Trust Intent

Chapman Children’s Trust v. Porter & Hedges, 32 S.W.3d 429 (Tex. App.—Houston [14th Dist.] 2000, pet. denied).

Claimant asserted that a law firm became the trustee of a trust when it received the proceeds of a settlement of a lawsuit. Both the trial and appellate courts held that a trust was not created because there was no language in the settlement agreement reflecting an intent to create a trust. The duties among the parties were contractually based. A court will not impose a trust where the parties contemplated another relationship.

Moral: Courts are unwilling to impose trust duties in a situation where the parties intended another type of legal relationship.