Trust Interpretation Up for Debate in Recent Texas Court of Appeals Case

Recently, a court of appeals in Texas had to decide an important case regarding the interpretation of a decedent’s trust, which had implications for several family members who stood to benefit from the sale of a property specified in the trust. The trust in question was created by a man who intended to leave his property to his brothers, his sisters, and their children after his death. Fifty years after he died, however, the man’s nieces and nephews had questions about how the trust should be interpreted.

Facts of the Case

The decedent in this case passed away in 1964; according to his will, his property was put into a trust for the benefit of his siblings, nieces, and nephews. Per the terms of the trust, the properties would bring in income, and that income would be distributed to the siblings, nieces, and nephews as time went on. Twenty-one years after the death of the last niece or nephew alive at the man’s death, the trust would terminate.

In 2020, the trustee initiated this litigation, asking the court to determine whether one of the pieces of property could be sold. The court’s ruling would be important, said the trustee, because it would affect how income would be distributed to the nieces and nephews, as well as how much income they would receive. One of the nephews became involved in the litigation, arguing the property could not be sold and had to stay as it was.

The Decision

The court read carefully through the decedent’s will to figure out if he had stipulated to the sale of his property. Ultimately, the court found a provision that said the trustees could “dispose” of the property if they felt it was necessary, which the court ultimately interpreted to mean it could be sold.

The nephew in this case was unhappy with this decision, as he preferred that the land stay in the trust, producing income for him and the other beneficiaries. However, given that the terms of the will were up for interpretation, it was the court’s decision what to do with the land in question.

Do You Have an Estate Planning Lawyer in Texas?

In the state of Texas, estate planning can be a complex process. Many of our clients at McCulloch & Miller, PLLC, explore the option of putting property into a trust, so that it can benefit their loved ones long after they are gone. This move requires an extremely detail-oriented process of collecting information, drafting documents, and taking steps to ensure that the documents can eventually be executed by whoever is in charge of the estate’s administration.

At McCulloch & Miller, we have over 35 years of experience offering comprehensive and dependable advice for our clients. Our services target estate planning, elder law, and long-term care planning concerns for aging adults, but it is never too early to begin the process of estate planning, no matter your age. If you would like to consult with a member of our legal team, give us a call today at 713-903-7879.

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