Settlors often place some or all of the ownership in a closely-held business in a trust. A trustee managing a trust with an interest in a closely held business has difficult management issues to address and this often raises disputes. This presentation will address: (1) considerations in placing closely-held business interests in trusts, (2) considerations that a trustee should undertake in managing a closely-held business interest, (3) managing an ownership interest versus being a controlling person in the entity and the risks associated with holding both roles, (4) best practices for addressing conflicts of interest and for avoiding breaches of fiduciary duties, (5) attorney-client communication and privilege issues, (6) disclosure obligations to beneficiaries, (6) directed trust issues, and (7) co-trustee issues.

Date: Tuesday, September 27, 2022
Time: 10:00 – 11:00 a.m. Central Time
Cost: Complimentary
Speaker: David F. Johnson

Continuing Education Credit Information:
This course has been approved by the State Bar of Texas Committee on MCLE in the amount of 1 credit hour. This course has also been approved for 1.25 CTFA credit by the American Bankers Association, attendees can self report.

Who should attend:
In-house counsel and other litigation contacts, trust officers, risk management contacts, and wealth advisors

Register for the webinar.

In Marshall v. Estate of Freeman, a trial court’s order admitting a will as a muniment of title forty-one years after the testator’s death was reversed. No. 03-20-00449-CV, 2022 Tex. App. LEXIS 2857 (Tex. App.—Austin April 29, 2022, no pet. history). Continue Reading Court Reversed Order Admitting A Will To Probate As A Muniment Of Title Due To The Statute Of Limitations

In Prather v. Callon Petroleum Operating Co., the court of appeals resolved a will construction issue that determined who owned certain mineral interests. No. 11-20-00189-CV, 2022 Tex. App. LEXIS 3200 (Tex. App.—Eastland May 12, 2022, no pet.). The decedent left all of her property equally to her two daughters and then stated: “In the event that one of the beneficiaries in this paragraph is not living at the time of my death, then his or her share shall go to the survivor(s) thereof.” One daughter predeceased the decedent. That daughter’s children believed that they owned half of the decedent’s minerals upon her passing, and signed mineral leases. The other daughter’s children thought that they owned all of the minerals as their mother had survived the decedent. Thereafter, various parties asserted claims regarding these minerals and the interpretation of the will. Continue Reading Court Construed A Will To Provide That Mineral Interests Were Devised To The Surviving Daughter’s Family And To Cut Out A Predeceased Daughter’s Family

In Power v. Power, one brother sued the other brother for breach of fiduciary duty related to their partnership in real estate investing. No. 05-19-01557-CV, 2022 Tex. App. LEXIS 2926 (Tex. App.—Dallas May 3, 2022, no pet. history). The trial court found for the plaintiff, and the defendant appealed. Continue Reading Partner Had Capacity To Sue Other Partner For Breach Of Fiduciary Duty

In Ahmed v. Bank of Whittier, a party sued a bank for aiding and abetting breach of fiduciary duty by assisting the plaintiff’s attorney in improperly depositing settlement funds. No. 05-21-00058-CV, 2022 Tex. App. LEXIS 2987 (Tex. App.—Dallas May 4, 2022, no pet. history). The trial court granted summary judgment for the defendant, and the plaintiff appealed. The court of appeals first implied that there was no aiding and abetting breach of fiduciary duty claim under Texas law citing to an earlier opinion: Hill v. Keliher, No. 05-20-00644-CV, 2022 Tex. App. LEXIS 502, 2022 WL 213978, at *10 (Tex. App.—Dallas Jan. 25, 2022, pet. filed). Continue Reading Court Affirmed Summary Judgment For Bank On Non-Customer’s Aiding And Abetting Breach Of Fiduciary Duty Claim

In In re Poe Trust, there were three co-trustees of a trust, and the trust required them to act jointly. No. 20-0179, 2022 Tex. LEXIS 548 (Tex. June 17, 2022). One of those trustees (Dick) effectively acted as a sole trustee during his life. After Dick died, his executors and one of the other trustees (Richard) became embroiled in litigation. Continue Reading Texas Supreme Court Holds That Parties May Not Be Entitled To Jury Trials For Trust Modification Proceedings And Remands For Constitutional Review

In In re Estate of Poe, shortly before his death, Dick, who was the sole director of Poe Management, Inc. (PMI), authorized the corporation to issue new shares that he bought for $3.2 million. No. 20-0178, 2022 Tex. LEXIS 544 (Tex. June 17, 2022). This made Dick the majority owner of PMI, which was the general partner of several Poe-owned businesses. As a result of the purchase, Dick’s death vested control of the family enterprise in the two co-executors of Dick’s estate rather than Dick’s son, Richard, who was PMI’s only other shareholder. Continue Reading Texas Supreme Court Holds That A Director Of A Corporation Cannot Hold An Informal Fiduciary Duty To A Stockowner

David F. Johnson had his article entitled “Trustee Quandary: Criminal Activity By A Beneficiary With Or On Trust Property,” published in the Texas Tech Estate Planning and Community Property Law Journal in the spring of 2022. Continue Reading Trustee Quandary: Criminal Activity By A Beneficiary With Or On Trust Property

In Dillon v. King, one sister contested their father’s will and codicil and also asserted other claims against her sister. No. 05-20-00215-CV, 2022 Tex. App. LEXIS 2991 (Tex. App.—Dallas May 4, 2022, no pet. history). In 2010, the father executed a will leaving everything equally to his two daughters. Thereafter, he moved to Texas to be near the contestant. The contestant then accessed the father’s bank account. The father told Texas Adult Protective Services that he allowed her to use the account but that she no longer had access to it. Later, the father signed a new codicil, leaving everything to the applicant. After a bench trial, the trial judge admitted the will and codicil to probate and ordered the contestant to take nothing on her other claims. On appeal, the appellate court discussed many different issues. Continue Reading Court Affirmed Admitting A Codicil To Probate As The Testator Had Mental Capacity And Was Not Unduly Influenced And Discussed Expert Testimony Issues