Many families keep the same financial advisor for decades, even when that advisor changes firms three or four times. Mom’s investment account follows the advisor from one brokerage to the next, and nobody thinks twice about it. Then Mom dies, and her will leaves “my account at Firm X ending in 1234” to specific people. That account hasn’t existed for years.
It gets harder when the new account picked up a transfer-on-death (TOD) beneficiary along the way. Does the specific gift in the will follow the money to the new firm? Or does the TOD designation pull the account out of the will entirely?
In Friedman v. Murphrey, No. 09-25-00013-CV (Tex. App.—Beaumont July 16, 2026) (mem. op.), the Beaumont Court of Appeals had to decide whether a brokerage account worth more than $2 million passed under a specific gift in the will or fell into the residuary estate after the testator moved it to a new firm and set it up as a TOD account.
Facts & Procedural History
Lois Sherbert Shooter married John Josiah Shooter around 1990. Josiah had two children from before the marriage, Gail Friedman and John Jay Shooter. Lois had no children. Josiah put his investment account into joint tenancy with Lois, and when he died in 2014, the account became Lois’s sole property.
The account was managed by family. Gail’s husband, Steve Friedman, and their son, Jeremy Friedman, were financial advisors. When they moved from Wells Fargo to Raymond James in 2017, Lois moved the account to Raymond James too.
On November 7, 2018, Lois signed her will. Article II.B gave the Raymond James account to three people in equal shares: her stepdaughter Gail, her stepson John Jay, and her brother Bill Sherbert. If any of them died first, that person’s share went to his or her descendants. Article III gave the residue of the estate to Bill, or to Bill’s descendants if he didn’t survive her.
Article II.B had two important conditions built into it. It said:
“I give all of my interest in my Raymond James and Associates account ending in ****M386 in equal shares to GAIL ANN FRIEDMAN; JOHN JAY SHOOTER, and BILL R. SHERBERT, provided, however, no such gift shall be made if such account does not exist on the date of my death; provided, further, I understand that such account may pass outside the provisions of my Will if, for instance, I am holding such account as joint tenants with rights of survivorship with one or more other persons or if such account is payable on death to one or more named beneficiaries.”
In January 2022, Steve and Jeremy left Raymond James for Silverleaf Wealth Management, which uses LPL Financial as its custodian. Lois followed them. She opened a new account at LPL, and on February 10, 2022, she signed a “Transfer on Death Account Agreement — Non-Retirement” naming her brother Bill as the sole beneficiary. That same day she signed the paperwork to move everything from Raymond James to LPL “in kind.” The Raymond James account was closed. Every monthly statement after that said “Lois TOD” in the corner and “TOD ACCOUNT” in the address block.
Lois never changed her will. Later in 2022, Jeremy called her to ask whether she wanted to “add a TOD” to the account, apparently not knowing it already had one. According to Jeremy, she told him: “No. The Will will handle that.”
Then the family started dying in the wrong order. John Jay died in 2021. Bill died on April 19, 2023. Lois died on June 13, 2023, at 87. Her will was admitted to probate in Montgomery County, and one of Bill’s daughters, Adrienne Murphrey, was appointed independent executrix.
That set up the fight. If the LPL account passed under Article II.B, it would be split among Gail, John Jay’s children (Jesse Shooter and Rachel Tamura), and Bill’s descendants. If it passed under the residuary clause, it would go entirely to Bill’s daughters, Lois’s nieces. Gail, Jesse, and Rachel sued for a declaratory judgment that the specific gift controlled. They argued that moving the account was just an administrative change of brokerage and that the gift had not been “adeemed.” The executrix counterclaimed for a declaration that the account passed under the residuary clause.
After a bench trial, the probate court ruled for the executrix. The judge was blunt about the TOD paperwork: “Whether she understood the nature of this, whether she intended to have a TOD designation, whether she intended all those things seems to me to be immaterial when I have a contract that she signed where she designated someone.” The plaintiffs appealed.
How Specific Gifts and TOD Accounts Work in Texas
To understand this case, we first have to look at the two very different ways property can pass when someone dies: through the will, or outside of it.
A will can make a specific gift (a particular item, like the Raymond James account in Lois’s will) and a residuary gift (everything left over). A specific gift has a built-in risk. If the specific item is gone when the testator dies, the gift can fail. This is called ademption. The beneficiary doesn’t get a substitute. The gift just doesn’t happen, and whatever replaced the item passes with the rest of the estate.
A TOD account is a way around the will altogether. The account owner signs a contract with the financial institution naming who gets the account at death. Section 111.052 of the Texas Estates Code says this kind of provision in an account agreement, security, custodial agreement, or “account with a financial institution” is valid and is “considered nontestamentary.” In plain English, it isn’t part of the will. The account goes where the contract says, no matter what the will says.
Chapter 113 of the Estates Code covers these accounts specifically. It defines a “P.O.D. account” to include “an account designated as a transfer on death or T.O.D. account,” and it defines a financial institution to include a “brokerage firm that deals in the sale and purchase of stocks, bonds, and other types of securities.” Under Section 113.152, when the owner dies, the money in a P.O.D. account belongs to the P.O.D. payee “if surviving.” And Section 113.158 says these transfers “are not to be considered testamentary transfers or subject to the testamentary provisions of this title.”
Note the catch in Section 113.152: “if surviving.” A TOD designation only works if the beneficiary outlives the owner. If the only named beneficiary dies first and there’s no backup, the TOD has nothing to transfer, and the account falls back into the owner’s estate. Once it’s back in the estate, the will decides where it goes. That is exactly what happened to Lois’s LPL account. Bill died first, so the TOD failed and the account landed back in her estate.
So the real question was: once the LPL account was back in the estate, which clause of the will picked it up, the specific gift in Article II.B or the residuary clause in Article III?
How the Court Decided Who Got the Account
The trial court gave two separate reasons why the specific gift failed. First, the Raymond James account no longer existed when Lois died, and Article II.B said “no such gift shall be made if such account does not exist on the date of my death.” Second, even if the LPL account was really the same account as the old Raymond James account, Article II.B also said the account “may pass outside the provisions of my Will . . . if such account is payable on death to one or more named beneficiaries.” The LPL account was a TOD account with a named beneficiary. Under the will’s own terms, the specific gift didn’t reach it. When Bill died first, the account fell into the residue.
The appeal centered on the first reason. The plaintiffs argued that moving the account to a new firm didn’t destroy the gift and that the account did exist at Lois’s death, just under a new name. But they never directly attacked the second reason, the TOD finding.
That was fatal. When a judgment rests on two independent grounds and the appellant challenges only one, the appeals court has to accept the unchallenged ground and affirm. The Beaumont court agreed with the executrix that the TOD finding “would independently support the trial court’s judgment and Appellants failed to challenge it on appeal.” So the court never decided whether the account was adeemed. It said that even if the LPL account “was just a substitute for the Raymond James account, the trial court’s unchallenged findings regarding the LPL TOD account support the judgment.”
The court didn’t stop there. Even assuming the plaintiffs had challenged the TOD finding, the court held the evidence supported the judgment. The trial court found the will unambiguous and found that the LPL account was a TOD account. Under the plain language of Article II.B, the court explained, “the gift would not be made if the account did not exist or if such account is payable on death to one or more named beneficiaries.” Then it added: “Either finding would support the trial court’s Judgment.”
The plaintiffs relied on Eckels v. Davis, 111 S.W.3d 687 (Tex. App.—Fort Worth 2003, pet. denied). In Eckels, a trust referred to an account by its old number, and a financial management company changed the number for bookkeeping purposes, on its own, without the decedent knowing. The plaintiffs argued that, as in Eckels, Article II.B had a latent ambiguity, meaning language that looks clear on its face but becomes unclear when applied to the facts. That would have opened the door to outside evidence about what Lois really wanted.
The court rejected the comparison. In Eckels, the account number changed through someone else’s paperwork. Here, Lois moved the account herself, “set up a new and totally different type of an account which was a ‘TOD account,'” and “personally filled out the account forms and named her brother as the beneficiary on death.” She told LPL how she wanted the new account distributed. The court found no ambiguity in her will and affirmed.
That leaves the hard part of the case. There was real evidence that Lois didn’t understand what she signed. Steve testified he had no idea the account was a TOD until the lawsuit, and that an assistant prepared the paperwork, which Lois signed through DocuSign. And Lois told Jeremy “The Will will handle that.” None of it mattered. The will was unambiguous, the TOD contract was signed, and the court applied both as written.
The Takeaway
A beneficiary designation on an account can override your will, even when you don’t realize you signed one. Lois almost certainly thought her will controlled the account. The TOD form she signed when she followed her advisors to a new firm said otherwise, and when her brother died first, the money went to her nieces instead of being split three ways.
If your will gives away a specific account, every time that account moves, gets a new number, or gets a new beneficiary form, check whether your will still works. Better yet, don’t tie a gift to one account number. Draft the gift to cover any successor or replacement account, and make sure the beneficiary designation on file with the financial institution matches the plan. Name a backup beneficiary, too. A TOD designation with one beneficiary who dies first does nothing.
For anyone fighting over an estate, Friedman is also a reminder that on appeal you have to attack every independent ground for the judgment. The plaintiffs here put everything into ademption, and the court never reached that argument.
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