Maxey v. Maxey: 3 Takeaways about Placing Real Estate in Trusts

In the recent Texas appellate case of Maxey v. Maxey, a dispute occurred involving the probate of an estate in which two sisters mediated and reached a settlement agreement addressing the division of real property. The two sisters disagreed on how to divide property among several trusts and as a result initiated legal action against one another. Following mediation, the sisters entered into a settlement agreement to divide real estate. The parties then disagreed on what the settlement agreement meant and again initiated legal action against each other. The trial court ultimately found that the settlement agreement’s terms were ambiguous and submitted the meaning of an agreement to a jury. Following a jury trial, the losing sister appealed.


The court of appeals later reversed this decision and held that the settlement agreement was not ambiguous. The court instead found that language used was not reasonably susceptible to multiple meanings. Because the language in the settlement agreement was found not to be ambiguous, the court found that the jury should have determined the parties intent as a matter of law and did not need to rely on extrinsic evidence. Consequently, the court remanded the case back to trial court to construe the settlement agreement and properly divide the real estate.


When trusts and estate cases arise involving real estate, parties often must mediate and settle disputes. One of the valuable takeaways from the Maxey case is that it emphasizes that parties can enter into enforceable and unambiguous settlement agreements that divide real property provided that they create adequately detailed descriptions. Fortunately, besides stating property descriptions, there are also some other helpful steps that parties can follow to avoid trusts and estate planning contests or disputes.


# 1 – Discuss Your Plan with the People Impacted by It


Communication is one of the best steps to avoiding estate planning disputes. You should let anyone else who will be impacted by the real estate to understand what your goals are, even though these conversations can be difficult to have. If you cannot effectively communicate your plans or goals with these individuals, the best estate attorneys can sometimes mediate these conversations to make sure these points are sufficiently communicated.


# 2 – Consider Attaching a Separate Explanation Letter


By attaching a signed, separate letter with your estate plan addressing what your estate planning goals are, you can take an additional step in communicating your inheritance decisions. Even though these documents are not signed, they should not be interpreted as court documents. Instead, the formality of these documents will emphasize to your loved ones that you are serious and gave thought to your decisions.


# 3 – Obtain an Independent and Secondary Review


To establish that your planning conforms to your intent, you should consider obtaining a certificate of independent review from a second lawyer. An independent review can support that the terms of an estate plan are exactly what an individual wanted. Courts are unlikely to invalidate estate plans that are approved by two separate professionals.


Speak with an Experienced Estate Planning Attorney


While estate planning is full of challenges, a skilled attorney can help you navigate this process. Do not hesitate to contact Ettinger Law Firm today to schedule a free case evaluation.

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