W. Marvin Rush II: Learning From the Estate of Nation's Largest Commercial Truck Dealer
If you've picked up a newspaper in San Antonio or perused local news websites in the past few days, you may have seen headlines concerning the death of W. Marvin Rush II in May of this year. For those not familiar with the name, Mr. Rush was the founder and long-time leader of Rush Enterprises Inc., the nation's largest commercial truck dealer. Based out of New Braunfels, the publicly traded company operates over 100 Rush Truck Centers in 22 states. It employs over 6,000 individuals, and cleared almost $5 billion in revenue last year.
While the life and death of such an accomplished individual is story enough in and of itself, perhaps the most interesting new development has been the will contest between his son, W.M. "Rusty" Rush III, and his third wife, Barbara Rush, arising in Guadalupe County. Central to this contest is who will inherit the deceased's stock in the company he founded, currently valued at a cool $74 million. The cliff notes to the probate battle over the trucking fortune goes something like this:
On June 4, 2018 (18 days after his father's passing), Rusty submitted for probate a will executed by his father in 2006 which leaves Marvin's stock to Rusty outright. A few weeks later on June 29, Marvin's third wife Barbara entered an appearance in the case, both opposing Rusty's 2006 will and submitting her own will, executed by her husband in 2013*. Though this will does not mention the stock specifically, Barbara argues it therefore falls into her late husband's residuary estate, which goes to her. The 2013 will also disinherits Rusty entirely. On July 9, Rusty filed an opposition to the 2013 will, stating his father lacked testamentary capacity at the time of execution, thus invalidating it in favor of the 2006. He argues that his father had been suffering from dementia at least 5 to 8 years before his death, “thus placing Mr. Rush’s mental capacity in doubt from May 2010 onward.”
These are just the basic facts of the case thus far, which is really still in its initial stages. No matter how tedious, draw-out, or complicated it gets from here, though, the ultimate question will remain the same: Did W. Marvin Rush II have testamentary capacity when he executed his last will and testament in 2013? The answer to this question will dictate who inherits the $74 million worth of Rush Enterprise Stock.
While most people will never run the risk of finding themselves in a situation like the Rush family, testamentary capacity affects everyone and can absolutely dictate how the assets of one's estates are distributed. Given the current interest and attention on the subject, I though it would be a good time for a general discussion on what testamentary capacity is and why it is so important for effective wills.
Testamentary Capacity, in its most basic form, is defined as a two-part test. The first, as stated in Section 251.001 of the Texas Estates Code, is fairly black and white standard of age and legal status. An individual must (1) have attained eighteen years of age, (2) be or have been lawfully married, or (3) be a member of the armed forces of the United States or of the auxiliaries thereof or of the maritime service.
Once the age and status requirement has been satisfied, the second part of the test is that an individual must then be found to be "of sound mind." See Section 256.152(a) Texas Estates Code. This subjective concept has evolved over time, with the current standard also being among the oldest. In order for an individual to be of sound mind, the evidence must support a jury finding that the individual possesses the following characteristics:
Sufficient ability to understand the business in which he is engaged;
Sufficient ability to understand the effect of his act in making the will;
The capacity to know the objects of his bounty;
The capacity to understand the general nature and extent of his property; and
“[M]emory sufficient to collect in his mind the elements of the business to be transacted, and to hold them long enough to perceive, at least their obvious relation to each other, and to be able to form a reasonable judgment as to them.” Prather v. McClelland, 13 S.W. 543, 546 (Tex. 1890).
An extremely important concept in applying the forgoing test is the lucid interval doctrine. This simple states that testamentary capacity on the day the will was executed is all that is required. Croucher v. Croucher, 660 S.W.2d 55, 57 (Tex. 1983). Evidence of incompetency at other times is admissible only if it demonstrates that condition persists and has some probability of being same condition that existed at time of will’s making. Lowery v. Saunders, 666 S.W.2d 226, 236 (Tex. App.—San Antonio 1984, writ ref’d n.r.e.). In other words, a Court will try determine an individual's soundness of mind at the time of execution. If a party wants to use evidence showing lack of soundness of mind from times other than the execution, the evidence "must show that the testator’s condition persisted and probably was the same as that which existed at the time the will was signed." In re Neville, 67 S.W.3d at 525. Lay opinion testimony of witnesses’ observations of the testator’s conduct, either before or after the execution of the will, is admissible to show incompetency. Kenney v. Estate of Kenney, 829 S.W.2d 888, 890 (Tex. App.—Dallas 1992, no writ).
So what does all this mean for a real situation like the Rush family is facing. In short, it means that, in order for Marvin Rush's 2013 will to be invalidated, Rusty must show that his father was not of sound mind on the day the will was executed. In that respect, a finding that Marvin suffered from dementia does not on its face render him without sound mind. Instead, a fact finder must apply the lucid interval doctrine, weighing any medical diagnosis and witness testimony as evidence of whether an alleged incapacity persisted at the time of execution.
If you or a loved one are concerned with future will contests, there are ways to protect an individual's last will from the ambiguity of a courtroom. First, draft a will as soon as possible. If there are any medical issues potentially impacting your soundness of mind, time is not on your side. Second, document your execution ceremony as thoroughly as possible. It is not uncommon for attorneys to arrange ceremonies to be filmed, with a physician asking the testator questions to determine mental capacity. This makes it very difficult to argue you were not of sound mind later. The third and final suggestion is less for the testator, and more for those who care about him or her. If you feel like your loved one is in lacking sound mind and might be taken advantage of, do something. Don't wait until it is too late.
* The 2013 will is technically 2 wills, due to the fact that the original was damaged in Hurricane Harvey when the Houston drafting firm FizerBeck was flooded, and a second one was drafted to properly reflect the terms of the original.