Ochse v. Ochse, No. 04-20-00035-CV, 2020 WL 6749044 (Tex. App.—San Antonio Nov. 18, 2020, no pet. h.).


Interpretation and Construction

The settlor named her son’s “spouse” as a beneficiary of an irrevocable trust. A dispute arose whether the son’s first wife, his spouse at the time the settlor created the trust, or his current wife is the actual beneficiary. The trial court granted summary judgment that the son’s ex-spouse was the beneficiary because the settlor intended to benefit her daughter-in-law at the time of trust creation.

The appellate court affirmed. The court held that the trust designation of the settlor’s spouse was unambiguous. Her son had been married to his first wife for approximately 30 years at the time of trust creation. The court rejected the claim that the settlor used the term “spouse” to refer to the status of being son’s wife and instead was used to refer specifically to the son’s spouse at the time of trust creation.

The court, however, did not hold that ex-wife had a vested interest in the trust by being the son’s spouse at the time of trust creation. The court claimed that the irrevocability of the trust did not make her interest vested. [Personally, I think her interest was vested – she was born, ascertainable, and there were no conditions precedent on her interest which would make her interest contingent.]

Moral:  The settlor should designate a beneficiary by actual name, not just by relationship, because the relationship may change over time.