Austin Trust Company as Trustee of the Bob and Elizabeth Lanier Decendants[sic] Trusts v. Houren, No. 14-19-00387-CV, 2021 WL 970819 (Tex. App.—Houston [14th Dist.] Mar. 16, 2021, no pet. h.).

Trusts

Settlement Agreement

 

Wife established a marital trust for Husband. Husband’s will exercised a power of appointment Wife granted him in the trust to give all remaining assets to trusts in favor of their children. After Husband died, claims were made that Husband violated his fiduciary duties by distributing excessive funds ($37+ million) to himself. All parties signed a family settlement agreement resolving all issues. Nonetheless, the trustee of trusts to which Husband appointed the remainder of the trust property asserted that it was entitled to these funds. The trial court agreed with the executor of Husband’s estate that the settlement agreement barred the trustee’s claim. The trustee appealed.

 

The appellate court affirmed. The court analyzed the settlement agreement. First, the court recognized that because all parties agreed that the agreement was unambiguous, the court would construe it as a matter of law. The court then examined the language of the agreement concluding that it “specifically and unambiguously released” the trustee’s alleged claims. The court explained that its “decision adheres to the public policy in favor of Texas courts upholding contracts negotiated at arms-length by knowledgeable and sophisticated business players represented by highly competent and able legal counsel.”

 

Moral:  Before signing a settlement agreement, be sure you are in agreement with all of the terms. It is difficult to bring a claim when settlement remorse sets in.

 

 



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