In a decision delivered July 27, 2023, the Texas Court of Appeals, Fort Worth reaffirmed potential hazards for lenders concerning Texas inheritance laws. The case, Grooms et. al. v. The Bank of New York Mellon Trust Company, N.A. as Trustee et. al., 2023 WL 4780584 dealt with the aftermath of a reverse mortgage loan after the borrower passed away. While not creating any significant precedent, the case did highlight the complexity of Texas inheritance laws.
The reverse mortgage loan in question was taken out by Evelyn Grooms in 2006 on property that she had owned along with her late husband as community property. In 2001, her husband died intestate—that is, without a Will—and he was survived by Evelyn and three children. One of the three children was also a child of Evelyn while the other two were from a prior marriage. When taking out the loan in 2006, Evelyn stated that she was the sole owner. She was the only person who signed the reverse mortgage loan documents. After some time, Evelyn died intestate (the court did not specify the date).
