In In the Estate of Loftis, a husband and wife entered into a pre-marital agreement. No. 07-14-00135-CV, 2015 Tex. App. LEXIS 10940 (Tex. App.—Amarillo October 23, 2015, no pet. history).  After their marriage, they lived in a residence that was the husband’s separate property.  He then executed a will, created a revocable trust, and transferred the residence into the trust.  The wife was the initial trustee.  Later, the husband filed for divorce and removed the wife as trustee.  The husband died before the divorce became final.  The executor/trustee sued the wife for return of the residence and other assets, and the wife counterclaimed seeking to retain those assets.  The trial court granted summary judgment for the wife, determining that the agreement granted the wife a right to the residence and holding that the trustee had to convey the residence to her.  The executor/trustee appealed.  The executor/trustee argued that the house was no longer in the estate at the time of the husband’s death, and that the pre-marital agreement provided that upon the filing of a divorce petition that the residence would remain the husband’s separate property.  Another provision of the agreement stated that husband would provide that the wife would receive the residence and its contents after his death if they were not divorced.  The court held for the wife, and concluded that the pre-marital agreement did control the disposition of the residence as the marriage ended by death and not by divorce.  The executor/trustee also argued that another provision of the agreement provided that either party could manage that party’s separate property, including without limitation, the power to convey separate property “without taking into consideration any rights or interests of the other party.”  He argued that his provision allowed the husband to transfer the residence, his separate property, to the trust during the marriage.  The court disagreed and held that this provision had to be read in conjunction with the other provisions of the agreement.  Finally, the court sustained the executor/trustee’s issue that the trial court should not have ordered the trustee to convey the residence because the wife never raised a claim challenging the initial conveyance and seeking to void it.  The court held that the record did not support that remedy at this time and remanded for further proceedings.

Interesting Note: The court of appeals correctly reversed the trial court’s order requiring the trustee to convey the title of the residence to the wife. The wife’s claim would be against the estate for breach of the pre-marital agreement, which would be limited to monetary damages as the estate no longer owned the residence. A separate legal entity, the trust, owned the residence. The wife did not plead any claim that would void the initial conveyance. Interestingly, any equity claim for that type of relief may be difficult to sustain as the wife was the trustee when the residence was initially transferred to the trust, knew of the transfer, and apparently did not object to same.