Also known as: estates' property · estate property · estate assets
Written by attorneys — see sources below.
Assets and interests that form part of a decedent's probate estate and are subject to administration by the personal representative along with claims of creditors.
Eugene Ellsworth died leaving an office building encumbered by a mortgage to Evergreen Bank. The will devised the building to Edgar Evers and directed the executor to pay all obligations from residuary assets. The executor sought instructions on whether estate funds must clear the lien before transfer. The court ruled that the building passed subject to the mortgage because the will lacked an express exoneration clause.
Emily Ellis served as personal representative and sold estate equipment to Elemental Pharmaceuticals. The buyer paid value and had no actual knowledge of any restriction on the sale. After the transaction a creditor challenged the conveyance. The court held the buyer protected and the equipment no longer part of the estate's property.
Elliot Edmonds's surviving spouse claimed ERISA pension benefits after his death. The probate court attempted to include the benefits in the estate for distribution to children from a prior marriage. The court determined the benefits never became estate's property because they were governed by federal anti-alienation rules.
Isaac Boggs began working for South Central Bell in 1949 and remained employed until his retirement in 1985. He was married to Dorothy Boggs from 1949 until her death in 1979, and the couple had three sons. After Dorothy died, Isaac married Sandra Boggs in 1980, and they remained married until Isaac's death in 1989. Upon retirement, Isaac received a lump-sum distribution of $151,628.94 from the Bell System Savings Plan, which he rolled over into an Individual Retirement Account worth $180,778.05 at his death. He also received 96 shares of AT&T stock from the Bell South Employee Stock Ownership Plan and a monthly annuity of $1,777.67 from the Bell South Service Retirement Program. Dorothy's will bequeathed one-third of her estate to Isaac outright along with a lifetime usufruct in the remaining two-thirds, with naked ownership passing to the sons. A 1980 Louisiana judgment of possession ascribed to Dorothy's estate a community property interest in Isaac's Savings Plan account valued at $21,194.29. After Isaac's death, Sandra began receiving a survivor annuity and other benefits. The sons filed suit in Louisiana state court claiming a portion of the retirement benefits under Dorothy's will and Louisiana community property law. Sandra then filed a declaratory judgment action in the United States District Court for the Eastern District of Louisiana asserting that ERISA preempts the sons' claims. The District Court granted summary judgment against Sandra. The Fifth Circuit affirmed. The Supreme Court granted certiorari.
View caseEnzo Eastwood's estate faced numerous tort claims from a product liability incident. A proposed class settlement sought to treat the estate assets as a limited fund for all claimants. The court approved the structure only after confirming that the assets constituted the estate's property available for equitable distribution.
Fibreboard Corporation, primarily a timber company, manufactured asbestos-containing products for high-temperature industrial applications from the 1920s through 1971. Beginning in the 1970s and accelerating through the 1980s and 1990s, Fibreboard faced thousands of personal injury claims each year from asbestos exposure. From May 1957 through March 1959, Continental Casualty Company issued Fibreboard a comprehensive general liability policy with per-occurrence and per-claim limits but no aggregate limit. Pacific Indemnity Company issued a similar policy for 1956-1957. Fibreboard initiated coverage litigation against both insurers in California state court in 1979. In 1990 the California trial court held the insurers responsible for indemnification of claims involving exposure before their policies expired and required them to pay full defense costs. Fibreboard began structured settlements in 1988, initially paying 40 percent up front with the balance contingent on coverage victory, then shifting in 1991 to full assignments of coverage rights. By December 1992 Fibreboard had deferred settlement obligations exceeding $1.2 billion, all contingent on prevailing in the coverage dispute. After the insurers lost at trial in early 1993, they joined global settlement negotiations conditioned on achieving "total peace" through a mandatory class action. Negotiators reached the Global Settlement Agreement shortly before midnight on August 27, 1993, providing $1.525 billion from the insurers and $10 million from Fibreboard to fund a trust for class claims. The Trilateral Settlement Agreement, executed the same night as a backup, committed the insurers to supply up to $2 billion if the global settlement failed. On September 9, 1993, named plaintiffs filed suit in the Eastern District of Texas seeking certification of a mandatory class under Rule 23(b)(1)(B) that included persons exposed to Fibreboard asbestos who had not sued or settled before August 27, 1993, persons who had dismissed claims without prejudice, and their relatives, but that excluded pending claimants and those who had settled while retaining malignancy rights. After Continental and Pacific had obtained leave to intervene as party-defendants, the District Court provisionally granted class certification, enjoined commencement of further separate litigation against Fibreboard by class members, and appointed a guardian ad litem to review the fairness of the settlement to the class members. After an 8-day fairness hearing, the District Court certified the class and approved the settlement as fair, adequate, and reasonable under Rule 23(e). The Fifth Circuit affirmed. After this Court vacated and remanded in light of Amchem Products, Inc. v. Windsor, the Fifth Circuit reinstated its affirmance in a per curiam opinion. The Supreme Court granted certiorari.
View caseEwan Eckhart's estate included a vacant lot subject to subdivision covenants limiting use to single-family residences. The executor proposed selling the lot for commercial development. Neighboring owners sued to enforce the covenants against the estate's property.
In 1902, a trust indenture established Kingsbury Place as a private subdivision in St. Louis, with covenants requiring maintenance as desirable residence property of the highest class. The indenture empowers trustees and property owners to enforce its provisions against encroachment or injury. Except for one vacant lot, the subdivision features spacious two and three-story homes used exclusively as private residences. Louise Woodruff Johnston, owner of the house at #4 Kingsbury Place, died on January 14, 1973. Her will directed the executor, Mercantile Trust Co., to cause the home to be razed and the land sold, with proceeds transferred to the residue of the estate. Following Johnston's death, neighboring property owners and trustees for the Kingsbury Place Subdivision filed suit against the executor seeking an injunction to prevent demolition of the house. The plaintiffs contended that razing the home would adversely affect their property rights and the community. During trial, uncontradicted testimony established that the current value of the house and land totaled $40,000, while the empty lot would fetch no more than $5,000 after $4,350 in demolition costs. The St. Louis Commission on Landmarks and Urban Design had designated Kingsbury Place as a city landmark due to its architectural significance. Witnesses testified that demolition would depreciate adjoining property values by an estimated $10,000 and create a break in the urban design continuity. The trial court dissolved the temporary restraining order and ruled against the plaintiffs on all issues. The plaintiffs then appealed the denial of their petition to the Missouri Court of Appeals.
View caseEverest Holdings owned property in a school district with low tax revenue. The district argued that state equalization formulas treated local property as part of a statewide educational estate. The court rejected the claim and held that each district's property remained outside any centralized estate's property.
In the summer of 1968 Mexican-American parents whose children attended elementary and secondary schools in the Edgewood Independent School District in San Antonio Texas brought a class action. They sued on behalf of schoolchildren throughout the state who were members of minority groups or who were poor and resided in school districts having a low property tax base. Named as defendants were the State Board of Education the Commissioner of Education the State Attorney General and the Bexar County Board of Trustees. The complaint was filed in the United States District Court for the Western District of Texas. A three-judge court was impaneled in January 1969. The Texas system of financing public education originated with the state's first constitution in 1845. It evolved through constitutional amendments permitting local school districts to levy ad valorem taxes for school buildings and maintenance. These local revenues were supplemented by distributions from the state's Permanent School Fund established in 1854 and the Available School Fund. In the late 1940s the legislature enacted the Minimum Foundation School Program. Under the program the state supplies approximately 80 percent of the cost of teacher salaries operating expenses and transportation. Each district contributes the remaining 20 percent through a Local Fund Assignment. The assignment is calculated by an economic index reflecting relative taxpaying ability. Every district also levies additional local property taxes beyond the assignment to supplement its foundation grant. For the 1967-1968 school year the Edgewood Independent School District had an average assessed property value of $5960 per pupil and a median family income of $4686. It raised $26 per pupil through local taxation at a rate of $1.05 per $100 of assessed valuation. It received $222 per pupil from the Foundation Program and obtained $108 in federal funds for a total of $356 per pupil. By comparison the Alamo Heights Independent School District had an assessed property value exceeding $49000 per pupil and a median family income of $8001. It raised $333 per pupil locally at a rate of $0.85 per $100 received $225 from the Foundation Program and $36 in federal funds for a total of $594 per pupil. Similar disparities in per-pupil expenditures existed throughout the state. They were largely attributable to differences in the amount of taxable property within each district. In December 1971 the three-judge District Court rendered judgment holding the Texas school finance system unconstitutional under the Equal Protection Clause of the Fourteenth Amendment. The State appealed. The Supreme Court noted probable jurisdiction in 1972 to consider the constitutional questions presented.
View caseProperty subject to a general testamentary power created by another is treated as the estate's property when the probate estate is insolvent. Creditors may reach the appointive assets to the same extent as if the donee had owned them outright.
Supporting sources
A nongeneral power does not expose appointive assets to the donee's creditors. The donee cannot appoint to herself, her estate, or her creditors, so the property remains outside the estate's property.
Supporting sources
An express direction in the will to pay debts from residuary assets may require exoneration of a specifically devised liened parcel. The devisee then receives the property free of the lien if the clause covers the obligation.
Supporting sources