This column first appeared in the San Antonio Express News and other Hearst Newspapers on August 17, 2020.
Dear Mr. Premack: Can you list an executor and no beneficiary in a last will and testament? All residue goes to the executor. - C.O.
Your question is deceptive in its simplicity. Look at the way you phrased your question, followed by a concrete statement. Are you asking whether you can refrain from including a beneficiary, or are you asking if the consequences of refraining from including a beneficiary are that the executor gets (or distributes) the estate? Let’s look at the issue from both angles.
Can you sign a Will that appoints an Executor but does not list any beneficiaries (devisees)? Yes, just like you can decide that you’ll never brush your teeth, or you can decide that you’ll drive your car into a tree. You and your family will not like the results of any of those choices. A Will that fails to list beneficiaries is still a valid legal Will if it meets the requirements of Chapter 251 of the Texas Estates Code. It is just a bad decision.
What are the consequences of signing a Will that does not list any devisees? It can be admitted to probate, can determine who will manage your estate (your executor), can allow the executor to act without court supervision, can allow the executor to act without posting an expensive bond, and can allow the Executor to access your resources to pay your debts and your taxes. But it does not tell the Executor how to distribute the remaining assets in your estate, and in that respect under state law your assets pass as though you did not have a Will at all.
When you die without a Will, two things can happen. First, your assets might pass to others based on arrangements you have made outside your Will. You may have accounts with rights of survivorship or pay-on-death designations. You may have an IRA with a designated beneficiary. You may have life insurance payable to a particular person. They will get those assets because of the contracts you have with the custodians of those assets.
Second, any assets that do not pass by contractual arrangements pass according to state laws of descent and distribution. The Executor named in your Will is going to have to ask the court where your Will was probated to conduct a determination of heirship proceeding. An outside attorney will be appointed by the court to represent the unknown heirs, and your Executor (or the people who think they should be heirs at law) will make their cases to the court. Based on the statute and the familial facts, the court will decide who should inherit.
So, your Will really should include very specific instructions from you about who gets what. Your instructions are likely quite different than the default provided by state law, and the point of the Will is for your instructions to take priority. It is legally possible to say “All residue goes to my Executor” which is, of course, a specific instruction about your intentions. It is also possible to say “I grant my Executor the power to appoint the residue of my estate” which empowers your Executor to choose to whom your estate will be distributed.
Your Will should also carefully identify specific assets if there could be any doubt. Take the recent case ConocoPhillips v Ramirez before the Texas Supreme Court. Ramirez owned a ranch with oil and gas. The Will said that all “interest in and to Ranch ‘Las Piedras’” passed to person A. Person B argued that only the surface rights passed to person A so the oil would default to person B. The court decided that whenever Ramirez called the Ranch “Las Piedras” over many decades that phrase just meant the surface rights and pointed out that the quote marks around “Las Piedras” in the Will gave it that special meaning. Is that truly what Ramirez wanted? Did Ramirez type the Will or did an inexperienced lawyer include the quote marks? It was Ramirez’s job to be explicit, and when there was ambiguity the case had to go all the way to the Texas Supreme Court.
The moral of the story: be explicit about the identity of your devisees in your Will and be explicit about which assets go to which person. That takes time, good judgment, and good communication with your experienced estate planning lawyer.
Paul Premack is a Certified Elder Law Attorney, handling Wills and Trusts, Probate, and Elder Law issues. He is licensed to practice law in Texas and Washington. View past legal columns or submit free questions on those legal issues via www.Premack.com.