Court Affirms Order Requiring Partition of Property Where Fiduciary’s Homestead Argument Failed

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In Byrom v. Penn, Byrom was appointed executor of his mother’s estate, and he was later removed as executor for breach of fiduciary duty by using estate funds to build a house for himself. No. 12-15-00033-CV, 2016 Tex. App. LEXIS 7680 (Tex. App.—Tyler July 20, 2016, no pet. history).  The court imposed a constructive trust in the amount of $200,000.00 on Byrom’s home.  Later, a different court rendered an order authorizing a receiver to sell the home, pay fees and expenses, deposit the balance of funds, not to exceed $200,000.00, into the registry of the court, and pay any remaining funds to Byrom and the other two co-owners, Dimple Byrom and Dorothy Berry. Byrom and his wife, Dimple, appealed and argued that the order of sale was void because it violated their constitutional and statutory homestead rights.

The court of appeals affirmed.  The court held that “the homestead and exemption laws of this state are not ‘the haven of wrongfully obtained money or properties’” and “the homestead protection afforded by the Texas Constitution was never intended to protect stolen funds.”  Id. Regarding Byrom, the court concluded: “Because the record indicated that Byrom had paid for the construction of the home with money he wrongfully obtained from his mother’s estate, he was not entitled to use the homestead law to his advantage.” Id. Further, regarding Dimple, the court concluded: “A wife cannot acquire homestead rights in property held in trust by her husband that defeat or impair the rights of the beneficiary of the trust. Accordingly, Dimple had no homestead rights in the property.” Id.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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