Texas Estates Code Sec. 201.151: Determination of Advancement; Date of Valuation

This section governs when a lifetime transfer is treated as an advancement against an heir’s intestate share.

The Statutory Rule

Sec. 201.151. DETERMINATION OF ADVANCEMENT; DATE OF VALUATION.

(a) If a decedent dies intestate as to all or part of the decedent's estate, property that the decedent gave during the decedent's lifetime to a person who, on the date of the decedent's death, is the decedent's heir, or property received by the decedent's heir under a nontestamentary transfer under Subchapter B, Chapter 111, or Chapter 112 or 113, is an advancement against the heir's intestate share of the estate only if:

(1) the decedent declared in a contemporaneous writing, or the heir acknowledged in writing, that the gift or nontestamentary transfer is an advancement; or

(2) the decedent's contemporaneous writing or the heir's written acknowledgment otherwise indicates that the gift or nontestamentary transfer is to be considered in computing the division and distribution of the decedent's intestate estate.

(b) For purposes of Subsection (a), property that is advanced is valued as of the earlier of:

(1) the time that the heir came into possession or enjoyment of the property; or

(2) the time of the decedent's death.

Explanation

What it does: This section defines when a lifetime transfer is treated as an advancement against an heir’s intestate share and establishes how an advancement is valued.

Important limit (read with Section 201.152): Even if there is a contemporaneous writing or written acknowledgment that would satisfy this section, the transfer is not considered in computing the division and distribution if the recipient did not survive the decedent, unless the decedent’s contemporaneous writing provides otherwise.

When the section applies (in sequence): This section applies only if:

1. the decedent dies intestate as to all or part of the estate; and
2. the recipient is an heir on the date of the decedent’s death; and
3. the survival requirement in Section 201.152 is satisfied (or the writing overrides it).

Key concept: Section 201.151 answers, “Is this transfer documented as an advancement?” Section 201.152 answers, “Is the documented transfer counted at all?”

Common pitfall

A contemporaneous writing under Section 201.151 does not by itself require hotchpot accounting if the recipient predeceased the decedent. In that circumstance, Section 201.152 disregards the transfer unless the writing expressly provides otherwise.