Beneficiaries, Heirs, and Probate Estate Creditors

The legal concepts involved in property passing upon someone’s death can stump even the most experienced probate attorneys. Creditors and estate beneficiaries in probate litigation launch fierce battles concerning who has a right to certain estate property.

Generally, when someone passes away (that person is called a “decedent”), property passes to the people named in the decedent’s will (the people who are to receive the property are called “beneficiaries”). But if the property that the beneficiaries are supposed to receive has a debt on it, disputes can arise concerning whether the beneficiary or the creditor has priority.

In Meekins v. Wosniski, a recent case out of the Houston Court of Appeals, a beneficiary sought to stop the sale of estate property that was to go to the beneficiary under the decedent’s will. However, the estate property was subject to outstanding property tax debt. The administrator of the estate attempted to sell the property to pay the taxes and other expenses that arose in the estate administration. The beneficiary argued that, because his right to receive estate property arose at the moment the decedent passed away, his right to receive the property should take priority over the tax debt. The appeals court ruled in favor of the creditor, holding that the beneficiary’s right to receive estate property was subject to the creditors and to the executor’s proper administration of the estate.