Gause v. Gause, 496 S.W.3d 913 (Tex. App.—Austin 2016, no pet.).


Lost Trust Instrument


Settlor created an inter vivos trust in the 1940’s but the trust instrument disappeared shortly after Settlor’s death in 1998. Settlor’s wife, a primary beneficiary of the trust, claimed that a non-beneficiary child intentionally destroyed or lost the trust instrument. In 2000, this non-beneficiary child convinced her mother (Settlor’s wife) who was then in poor health to convey the trust property to her for a nominal consideration. A few months later, Settlor’s wife successfully sued her daughter to cancel the deed. Then, in 2002, Settlor’s wife conveyed all of the trust property to another of the non-beneficiary children. In 2007, one of the beneficiary children successfully sued to set aside this conveyance and Settlor’s wife appealed.


The appellate court affirmed rejecting Settlor’s wife’s claim that the trial court erred in determining the existence and terms of the trust based on parol evidence. The court explained that a trust instrument is not rendered ineffectively merely because it is lost or destroyed if there is sufficient evidence to prove its contents. In this case, Settlor’s wife swore to the terms of the trust when she successfully set aside her 2000 deed. The court also determined that Trust Code § 112.004’s statute of frauds requirement of a written and signed document “does not remove trust instruments from the operation of general rules relating to the proof of lost documents.” Gause at 917. In addition, the court explained that judicial estoppel prevents Settlor’s wife from now claiming she had no memory of trust when she earlier gave detailed sworn testimony about the trust and its contents.


Moral:  The existence and terms of a trust may be proven with competent evidence when the original has been lost or destroyed.