame when the parent disinherits him.

A claim for “tortious interference with inheritance rights” would have given a prospective beneficiary an actual right to sue for being cut out of an inheritance that he did not otherwise have. It would have ignored the reality of family dysfunction, conflicting motives and changing feelings. It also would have created potential liability for every person or entity who consulted with a donor about estate planning or who was involved in the donor’s decision-making. To put it mildly, had the Supreme Court recognized the legal theory then it would have given every disappointed would-be beneficiary a green light to sue the donor’s accountants, attorneys, financial planners, friends, family, and charities.

Talk about legal chaos.

The case, Archer v. Anderson, was brought by some relatives of Jack Archer, who had a $7.5 million estate. After he suffered a stroke, at the behest of his attorney and long-time friend Anderson, Jack changed his estate plan to cut out his relatives and leave everything to charity. His relatives sued and eventually settled with the charities.

Then Jack and Anderson both died. Five of the relatives sued Anderson’s estate, claiming he had tortiously interfered with their inheritance rights.

Their claim got bounced by the Supreme Court. The Court said that a prospective beneficiary has no right to fairness in the distribution of a donor’s estate. It noted that, before death, a donor may not want to disclose his true intentions and risk offending family and friends.

As the Texas Supreme Court concluded in its opinion “The tort of intentional interference with inheritance is not recognized in Texas.” Thank goodness.

Virginia, a 1982 SMU law school graduate, has advised clients for over 35 years. For more information, visit hammerle.com, and for newsletter sign-up, email legaltalktexas@hammerle.com. This column does not constitute legal advice.