Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Sunday, January 10, 2021

Court Held That The Term “Spouse” In A Trust Meant The Primary Beneficiary’s Wife At The Time Of The Trust’s Execution And Not A Subsequent Wife

TrustIn Ochse v. Ochse, "a mother created a trust that provided that the trustee was authorized to make distributions to her son and the son’s spouse." 

When the trust was executed, the sone was married to his first wife. However, after the trust's execution, the son divorced and remarried. The son's children sued the son for breaching fiduciary duties as trustee. Both the son and his first wife filed motions for summary judgment. 

The son and the first wife were particularly focused on whether the term "spouse" in the trust agreement referenced the first wife or second wife.

The trial court found that "spouse" referenced the second wife, but the first wife appealed. The son and second wife argued that the term "spouse" referenced a class of the son's current wife at the time and not the first spouse specifically. 

The Court of Appeals disagreed finding that the term "spouse" should be construed to mean the spouse at the time of execution and not a future spouse.

See David Fowler Johnson, Court Held That The Term “Spouse” In A Trust Meant The Primary Beneficiary’s Wife At The Time Of The Trust’s Execution And Not A Subsequent Wife, Texas Fiduciary Litigator, January 3, 2021. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

https://lawprofessors.typepad.com/trusts_estates_prof/2021/01/court-held-that-the-term-spouse-in-a-trust-meant-the-primary-beneficiarys-wife-at-the-time-of-the-tr.html

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Comments

There is a puzzling footnote at the end of the opinion to the effect that the first spouse's rights as a trust beneficiary were not "vested." Not sure what this is supposed to imply on the separate trial of the breach of trust petition. The trustee (son of the settlor, former spouse of the petitioner) has discretion to distribute income and/or principal pursuant to an ascertainable standard. The former spouse may not have an enforceable right to compel distributions, but she does have standing to challenge excessive distributions by the son to himself.

GWB: 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.

Posted by: Russ Willis | Jan 13, 2021 5:28:40 PM

Agreed. I think the court is using "not vested" to mean she does not have an enforceable right to distributions.

Posted by: Russ Willis | Feb 26, 2021 2:04:52 PM

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