There are times when you need to access the decedent’s bank records before a probate case is started. This may be needed to tell if there are even assets that need to do a probate.
The subpoena is one way to get records, but there is a question as to whether the probate court can issue a subpoena for a would-be-executor before they are appointed. The court addresses this in In re Estate of Gaines, 262. S.W.3d 63 (Tex. App. 2008).
Facts & Procedural History
Veronica Davis was named as the executor to manage the decedent’s estate. Davis’ brother, Darrell Green, was the trustee under the will. Green was also the guardian of the decedent’s children.
Davis did not probate the decedent’s will for more than three years after death. During this time, the children believed that Green was misappropriating the trust’s funds held in a bank.
The bank advised the kids that they needed to obtain a subpoena to get the records. Davis filed for probate and, before she was appointed as the executor, obtained a subpoena from the probate court. The subpoena obligated the bank to produce bank statements and records for the estate.
The bank did not produce the records. It refused the request on the grounds that Davis did not have the authority to issue the subpoena. Green, as the account holder, then filed a motion to quash the subpoena.
Davis filed a motion to compel to ask the court to compel the production of the documents, hold the bank in contempt for disobeying the subpoena, demand the production of records for inspection, sanction the bank, and award attorney fees and court costs.
The Probate Court Rulings
The probate court made several rulings in this case.
The court granted Green’s motion to quash, meaning the subpoena directed at Green was invalidated and no longer required compliance.
The court denied Davis’s motion to compel, which sought to enforce the subpoena against Green. The court determined that Davis, who issued the subpoena, was not qualified as the independent executor of the Estate, and therefore lacked the authority to issue the subpoena. Additionally, Davis failed to comply with section 59.006 of the Finance Code, which pertains to specific requirements or procedures for issuing subpoenas in this context.
The court ordered Davis to pay the Bank its reasonable and necessary attorney’s fees and research charges. This suggests that Davis incurred expenses for the Bank’s legal representation and research efforts, likely resulting from some dispute or legal proceedings.
The court admitted Gaines’s will to probate, affirming its validity for the purpose of estate administration. However, the court determined that Davis was not suitable to serve as the independent executor of the estate. Instead, the court exercised its authority to appoint Mary Peter Cudd as the independent administrator, based on its judgment that Cudd would be better suited to manage the estate in the best interests of the beneficiaries.
The court ordered Davis to transfer all funds she had collected on behalf of the Estate and its beneficiaries to the court’s registry. This implies that Davis had collected funds related to the estate, but the court decided that it would be more appropriate for the court to oversee and control the funds rather than Davis.
Following these rulings, Davis appealed the probate court’s decisions. Davis argued that the probate court was not allowed to disqualify and replace her as the executor, claiming that she had correctly filed the subpoena and that it should not have been invalidated. Davis also disputed the bank’s entitlement to attorney’s fees from her.
However, the court of appeals reviewed the case and upheld the probate court’s decisions. The court of appeals supported the appointment of a new executor (Mary Peter Cudd) and affirmed the denial of Davis’s subpoena. Additionally, the court of appeals rejected Davis’s request for the bank to be held in contempt for not producing the requested documents.
The Subpoena in Texas Litigation Cases
A subpoena plays a crucial role in Texas litigation by compelling the attendance of witnesses and the production of documents or tangible things relevant to a lawsuit.
Rule 176 of the Texas Rules of Civil Procedure governs subpoenas in civil cases in the state of Texas.
Form and Required Actions
A subpoena issued in Texas must be in the name of “The State of Texas” and contain specific information, including the lawsuit’s style and cause number, the court where the suit is pending, the date of issuance, and the person to whom the subpoena is directed. Additionally, it should state the time, place, and nature of the action required by the recipient, such as attending a deposition, hearing, or trial, or producing designated documents. The subpoena must be signed by the issuing person (Rule 176.1, 176.2).
Limitations and Who May Issue
Texas imposes limitations on subpoenas, stating that individuals generally cannot be required to appear or produce documents in a county more than 150 miles from their residence or the place of service. However, different rules may apply to depositions. Subpoenas can be issued by the court clerk, an attorney authorized to practice in Texas, or an officer authorized to take depositions (Rule 176.3, 176.4).
Service and Response
A subpoena can be served anywhere within Texas by a sheriff, constable, or any non-party who is 18 years of age or older. Proof of service can be established through a signed written acceptance by the witness or a statement by the serving person. Unless discharged by the court or the summoning party, the recipient of a subpoena must comply with its command, which may involve attending a deposition, hearing, or trial, or producing requested documents. Organizations must designate a representative to testify on their behalf if the matters are clearly specified (Rule 176.5, 176.6).
Objections, Protective Orders, and Enforcement
The recipient of a subpoena has the right to raise objections to producing certain materials or request a protective order to shield against undue burden or expense. Objections must be made in writing before the specified compliance deadline. The party requesting the subpoena can seek court orders to enforce compliance or provide protection. In case of non-compliance without a valid excuse, the court may find the individual in contempt, leading to fines or confinement. However, before imposing penalties, the requesting party must demonstrate proof of payment or tender of fees to the witness (Rule 176.6, 176.7, 176.8).
Section 59.006 of the Finance Code
Section 59.006 of the Finance Code in Texas outlines the process for discovering customer records held by financial institutions. This section establishes the exclusive method for obtaining such records through compelled discovery.
If a financial institution receives a record request, it must produce the requested record under specific conditions. These conditions include being served with the record request at least 24 days before the compliance deadline, receiving payment for reasonable costs associated with compliance, and obtaining the customer’s written consent if they are not a party to the proceeding. If the requesting party fails to pay the costs or obtain customer consent, a court cannot order the financial institution to produce the record or hold them in contempt.
When the affected customer is not a party to the proceeding, the requesting party must provide notice of the record request and the customer’s rights, file a certificate of service, and request the customer’s written consent. If the customer does not provide consent by the compliance deadline, the requesting party can seek an in camera inspection of the record, where the tribunal reviews the record privately to determine its relevance. The tribunal may order redaction of certain portions and impose a protective order to limit disclosure and use of the record.
If the customer is a party to the proceeding, they bear the responsibility of seeking appropriate remedies to prevent or limit the financial institution’s compliance with the record request. This can be done through motions to quash the request or for protective orders. The financial institution is not liable to the customer or any other person for disclosing a record in compliance with this section.
The financial institution is not obligated to produce the record until a specified period after the receipt of the record request, customer consent, or a court order for production after an in camera inspection. Additionally, orders to quash or provide protection or other remedies issued by the tribunal are not considered final orders and cannot be subject to interlocutory appeals.
Access to Bank Records
The subpoena is not needed before a probate is filed as the Texas Estates Code provides a remedy.
Accessing a decedent’s bank records before initiating a probate case can be facilitated through Chapter 153 of the Texas Estates Code. This chapter specifically addresses the access to accounts held by financial institutions for individuals who died without a valid will, known as intestate individuals. While subpoenas are typically used for accessing records, they are not necessary before initiating probate because the Texas Estates Code provides a remedy for this purpose.
Chapter 153 consists of three sections that serve different purposes in facilitating access to bank records. Section 153.001 defines key terms used throughout the chapter, including “account,” which encompasses various types of financial accounts as defined in Section 113.001. “Financial institution” is given the meaning assigned by Section 201.101 of the Finance Code, referring to institutions involved in financial services. The terms “P.O.D. account” and “trust account” carry the meanings assigned by Section 113.004, denoting specific types of accounts with their respective characteristics.
Section 153.002 clarifies that Chapter 153 does not apply to certain types of accounts. It excludes accounts that have a beneficiary designation, meaning accounts that explicitly designate beneficiaries to receive the funds upon the account holder’s death. Additionally, accounts known as P.O.D. (Payable on Death) accounts, which involve direct transfer of funds to designated beneficiaries upon the account holder’s death, are also excluded. Trust accounts established within a trust arrangement and accounts providing for a right of survivorship, automatically transferring ownership to surviving account holders upon the death of one account holder, are likewise not subject to this chapter.
Section 153.003 is relevant to obtaining court-ordered access to an intestate’s account information. It begins by defining an “interested person” as someone who has a property right or claim against the decedent’s estate, such as an heir, spouse, or creditor. This section grants the court the authority to issue an order requiring a financial institution to release account information. An interested person can apply for such an order, or the court may initiate it on its own motion. However, three conditions must be met for the court to issue the order: at least 90 days must have elapsed since the decedent’s death, there should be no pending petition for the appointment of a personal representative for the estate, and no letters testamentary or letters of administration should have been granted in relation to the estate.
These provisions in Chapter 153 establish guidelines to access an intestate individual’s bank records held by financial institutions. By adhering to the conditions outlined in the law, interested persons can seek court-ordered access to obtain the relevant account information, ensuring appropriate circumstances and court oversight in the release of such records.
Houston Lawyer to Probate an Estate in Texas
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