The probate process can present a number of challenges for surviving spouses. These challenges can include figuring out how to pay personal expenses when the primary liquid assets are tied up in probate. Texas law allows for a widow’s allowance to cover these expenses.
The court in Estate of Nielsen, No. 06-17-00055-CV (Tex. App.–Texarakana 2017) addressed whether the widow’s allowance is to be paid out of her separate property or the community property estate that would pass to another beneficiary.
Facts and Procedural History
The decedent was survived by his wife. His wife filed an application for a family allowance pending the probate case being closed.
The primary estate beneficiary under the decedent’s will opposed the request.
The probate court granted the surviving wife $137,100 and provided that this amount was to be charged against the entire community property estate.
The beneficiary filed an appeal, arguing that the probate court erred as it should have allowed the family allowance against the wife’s separate property and not the community property.
Widow’s Allowance Under Texas Law
Texas law has provided a widow with a living allowance. The Texas Estates Code refers to this as the “family allowance.”
The family allowance is for the support of a decedent’s surviving spouse, minor children, and adult incapacitated children after the decedent’s death.
Unless an application and verified affidavit are filed sooner, the court will immediately fix a family allowance after the inventory, appraisement, and list of claims of an estate are approved.
In independent administrators, the independent administrator is able to set this allowance.
According to Texas law, the family allowance must be sufficient for the maintenance of the decedent’s surviving spouse, minor children, and adult incapacitated children for one year from the date of the decedent’s death. It may be paid in a lump sum or installments, as ordered by the court or as determined by the independent administrator.
This provision ensures that the family has access to funds during the difficult transition period after the decedent’s passing.
Texas law also establishes the method of payment of the family allowance and the preference of the family allowance over all other debts of or charges against the estate, other than Class 1 claims (for funeral and last expense costs). This means that the family allowance takes priority over other debts or claims against the estate, ensuring that the family has access to the necessary funds.
What these rules do not say is which share of the estate the family allowance is to be paid out of. That brings us back to this court case.
The Entire Community Share Bears the Cost
As noted by the court, this allowance in this case was paid out of the entire community property estate. This is the share of assets that the husband and wife accumulated together while they were married.
Texas enacted a new Estates Code in 1955 that provided continued and modified the requirements for the family allowance. This law required:
- The trial court should fix a family allowance for the surviving widow in an amount sufficient for her maintenance for one year from the time of the decedent’s death.
- The court is to consider the circumstances then existing and base the amount of the allowance on the facts anticipated in that first year.
- In its order, the court is required to state the amount of the allowance, provide how the same would be payable, and direct the personal representative to pay it in accordance with law.
- The allowance was then to be paid in preference to all other debts or charges against the estate, except expenses of the funeral and last sickness of the deceased.
This law is substantially similar to the current family allowance rules, which were described above.
Given that the Texas legislature changed the law without changing this provision, the appeals court concluded that the Texas legislature adopted the prior case law. The prior case law said that the amount was paid out of the entire community property estate.
Thus, the appeals court concluded that the family allowance is to be paid out of the community property estate, not just the widow’s separate property.
Why This Matters
This ruling is important as it dictates who has to bear the cost of the family allowance. Consider a case where a husband dies without a will. The husband had children from a prior marriage. The surviving spouse then has to divide up the assets with her step-children. The step-children get 2/3 of the separate property and 1/2 of the community property. With this ruling, the step-children are basically paying 1/2 of the family allowance. Had the court ordered that the family allowance be charged to just the surviving spouse’s 1/2 of community property, the step-children would not be funding any of the family allowance.
Surviving spouses often face financial challenges during the probate process, especially when primary liquid assets are tied up in probate. However, Texas law provides a widow’s allowance to cover these expenses. This case addresses who should bear the cost of the family allowance–the spouse or the other heirs.
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