A bank holding your late husband’s checking account has a copy of the will. It has a copy of the court order admitting the will to probate. It knows you are the residuary beneficiary. So why is it still sitting on the money six months later — and why did it sue you?
The answer usually comes down to one document the bank asked you to sign and you refused: an indemnity agreement. Banks routinely ask beneficiaries to sign one before releasing estate funds. It is not a legal requirement, and you can say no. But saying no has consequences, because a bank that cannot get comfortable has its own remedy — it can file an interpleader, hand the money to the court, and walk away. The question is when a bank is actually entitled to do that.
The Ninth Court of Appeals in Beaumont answered that question in Bank of America, N.A. v. Karen A. Brunner, No. 09-24-00131-CV (Tex. App.—Beaumont May 14, 2026, no pet.) (mem. op.). A widow won at trial on both the interpleader and a declaratory judgment claim, and collected her attorney’s fees. The court of appeals reversed all of it. The reason is worth understanding, because it turns on a timing rule that catches a lot of people off guard.
Facts & Procedural History
Joel T. Brunner died on March 4, 2023, leaving a will dated August 17, 1994. His widow, Karen A. Brunner, survived him.
Joel’s will made a handful of specific bequests: $5,000 to his brother Ronald A. Brunner; $1,000 each to his sister Bambi Pesce, his nephew Walter H. Peters III, his niece Heather L. Maybee, his nephew Roderick M. Maybee IV, and his niece Rachel B. Pesce; and $500 per month to his mother, Ella May Townsend, until the payments totaled $25,000 or she died. Everything left over — the residuary — went to Karen.
In March 2023, Karen applied to probate the will as a muniment of title in Montgomery County. The court signed an order admitting it. That order let the beneficiaries collect assets without an administration, and it said the people entitled to a particular asset were “further entitled to deal with and treat the properties to which they are entitled in the same manner as if the record title were vested in their name.”
That should have ended it. Karen went to Bank of America to close out Joel’s checking account, which held $19,250.35. Counsel for the two sides started emailing in June 2023.
The bank asked Karen’s lawyer to confirm that eight items were resolved — Joel’s debts, each of the six specific bequests, and the bequest to his mother. Karen’s counsel confirmed all of it, including that the $5,000 “was paid from the Estate to [Joel]’s brother, Ronald A. Brunner.” The bank then asked for a death certificate for Ella May Townsend, which led to a back-and-forth over Harris County probate records.
Then the story changed. On July 21, 2023, Karen’s counsel wrote back: “Actually – reading more closely – Ronald Brunner died in 2013 (predeceasing [Joel]).” So the $5,000 had not been paid to Ronald at all. Karen followed up on August 7, saying Ronald died penniless and intestate in 2013, that she and Joel had paid for his funeral, and that she had no death certificate for him.
The bank then asked the question that mattered: did Ronald leave any descendants? Karen said he never married and had no children. She also asked the bank why it wanted to know.
On August 9, the bank’s lawyer proposed a Distribution, Release, and Indemnity Agreement. It would have put Karen’s representations in writing — that the bequests were satisfied and that Ronald died in 2013 with no descendants — and released the funds. Karen’s counsel confirmed she would not sign it.
Eight days later, on August 17, 2023, Bank of America filed a petition in interpleader under Rule 43 in County Court at Law No. 6 in Montgomery County, naming Karen and unknown descendants of Ronald as defendants. It asked to deposit the $19,250.35 into the court’s registry and be released from the case. At the bank’s request, the court appointed an attorney ad litem for the unknown claimants.
Karen fought back hard. She answered, filed a declaratory judgment counterclaim asking the court to declare her the owner of the funds, and moved for summary judgment. She backed it up with her own affidavit, unsworn declarations from John Denton and Keith McAfee — two men who had known Ronald and his family for more than 55 years — and the ad litem’s report. The ad litem, Olympia Sacaciu, searched obituaries, social media, and genealogy sites and found no marriage and no children.
Here is the part that decided the appeal: every one of those pieces of evidence was created after August 17, 2023. Karen’s affidavit was dated August 23. The declarations, the ad litem’s appointment, and her investigation all came later. The bank hammered on that point — you cannot use evidence that did not exist yet to prove the bank should not have been worried.
The trial court sided with Karen anyway. It denied the interpleader on October 23, 2023, granted her declaratory judgment on November 16, and after a February 2024 trial on fees, awarded her $6,867.50 in attorney’s fees plus 8.5% post-judgment interest. Bank of America appealed.
When Can a Bank Interplead Estate Funds?
To understand why the trial court got reversed, we first have to look at what interpleader actually requires — because it is a lower bar than most people assume.
Interpleader is the escape hatch for someone holding money that might belong to more than one person. Under Texas Rule of Civil Procedure 43, a stakeholder facing conflicting claims deposits the money with the court, steps out, and lets the claimants fight over it. The point is to protect a party who has no stake in the outcome from paying the same fund twice.
At common law, the party seeking interpleader had to prove three things: that it was subject to, or had reasonable grounds to anticipate, rival claims to the same funds; that it did not unreasonably delay filing; and that it unconditionally tendered the funds into the court’s registry. Fort Worth Transportation Authority v. Rodriguez, 547 S.W.3d 830, 850 (Tex. 2018).
Rule 43 loosened that. As the Beaumont court put it in Clayton v. Mony Life Insurance Co. of America, 284 S.W.3d 398, 402 (Tex. App.—Beaumont 2009, no pet.), “Rule 43 expressly disclaims certain pre-rule restrictions imposed on interpleader practice. The Rule extended and liberalized the equitable remedy of interpleader. Interpleader under Rule 43 requires only conflicting claims.”
Delay and failure to tender still matter — but only to fees, not to the right to interplead. The Texas Supreme Court said as much in State Farm Life Insurance Co. v. Martinez, 216 S.W.3d 799, 807 (Tex. 2007): “while delay may bar recovery of attorney’s fees and incur the statutory penalties, only the absence of rival claims justifies continuing statutory penalties after interpleader occurs.”
So the whole case comes down to one element: did the bank reasonably anticipate rival claims? Two rules govern that question, and both cut in the stakeholder’s favor. First, courts look at the circumstances at the time the petition was filed. Fort Worth Transportation Authority, 547 S.W.3d at 850. Second, as the Texas Supreme Court held in Bryant v. United Shortline Inc. Assurance Services, 972 S.W.2d 26, 31 (Tex. 1998), “[e]very reasonable doubt should be resolved in favor of the stakeholder’s right to interplead.” Review is for abuse of discretion.
Put those together and you get a standard that is hard for a beneficiary to beat. The bank does not have to be right. It does not have to show that a rival claimant ever actually surfaced. It has to show that, on the day it filed, it had a reasonable basis to worry that one might.
Why Ronald’s Children Were the Whole Ballgame
The bank’s worry was not invented. It came straight out of the Texas anti-lapse statute, and it is worth walking through what those provisions actually say.
Start with the general rule. Texas Estates Code § 255.152(a) provides that, except as provided by Sections 255.153 and 255.154, “if a devise, other than a residuary devise, fails for any reason, the devise becomes a part of the residuary estate.” A gift to someone who dies before the testator fails. When it fails, it drops into the residuary and passes to whoever takes the residue — here, Karen.
But Section 255.153(a) carves out an exception, and it is the exception that made the bank nervous. If a devisee “who is a descendant of the testator or a descendant of a testator’s parent” dies before the testator, then “the descendants of the devisee who survived the testator by 120 hours take the devised property in place of the devisee.”
Read that phrase carefully — “a descendant of a testator’s parent.” That is the testator’s siblings, and their children and grandchildren. Ronald was Joel’s brother, so he was squarely inside it. That means Ronald’s $5,000 fell into the residuary and went to Karen only if Ronald left no descendants who outlived Joel by 120 hours. If Ronald had a child anywhere — one nobody in the family knew about, one from a relationship no one discussed — that child, not Karen, owned that $5,000.
This is the practical problem for a bank. Whether the money goes to the widow or to a stranger turns entirely on a negative fact — the nonexistence of a person — and a bank has no way to prove a negative about a man who died in 2013. It cannot search sealed records. It cannot run a paternity test. All it had was Karen’s word, and Karen was the person who stood to collect.
That is exactly what the indemnity agreement was for. It does not make the bank right about the law. It shifts the risk of Karen being wrong from the bank back onto Karen. When she declined to sign it, the bank was left holding a risk it had no way to price.
How the Court Analyzed It
The court framed the issue narrowly. Both sides agreed the fight was over one element — reasonable grounds to anticipate rival claims — and the bank bore the burden of proof on it. Olmos v. Pecan Grove Municipal Utility District, 857 S.W.2d 734, 741 (Tex. App.—Houston [14th Dist.] 1993, no writ). The court then did the only thing the timing rule allows: it looked at what the bank knew on August 17, 2023, and nothing after.
Three facts drove the result.
First, Karen’s information was contradictory. She initially confirmed all bequests were satisfied, including Ronald’s, and only later said Ronald had predeceased Joel. As the court put it, “Karen provided contradictory information when she initially confirmed that all bequests, including the bequest to Ronald, were satisfied, but later stated that Ronald predeceased Joel.”
Second, she had no documentation. No death certificate for Ronald, no estate records, nothing on descendants — just her own statements in an email chain.
Third, she refused to sign the indemnity agreement. The court noted that too: Karen “refused to execute a Distribution, Release, and Indemnity Agreement that Ronald died with no descendants.”
As for everything Karen later produced, the court set it aside on timing. Her affidavit was “executed after Bank of America filed its interpleader on August 17, 2023,” and the court said the same was true of the Denton and McAfee declarations. The ad litem admitted on cross-examination that she was not appointed until after the filing and did not start investigating until then. None of it could speak to what the bank reasonably believed on the day it filed. Applying Bryant‘s instruction to resolve every reasonable doubt in the stakeholder’s favor, the court held the bank reasonably anticipated rival claims and that denying interpleader was an abuse of discretion.
That holding then took down Karen’s declaratory judgment counterclaim. Her four requested declarations — that the gift to Ella May Townsend terminated, that Ronald’s gift fell into the residuary under §§ 255.152(a) and 255.153(a), that the residuary passed to Karen, and that the funds belonged to her — asked for a ruling on exactly what an interpleader decides. Interpleader runs in two stages: stage one decides whether interpleader is proper, stage two decides who gets the money. Clayton, 284 S.W.3d at 402. Karen’s counterclaim was stage two by another name.
Texas law does not allow that. Relying on Koch Oil Co. v. Wilber, 895 S.W.2d 854, 866 (Tex. App.—Beaumont 1995, writ denied), and John Chezik Buick v. Friendly Chevrolet, 749 S.W.2d 591, 594–95 (Tex. App.—Dallas 1988, writ denied), the court explained that a declaratory judgment is not available for issues already pending in a suit that present no new controversy. Because the bank’s interpleader had already put ownership at issue, Karen’s counterclaim was improper.
And when the counterclaim went, the fees went with it. Attorney’s fees under the Uniform Declaratory Judgments Act depend on having a proper UDJA claim. See Tex. Civ. Prac. & Rem. Code § 37.009. With the counterclaim improper, Karen was not entitled to the $6,867.50. The court reversed and remanded with instructions to grant the interpleader, order the funds into the registry, discharge the bank, and dismiss Karen’s counterclaim with prejudice.
The Takeaway
Karen was right on the merits. Ronald really did die without children. The ad litem confirmed it, two men who knew the family for 55 years confirmed it, and the money really was hers. She still lost — and lost her fee award on top of it.
The reason is that interpleader is judged as of the filing date. Proving later that the bank’s worry was unfounded does not make the worry unreasonable when the bank had it. If you are going to defeat an interpleader, you have to defeat it with what the stakeholder knew before it filed. Evidence you generate afterward is too late, no matter how conclusive.
So when a bank asks for an indemnity agreement, take the request seriously. You are allowed to refuse — but refusing is what handed this bank its reasonable-anticipation argument. A signed agreement would have moved $19,250.35 in a week. Refusing it produced three years of litigation over a fund that could not have covered the fees.
There is also a cheaper fix available on the front end. Much of this fight existed because a muniment of title order says a will was admitted — it does not adjudicate who takes what after a beneficiary predeceases the testator. If a will has specific bequests to people who died first, get the lapse and anti-lapse consequences declared in the probate proceeding itself, while you are already in front of the judge. An order that spells out that the gift lapsed and passed to the residuary is the document a bank can actually act on.
Last point, for anyone tempted to add a declaratory judgment counterclaim to an interpleader: if it asks the court to decide who owns the money, it is duplicative and it will not carry a fee award. The ownership question is already in the case.
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Our Corpus Christi Probate Attorneys provide a full range of probate services to our clients, including helping with banks that refuse to release estate funds, indemnity and distribution agreements, and lapsed bequests to beneficiaries who died before the testator. Affordable rates, fixed fees, and payment plans are available. We provide step-by-step instructions, guidance, checklists, and more for completing the probate process. We have years of combined experience that we can use to support and guide you with probate and estate matters. Call us today for a FREE attorney consultation.
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The content of this website is for informational purposes only and should not be construed as legal advice. The information presented may not apply to your situation and should not be acted upon without consulting a qualified probate attorney. We encourage you to seek the advice of a competent attorney with any legal questions you may have.
