Living arrangements can pose a number of problems when an older family member is placed in a home or they die. The family members have to decide what to do with the property.
These issues often result in probate litigation after the parent dies. But what about when the parent is alive, but incapacitated?
If a parent is alive but incapacitated, does their adult child have a homestead right to occupy the parent’s house? Does this right allow the adult child to live in the parent’s house rent-free?
The court addresses this in Hunter v. NCNB Texas National Bank, 857 S.W.2d 722 (Tex. App. 1993)
Facts & Procedural History
This case involves a house owed by a parent. The parent was found to be incapacitated and a guardian was appointed. The parent was moved to a nurshing home.
Previously, the parent had transferred her home to a revocable living trust.
The adult child executed a lease and rented the home from the trustee. When the lease came up for renewal, the adult child refused to sign the lease or to continue paying rent. The adult child asserted that she had a homestead right to live in the house.
The trustee filed a declaratory judgment action to ask the court whether the adult child a homestead right in the house.
Homestead Rights in Texas
Texas law provides two forms of homestead rights. One right is the protection from the homeowner’s creditors. This right was not at issue in this case.
This case focused on the other homestead right, which is reserved for the homeowner’s surviving spouse and minor children. This gives the surviving spouse and/or minor children the right to occupy the home.
Homestead Rights During a Guardianship
The adult child in this case cited the general rule found in the guardianship rules which says:
The provisions, rules, and regulations which govern estates of decedents shall apply to and govern guardianships, whenever the same are applicable and are not inconsistent with any provision of [the probate code]
Given this rule, the adult child argued that the homestead right that applies in probate cases (i.e., when the homeowner died) applies to guardianships. The probate court did not agree. On appeal, the appeal court did not agree either.
The result is that homestead rights do not extend to an adult child for their incapacitated parent’s home. Should the parent (or as in this case, the trustee of the trust that owns the home) has the right to collect rent or to evict the adult child. This is true even if the parent is of an advanced age and the parent’s will or trust leaves the house to the adult child upon the parent’s death.
After the parent dies, the beneficiaries under the parent’s will or trust would succeed to the property. If they were the surviving spouse or minor children, they would be entitled to occupy the home during the probate proceeding. However, this right does not exist during lifetime.
It should be noted that with some estate planning in advance, this issue may have been avoided. The trust could have included language addressing this situation. This is common when the parties know that a homestead will be transferred to a trust.