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Texas Tech Univ. School of Law

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Monday, January 12, 2009

How to sue a trust

Texas_9 In the case of In re Ashton, 266 S.W.3d 602 (Tex. App.—Dallas 2008, no pet. h.), the trial court awarded relief against a trust.  The appellate court granted mandamus relief because neither the trust nor the trustee had been made a party to the action.  A suit against a trust must be brought against the trustee, that is, the legal representative of the trust.  Accordingly, for a judgment to be rendered against a trust, “its trustee must be properly before the trial court as a result of service, acceptance, or waiver of process, or an appearance.  * * *  Stated differently, for relief to be granted against a trust, the trust—through its trustee—must be made a party to the action.”  Id. at 604.  The fact that the trustee in his individual capacity was party to the lawsuit did not cure the defect.

Moral:  When seeking relief against a trust, be certain to join the trustee in its representative capacity as a party to the action.

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Comments

There are lots of trusts with different names but in reality only 4 types.

If a trust is irrevocable, non-grantor, complex, and discretionary the
trustee has all "legal control" of the corpus (assets) for fiduciary purposes but no "equity ownership" whatsoever of the assets of the trust.
It is the 'equity' that plaintiff party's want to get at and only the 'Beneficiaries' have ownership of the equity, but they have NO control whatsoever over the assets or (corpus) of the trust therefore are immune from any action taken against the trust itself, as is the trustee.

You can "sue any one or thing for any reason, frivolous or not, if you have the filing fees and serve a complaint. Getting a judgement favorable to Plaintiff and getting paid on same judgement are two completely different processes. You can spend a fortune on attorneys fees and wind up never recovering the expense let alone a 'damages award'

In other words...."Good Luck" on suing a properly constructed Trust.
And the attorney favorite,s ("Family Living Revocable" Trusts), are not it. The Attorneys that build them mostly wind up probating them and take all the fees from the deceased's estate. It's legal theft by court order. Beware.

Posted by: Wynn | Mar 23, 2012 4:58:07 PM

My husband is an only child and his mother put $500k in a trust until he is 65 years old. He was give the first opportunity to purchase the house as long as he did not take a mortgage out to pay for even part of it. It seems ridiculous that he may never get this money and this "trustee" retains control. She even told my husband that she will spend every dime of it to make sure he does not get it. This trustee was a "family friend" who talked his mother into this after his farther died. We can't afford an attorney (yet) but I thought I would add this comment after running into this blog. Thanks.

Posted by: Patty Palmer-Young | Nov 25, 2012 6:31:22 PM

Can a trustee sue in the name of the 'corpus' of the trust( ie, securities named), not naming the trust itself? Please help, as we cannot find any case law of discussion on this twist? We believe it's a lack of standing issue, so that it can be attacked and the whole case falls.

Thanks, carol

Posted by: Carol forbes | Jan 25, 2013 12:00:09 PM

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