## Facts

- Lois Adams Dyer died in an automobile accident caused by Sara M. Croom.
- Roland Edward Dyer obtained a default wrongful-death judgment against Croom for approximately $1.08 million.
- After the accident, but before being served in the wrongful-death suit, Croom’s uncle died, leaving Croom a one-tenth interest in an estate valued at about $2,013,135 (approximately $200,000).
- Croom, while insolvent and aware a tort claim existed, executed a statutory “Instrument of Disclaimer and Other Actions” under Texas Probate Code § 37A.
- The disclaimer caused Croom’s share to pass to the remaining beneficiaries as if Croom had predeceased the uncle.
- Dyer sued Croom, other heirs, and estate representatives, alleging the disclaimer was (1) an avoidable fraudulent transfer under TUFTA and (2) part of a conspiracy/common-law fraud scheme to keep assets from satisfying his judgment.
- The trial court granted summary judgment against Dyer on the disclaimer/fraudulent-transfer theory; conspiracy/common-law fraud claims were severed and not decided on the merits in this appeal.

## Issues

1. Whether a will beneficiary may effectively disclaim an inheritance under Texas Probate Code § 37A even if the disclaimer defeats an existing creditor’s ability to reach that property.
2. Whether a § 37A disclaimer constitutes a “transfer” of an “asset” avoidable as an actually fraudulent transfer under TUFTA, Tex. Bus. & Com. Code § 24.005(a)(1).

## Decision

- The court affirmed summary judgment for the defendants.
- A beneficiary may disclaim under § 37A even if the result prevents a creditor from reaching the disclaimed inheritance.
- The disclaimer was not a “transfer” under TUFTA because, by statute, the disclaimed property is treated as never having become the disclaimant’s property.

## Legal Principles

- Under Texas Probate Code § 37A, a valid disclaimer causes the disclaimed property to pass as if the disclaimant predeceased the decedent.
- Because a statutory disclaimer relates back to the decedent’s death, the disclaimed property does not become part of the beneficiary-debtor’s estate and is not reachable by the beneficiary’s creditors through that beneficiary.
- TUFTA applies to a debtor’s transfer of an asset or interest the debtor owns or controls; a § 37A disclaimer is not a TUFTA “transfer” because the beneficiary is treated as never having owned the disclaimed property.
- Courts will not create creditor-protection limits on disclaimers absent statutory language; any such limits are for the legislature.

## Conclusion

The court held that Texas’s disclaimer statute permits an insolvent beneficiary to disclaim a testamentary inheritance even when doing so defeats a judgment creditor, and it further held that the disclaimer is not a TUFTA “transfer” subject to avoidance as a fraudulent conveyance.


Dyer v. Eckols, 808 S.W.2d 531 (Tex. App.—Houston [14th Dist.] 1991, writ dism’d w.o.j.)