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Court Says Estates Court had jurisdiction over inter vivos trust disputes and beneficiary waived claim about disclaimer against trustee | PC Winstead


In Goepp v. Comerica Bank & Trust, NA, the settlers created inter vivos trusts and their three children were the other beneficiaries. N ° 03-19-00485-CV, 2021 Tex. App. LEXIS 5461 (Tex. App. — Austin July 9, 2021, no animal history). The three children became co-trustees and subsequently had disputes. They reached a family settlement agreement and had a successor trustee appointed. The Company Trustee then filed a “First Amended Petition for Settlement of Trustee’s Final Account and Exemption Order.” Username. One of the children objected “to the trustee’s request, complaining about the timing of certain preferential distribution payments, the calculation of interest on the distributions and the fact that he” has not yet been reimbursed. due to him for the personal expenses of durable medical equipment purchased on behalf of Iraida. ‘ ” Username. After the court of first instance ruled on the compensation sought by the trustee, several of the children appealed.

One child argued that the statutory estates court did not have jurisdiction over the inter vivos trust dispute. The Court of Appeal does not agree:

Although subsection 115.001 (a) of the Texas Property Code grants a district court “original and exclusive jurisdiction over all proceedings brought by or against a trustee and all proceedings relating to trusts”, this subsection is preceded by “[e]except as provided by subsection (d) of this section. Tex. Prop. Code § 115.001 (a). Paragraph (d) (1) states: “The jurisdiction of the district court is exclusive, except for the jurisdiction conferred by law on: (1) a statutory probate court[.]”And jurisdiction is conferred by law on a statutory estates court by section 32.006 of the Texas Estates Code:” In a county in which there is a statutory estates court, the statutory estates court has jurisdiction to ” both “an action brought by or against a trustee” and “an action involving an inter vivos trust, testamentary trust or charitable trust.” It is not disputed that the Goepp trusts are inter vivos trusts and that Comerica, as trustee, brought the underlying action in a Travis County statutory estates court. Thus, in light of Section 32.006 of the Texas Estates Code, Section 115.001 of the Texas Property Code did not not deprive the inheritance court of its jurisdiction over the underlying case.

Username. The court also rejected the child’s argument that the status of the place meant that the court of first instance did not have jurisdiction: “But”[v]Enue relates only to where an action can be brought and is a different matter than whether the court has “jurisdiction over the property or thing in dispute” and “contrary to jurisdiction over the matter. . . place may be canceled if not properly and timely contested. ” Username.

The court also dismissed the child’s complaint about the trust company “disclaimer” order because it was not preserved and was waived:

In her fifth and final issue, Heidi argues that the probate court is “abusing[ed] [its] discretion in issuing a “disclaimer” order. . . to extinguish [Heidi’s] breach of trust and breach of fiduciary duty claims. Heidi does not dispute the sufficiency of the evidence supporting the order; instead, she argues that the probate court “cannot decide that Comerica. . . has no responsibility or attempt to adjudicate on this claim, which would have an exclusive effect on other disputes elsewhere. Heidi’s argument is not entirely clear. To the extent that Heidi is challenging the order on the jurisdictional grounds raised in her first four questions, we have set aside those questions. And while Heidi raises a non-jurisdictional ground for challenging the issuance of the “non-liability” order, she did not preserve the error on this issue by filing this complaint with the probate court and getting a ruling on it. the complaint.


Interesting note: Trustees often sue and seek some form of discharge or exemption from liability. The Texas Trust Code provides that a court has jurisdiction to “determine the powers, responsibilities, duties and liability of a trustee” and also to “require accounting by a trustee, review the fees of the trustee and settle accounts. provisional or final ”. Prop code. tex 115.001 (a). The Texas Trust Code also authorizes the court to accept the resignation of a trustee and discharge him from the trust on terms and conditions necessary to protect the rights of other interested parties. Texas Trust Code 113.081 (b).

Because of this right, when a trustee resigns or some other material event occurs, it is standard practice to require beneficiaries to provide the trustee with a private discharge. If the beneficiary refuses, the trustee has the right to file an accountability statement and request a discharge, which would normally be paid by the trust. Thus, the beneficiary is encouraged to sign the private discharge to save on expenses. There is nothing particularly unfair about this when there is a trust company that has filed regular returns and the beneficiary has had the opportunity to file a complaint if they have one.

There is a difference between an accounting and discharge approval and a disclaimer. Obtaining the court’s approval of a final account alone is not, or should not be, a decision on beneficiary claims. State Bank of Texas v. Amaro, 87 SW 3d 538 (Tex. 2002). In Amaro, the Texas Supreme Court said:

[T]The Trust Code does not contemplate that an accountancy regulates the tort liability of the trustee. As noted, section 113.152 establishes the content of an accounting and requires the trustee to list the trust property, transactions, property, cash and all known debts owed by the trust. This simply does not affect the tort liability of the trustee. This conclusion is supported by the structure of the Trust Code, which includes subchapter E “Accounting by the Trustee” in Chapter 113, entitled “Administration”. In contrast, Chapter 114 deals with “the responsibilities, rights and remedies of trustees, beneficiaries and third parties”. Thus, the final accounts “constitute the basis for a liquidation of the trust to determine the balance owed to the beneficiary”. Supra, 74 SW3d at page 397. As TSB notes in its factum, “the relief requested by TSB essentially provided for the determination of the amounts that should be paid to Vargas by TSB and the termination of the trust and issues relating thereto ”. The determination of TSB’s tort liability is not necessary for the termination of the trust or the determination of the trust balance owed to the beneficiary and, as we have held above, was outside the scope of the repair requested by TSB. Therefore, because the approval of the accounting, including distributions, costs and expenses, was not a decision on TSB tort liability, Vargas was not entitled to a jury or notice of forty-five days for the hearing.

Username. See also Riley v. Alpert, N ° 01-11-00430-CV, 2012 App Tex. LEXIS 6049, 2012 WL 3042991 (Tex. App. July 26, 2012, no animals); Bank of Texas, NA Trustee v. Mexia, 135 SW3d 356, 362 (Tex. App. — Dallas 2004, pet refused) (approval of an accounting is an administrative function, not a tort decision of the trustee).

Thus, the trustee must plead for a discharge and a finding of not tort, and the court must hold an evidentiary hearing concerning the actions of the trustee. The trustee can do so under section 115.001 (a) and also through the Texas Uniform Declarative Judgment Act in Chapter 37 of the Texas Code of Civil Practice and Remedies. The case discussed above raises an important point, if a court grants a finding of disclaimer, and no one retains any error regarding that finding, then it will be res judicata and enforceable. Cable Walt Trust Co. Inc. vs. Palmer, 859 SW2d 475, 480-81 (Tex. App. — San Antonio 1993, brief refused).

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