Nash v. Beckett, 365 S.W.3d 131 (Tex. App.—Texarkana 2012, pet. denied).



Distribution Provisions


Mother and Father created two trusts, one for each of their children.  Upon the death of the last child, the property was to be distributed to their descendants equally.  The trial court held that the remainder of each child’s trust passed only to that child’s descendants.  The appellate court reversed, holding that each descendant is entitled to an equal share of both trusts.


The court focused on the unambiguous language of the trusts which said that upon termination, the trust is to be “divided into as many equal shares as there are children of my two sons surviving, together with an equal share per stirpes for the surviving child or children of any deceased grandchild.”  The court found additional support for this argument in that the trusts did not terminate until the last child died.  If the balance of each trust would pass only to the descendants of the child for whom the trust was created, there would be no reason to delay distribution until the other child died.  Accordingly, the trusts terms cannot logically be read to give the balance of each trust only to the descendants of the child for whom that trust was originally created.  The court recognized the Rule Against Perpetuities savings clause would have yielded this result but this clause was not the cause of the trusts terminating.  Also, the fact that a child could exercise a power of appointment over trust property that would pass to his descendants did not mean that the entire trust corpus would pass only to his descendants.


Moral:  The provisions under dispute appear to have been expertly drafted.  Thus, the lesson is that no matter how well-drafted a provision may be, someone who is unhappy with the resulting disposition may assert that the provision does not mean what it clearly states.