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You Can’t Have It All

by | Oct 20, 2021

Can a will beneficiary accept benefits under the will and then later contest that same will, hoping to receive more through the contest? According to a 2021 Texas Supreme Court opinion, the answer is no.

1. Facts

The will beneficiary accepted a specific bequest of a mutual fund worth over $143,000. The beneficiary later contested the will, claiming lack of testamentary capacity and undue influence. If the will contest succeeded, the beneficiary stood to receive over $460,000.

2. Court Ruling

The beneficiary argued that the acceptance of benefits doctrine did not apply because the value of the bequest received was less than the potential recovery in the will contest. The Texas Supreme Court disagreed and dismissed the will contest. The court held “equity does not permit the beneficiary of a will to grasp benefits under the will with one hand while attempting to nullify it with the other.”

The result would have been different if the mutual fund had passed to the beneficiary on a non probate basis. However, her only entitlement to the mutual fund was as the stated beneficiary of the testator’s specific gift in the will.

The court also recognized that the beneficiary’s acceptance of benefits must be voluntary so that “an opportunistic executor [cannot] offensively deny a would-be will contestant’s claim by partially distributing the estate to an unwitting beneficiary to avoid a will contest.”

3. Action Point

Before a beneficiary accepts assets under a will, the beneficiary should be sure that he or she does not desire to contest the will for a potentially larger share.