F+B Represents Guardian in Significant Estate Tax Issues

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F+B recently represented the guardian of his great-aunt’s estate in Limestone County, Texas. The case involved a guardianship estate of approximately $13 million, which consistent of significant money generated from some oil and gas leases inherited from the great-aunt’s grandparents.

The case became was complicated by the provisions of the grandparents’ Wills from the 1950’s. Under those Wills, the grandparents gave a life estate in the mineral interests to the great-aunt but then left the remainder interest upon her death to certain other family members. Under the Texas Open Mines Doctrine, the money collected from the mineral interests had to be segregated as it was collected, as far back as the 1970’s, but the great-aunt had never segregated the funds.

After the great-aunt became incapacitated and a guardian was appointed for her, the guardian was required to go back and trace the mineral interests and segregate those interests after the fact. At the same time, the reallocation of the income resulted in significant tax issues that required prior tax returns to be amended and taxes properly allocated to the appropriate parties. F+B assisted the guardian in ensuring that the tracing of the mineral income occurred correctly, and we worked with a large international accounting firm in Houston to work through the tax issues and the accounting issues involved. Once all of the issues were sorted out, F+B assisted the guardian in presenting the information to the court and obtaining the Court’s approval of all that had to be resolved in the case.

Guardianship cases can often involve accounting and tax issues. The attorneys at Ford + Bergner frequently assist client in navigating all of these issues.

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