Summary
The Texas Supreme Court considered whether spouses’ brokerage-account agreements and securities certificates created rights of survivorship in community property. The Court held that designations such as “JT TEN,” “Joint (WROS),” and “JTWROS,” when included in signed account agreements, satisfied the applicable statutory requirements. It further held that issuing securities certificates from those accounts did not revoke the survivorship rights, and it reversed and rendered in part and affirmed in part.
Topics
Practice areas
Questions Presented
- Whether account agreements using designations such as "JT TEN," "JTWROS," and "Joint (WROS)" satisfied the statutory requirements for creating rights of survivorship in community property.
- Whether Probate Code section 450 permitted survivorship rights to be established by designations appearing on securities certificates.
- Whether securities certificates issued from accounts governed by survivorship agreements retained those survivorship rights, or whether issuing the certificates constituted a disposition revoking the agreements under Probate Code section 455.
Holdings
- A written and signed account agreement using a joint-tenancy designation such as "JT TEN," "JTWROS," or "Joint (WROS)" is sufficient under Probate Code section 452 to create rights of survivorship in community property.
- Probate Code section 450 does not independently establish survivorship rights in the securities certificates because Part 3 of Chapter XI, including sections 451 through 462, is the exclusive means of establishing survivorship rights in community property between spouses.
- Issuing securities certificates in the spouses' names did not constitute a disposition under Probate Code section 455 and did not revoke the survivorship agreements. Certificates issued from accounts subject to valid survivorship agreements retained those rights.
Key quotations
“a joint tenancy cannot be held without rights of survivorship; such a joint agreement would be a tenancy in common.” (858)
“A “joint tenancy” or “JT TEN” designation on an account is sufficient to create rights of survivorship in community property under section 452.” (859)
“The issuance of securities in certificate form is not a “disposition” under the statute.” (861-862)
“The rights were not lost when the Holmeses later obtained some of their investments in certificate form.” (862-863)
Factual background
Thomas and Kathryn Holmes, who married in 1972, accumulated substantial brokerage accounts and securities during their marriage. Their account agreements and certificates used designations including "JT TEN," "JTWROS," and "Joint (WROS)," but the securities certificates were not signed by either spouse. After Kathryn died, her executor Douglas Beatty contended that the assets were community property passing partly under Kathryn's will, while Thomas's executor Harry Holmes II argued that the assets passed to Thomas by survivorship and then under Thomas's will.
Procedural history
The trial court held that some assets were jointly held with survivorship rights and that others were community property. The Texas courts of appeals issued two opinions, affirming in part, reversing and rendering in part, and remanding for further proceedings. The Texas Supreme Court granted review and consolidated the appeals because they involved substantially similar facts, arguments, and briefing.