Court Interprets Will’s Residuary Clause To Create A Determinable Fee Simple Estate

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In In re Estate of Morgenroth, a mother died testate with a will that gave specific devises to her two children, a son and daughter. No. 05-15-00777-CV, 2016 Tex. App. LEXIS 7857 (Tex. App.—Dallas July 25, 2016, no pet. history). The will contained a residuary clause:

All the remaining property, real and otherwise, of every kind and description, wheresoever situated, which I may own or have the right to dispose of at the time of my decease, I give, devise and bequeath to my surviving children, TIFFANY DAWN TRESCOTT and BUDDY LEE MORGENROTH, share and share alike, remainder to the survivor of them.

The daughter died ninety days after her mother, and the son took the position that her interest in the residuary estate belonged to the son. In the estate, the son filed a motion to interpret the will, and the parties filed competing motions for summary judgment requesting the court to determine whether the son was the sole heir to mother’s estate. The trial court construed the mother’s will as creating a life estate for daughter and son “during their lives, with any property of the Estate of [Mother] still in existence upon the death of the first of [Daughter] and [Son] to pass to the survivor of them.” The daughter’s spouse appealed.

The court of appeals described the difference between a determinable estate and a life estate:

A “fee simple absolute” is an estate over which the owner has unlimited power of disposition in perpetuity without condition or limitation. An “executory limitation” is an event which, if it occurs, automatically divests one of devised property. A fee simple estate subject to an executory limitation is called a “determinable fee simple estate.” This is a fee simple interest in every respect, except that it passes to another if the contingency happens. The recipient upon the contingency’s happening has an “executory interest.” A life estate is created by words showing intent to give the right to possess, use, and enjoy the property during life. There can be no life estate in property, real or personal, without a remainder. It may not be necessary always to name the remainderman, in which case the law would define him. But in such case the will must clearly and unequivocally provide for a life estate, thus to overcome the presumption that the testator intended to give the greater estate. Additionally, the life tenant may expressly be given unlimited power to dispose of the property during his lifetime; if such power is exercised, it defeats the remainderman’s interest in the disposed-of property. However, the life tenant may not devise any of that property that remains at her death. No particular language is required to make a life estate.

Id. The court construed the will to read that the mother intended to devise a one-half fee simple determinable interest to both son and daughter, rather than a life estate:

Because the residuary clause does not clearly and unequivocally provide a life estate, there is insufficient evidence to overcome the presumption that Mother intended to give her residuary in fee simple—the  greater estate… The second phrase, “remainder to the survivor of them,” clearly gives whatever interest Son or Daughter still holds in the residue to the other when the first one of them dies. The occurrence of this “executory limitation”—the event in which either sibling predeceases the other while holding any interest in the residue—automatically divests the predecessor of the remaining devised property and the surviving sibling—giving the surviving sibling an executory interest. To read these two phrases together—without nullifying the second phrase and while preserving the greatest estate possible in the first phrase—is to construe Mother’s devise to Son and Daughter as a determinable fee simple.

Id. The court concluded that the son held an executory interest in daughter’s share of mother’s residue; the contingency was daughter predeceasing son with some of mother’s residual estate. Because the daughter died before son while still holding a one-half interest in mother’s residue, the court determined that the son took that property.

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