Opinion ID: 1529852
Heading Depth: 1
Heading Rank: 3

Heading: income earned during the administration of the estate

Text: During the administration of Smith's estate, substantial income was earned by the mineral interests passing under sections 4 and 5 of Article VI and the property passing to the charities under Article VI, § 8. The trial court ruled that the beneficiaries of the mineral interests were entitled to the income earned by those interests during the administration of the estate. The trial court also ruled that the beneficiaries of Article VI, § 9 were entitled to the income earned by the property passing under section 8 of Article VI. The court of appeals affirmed both of these rulings. We affirm in part and reverse and render in part. Under the Probate Code, the property bequeathed to the charities under Article VI, § 8 vested in the charities immediately upon Smith's death. TEX.PROB.CODE ANN. § 37 (Vernon 1980). As the owners of that property, the charities are entitled to any interest that their property generates. Therefore, from the moment of Smith's death, any income earned by the property bequeathed to the charities belonged to them. Likewise, the income earned by the mineral interests during the administration of the estate also belongs to the beneficiaries of those interests. See Stiff v. Fort Worth Nat'l Bank, 486 S.W. 2d 859, 862 (Tex.Civ.App.Eastland 1972, writ ref'd n.r.e.). We reverse the judgment of the court of appeals that the charities are not entitled to all of the income generated from the property bequeathed to them. We affirm the court of appeals' judgment that the beneficiaries of the mineral interests are entitled to the income earned by those interests. We reverse the judgment of the court of appeals as to the classifications of the bequests discussed herein and hold that all estate and inheritance taxes are payable; first, from the personal property residuary under Article VI, § 9; second, from the real property residuary under § 7; third, from the specific bequest in § 8; fourth, pro rata from the general bequests in sections 1, 2 and 3; and fifth, pro rata from the specific bequests in sections 4, 5 and 6 to the extent necessary to satisfy all estate and inheritance taxes.