April 22, 2009
In Alpert v. Riley, 274 S.W.3d 277 (Tex. App.—Houston [1st Dist.] 2008, pet. filed), A dispute arose as to whether a successor trustee was properly appointed under a trust provision allowing the current trustee to appoint a successor trustee or whether the default trustee provided for in the trust was the trustee. The appellate court examined the evidence and determined that fact questions existed and thus the trial court’s grant of a summary judgment was improper.
With regard to another trust in the same case, the court determined that the alleged successor trustee did not properly accept the position because the trustee did not execute “an acknowledged acceptance of the trusteeship” as required by the trust. Instead, the alleged successor trustee had only signed a letter which had not been notarized. Although this letter would be sufficient under Trust Code § 112.009(a), the trust itself prescribed a method and the settlor’s instructions prevail over the Trust Code’s default method under Trust Code § 111.0035(b) The court also rejected the alleged successor trustee’s claim that equitable theories such as estoppel or deviation would allow him to assume the trusteeship without compliance with the express language of the trust.
The court also held that trial court abused its power in appointing a successor trustee without first attempting to follow the trustee selection method Settlor detailed in the trust itself.
Moral: A trust provision providing a method for the appointment of a successor trustee needs to be clearly stated and then clearly followed.
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