Eckels v. Davis, 111 S.W.3d 687 (Tex. App.—Fort Worth 2003, pet. denied).
Settlor established an inter vivos trust identifying two accounts at
a financial management company by account numbers as trust property. For
internal bookkeeping reasons, the company renumbered one of the
accounts. When the trust terminated, the remainder beneficiaries
asserted that they were entitled to the funds from the renumbered
account. However, the beneficiaries of Settlor’s will claimed that they
were entitled to the funds because the renumbered account was not
covered by the trust. The trial court held that the renumbered account
passed under the terms of the trust.
The appellate court affirmed. The renumbering of the account created a
latent ambiguity, that is, an ambiguity which is not apparent from the
face of the trust but which arises when the trustee attempts to carry
out the terms of the trust. Extrinsic evidence is admissible to resolve
a latent ambiguity. The evidence was clear that the change in the
account number was the unilateral act of the company and thus did not
reflect any change in Settlor’s intent to have this account pass under
the terms of the trust.
Moral: Wills and trusts need to be periodically reviewed and updated to
eliminate ambiguities.