In re Willa Peters Hubberd Testamentary Trust, 432 S.W.3d 358 (Tex. App.San Antonio 2014, no pet.).

Trusts

Jurisdiction

 

Father established a testamentary trust for Daughter.  After a dispute arose regarding the depreciation allowance applicable to distributions from mineral income, all the parties and their attorneys signed a mediated settlement agreement modifying the terms of the trust.  After the probate court issued orders in compliance with the settlement agreement, Daughter appealed.

 

Daughter claimed that the probate court lacked jurisdiction to order the modification because the mediator (rather than a trustee or a beneficiary) filed the petition.  Daughter pointed to Property Code § 112.054 which limits the persons who may request deviation to trustees and beneficiaries.  The appellate court rejected Daughter’s contention explaining that the mediator, a lawyer, was acting as an agent for the beneficiaries and thus had authority to file the petition.

 

Moral:  A person acting as an authorized representative of a beneficiary has standing to file petitions on behalf of the beneficiary.

 

Trusts

Deviation

 

Father established a testamentary trust for Daughter.  After a dispute arose regarding the depreciation allowance applicable to distributions from mineral income, all the parties and their attorneys signed a mediated settlement agreement modifying the terms of the trust.  After the probate court issued orders in compliance with the settlement agreement, Daughter appealed.

 

Daughter claimed that the probate court erred in ordering the modifications under Property Code § 112.054 because the order was inconsistent with the material purposes of the trust, she did not agree to them, they did not conform with Father’s intentions, and one of the modifications was not contained in the agreement.  The court carefully reviewed the trust and the modifications and decided that the probate court abused its discretion in ordering some, but not all, of the modifications.  The court explained that the parties could not agree to modifications that are inconsistent with a material purpose of the trust because the statute does not authorize these deviations.

 

Moral:  The court will not authorize a deviation from the terms of a trust that is not clearly authorized by Property Code § 112.054 even if the beneficiaries agree to the change.

 



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