Faulkner v. Bost, 137 S.W.3d 254 (Tex. App.—Tyler 2004, no pet.).
Mother created a trust naming Daughter as the trustee. Mother then
assigned to the trust any interest she might later acquire from her
mother (Grandmother). Grandmother later created her own trust which
would terminate at her death for the benefit of Mother and her siblings.
After Grandmother died, Mother reaffirmed the assignment. Daughter (as
trustee of Mother’s trust) sought an accounting from the trustee of
Grandmother’s trust.
The appellate court determined that Daughter had standing to bring the
accounting action as an interested person as defined by Prop. Code §
111.004(7). Although Daughter was not a named trustee or beneficiary of
Grandmother’s trust, she did have an interest by virtue of Mother’s
assignment. The court noted that the spendthrift provision in
Grandmother’s trust did not negate the assignment. The effectiveness of
the spendthrift provision ended when Grandmother died and Mother
reaffirmed the assignment after Grandmother’s death.
Moral: An individual may be deemed to be an interested person even
though the person is not a named beneficiary or trustee.