Bradley v. Shaffer, 535 S.W.3d 242 (Tex. App.—Eastland 2017, no pet.).
A trust beneficiary attempted to convey his
interest in a trust contrary to a spendthrift provision which precluded
beneficiaries from assigning their trust interests. The trial court
granted the trustees’ request for a summary judgment declaring the deeds
to be ineffective. The grantee of the deeds appealed.
The appellate court affirmed. The court focused on
the spendthrift provision applicable at the time the trust beneficiary
attempted to convey his trust interest. The clause clearly precluded the
beneficiary from transferring the interest and the court explained the
assignment was invalid at the time it occurred.
The court next had to determine whether the invalid
conveyance could become valid at a later time. First, the court rejected
a claim that the trust violated the Rule Against Perpetuities because if
permitted an extension of the trust’s duration beyond a life in being
plus twenty-one years. The court explained that the duration of a trust
is irrelevant to a RAP analysis. Instead, the key determination is
whether the interest vests within the RAP period. The court studied the
trust and determined that vesting occurred immediately upon creation of
the trust – not one second of the RAP period was “used.”
In addition, the court rejected the argument that
the after-acquired title doctrine could fix the conveyance because the
grantor later acquired title to the conveyed property free of trust.
Because the initial attempt transfer was void, it could not be cured by
the grantor later acquiring the title which he attempted to transfer.
Moral: A conveyance of property ineffective
because of a spendthrift provision cannot be cured by the beneficiary
later acquiring that property free of trust.