Pickelner v. Adler, 229 S.W.3d 516 (Tex. App.—Houston [1st Dist.] 2007, pet. denied).
Testatrix’s will provided that the residuary of her estate passed to
Beneficiary (the attorney who drafted the will) “to be distributed in
accordance with the specific instructions I have provided him.”
Testatrix provided these instructions verbally to Beneficiary and they
were also found in her handwriting on the back of an envelope. The trial
court held that it could not give effect to these oral instructions and
that the residuary gift was void. (No argument was made that the
handwritten note was sufficient to be a codicil to her will.) The court
explained that the handwritten note was not in existence at the time
Testatrix signed her will and thus the note could not have been
incorporated by reference into her will. The court also noted that it is
against public policy for an attorney to draft a will for an unrelated
person and to name himself as a beneficiary of that will. (This will was
prepared before the effective date of Probate Code § 58b which
automatically voids such gifts.) The court held that Testatrix lacked
trust intent and that consequently this property passed to Testatrix’s
heirs by intestate succession. Intended Recipient under her oral
instructions appealed.
The appellate court affirmed the result. The court engaged in an
extensive discussion of the types of trusts recognized by Texas law,
express, resulting, and constructive, as well as the concepts of the
“secret trust” and the “semi-secret trust.” Unlike the trial court, the
appellate court held that it was clear that Testatrix intended to create
a trust and that Beneficiary was to receive only legal title to
property. Because the trust lacked essential terms (the names of the
beneficiaries), it was a semi-secret trust, that is, a resulting trust,
so Beneficiary holds the property for Testatrix’s successors in interest
(her heirs).
Moral: Trust terms should be clearly stated in the trust, be it inter
vivos or testamentary. It is not prudent to rely on oral instructions.
The appellate court agreed with the trial court that an alleged
family settlement agreement was not enforceable because all of the heirs
and beneficiaries did not sign the agreement and it would have
distributed assets contrary to the rights of individuals who did not
sign the agreement.
Moral: All heirs and beneficiaries need to sign a family settlement
agreement before it will be effective.