In In the Interest of Riley Family Revocable Trust, a trustee filed suit for a declaration regarding who takes in the distribution of remaining trust property. No. 13-20-00084-CV 2021 Tex. App. LEXIS 5839 (Tex. App.—Corpus Christi July 22, 2021, no pet. history). In article two, section 2.01, the Trust states:

Upon the death of both Trustors, the primary residuary beneficiaries of this Trust are the children of the Trustors, BARBARA JEAN RILEY JONES, BRENDA JUNE RILEY BRAGG, STEPHEN MARCUS RILEY, and ELAINE RILEY, and their descendants… For purposes of this Trust Agreement, the terms “issue” or “descendant” shall not include any child adopted by a grandchild of the Trustors.

Id. Section 6.01(A) states, in relevant part, that “household furnishings and personal effects” shall be distributed “to the surviving children and grandchildren of the Trustors…” Id. Section 6.01(B) states in its entirety: “The Trustee shall distribute the remaining Trust Property, in equal shares, to the children and grandchildren of the Trustors who survive both Trustors.” Id.

Section 9.01 defines “descendants” as “the natural born children of the person designated and the issue of such children, but shall not include any persons adopted by the issue of such children” and beneficiary “means a person to whom assets are or may be currently distributed.” Id. Per section 9.01(I), “property distributed ‘per stirpes’ to the descendants of an individual shall be divided into as many equal shares as there are children of the individual either then living or then deceased leaving one or more descendants then surviving; each surviving child (if any) shall take one share and the share for a deceased child shall be divided among his or her descendants in the same manner.” Id.

The trial court found that the beneficiaries were entitled to per stirpes distributions. The court of appeals disagree, holding:

The parties do not dispute that the Trust imposes a condition of survivorship. They do, however, interpret the condition differently. Appellants suggest that only the children and grandchildren who survived both Trustors take, in equal shares. On the other hand, appellees contend the trial court did not err in determining that all surviving descendants of Trustors take, per stirpes. We note, however, that appellees’ interpretation of the trial court’s order to include those descendants who survived Trustors, is an inaccurate interpretation as not all descendants were apportioned a share. Rather the trial court’s order divided the Trust into four equal portions: one for each child of the Trustors; and because Brenda did not survive both Trustors, the trial court divided her 1/4 share amongst her six children, one of whom was deceased and his share was given to his daughter, Brenda’s grandchild. Accordingly, the trial court’s order did not divide the Trust amongst all the Trustors’ descendants “in equal shares,” as implied by appellees.

Appellees argue that we must find that section 6.01(b) of the Trust affirms, rather than contradicts, section 2.01, however “we must give effect to, and harmonize, all the language, even if the second and third clauses might initially appear inconsistent or contradictory to the entire first clause.” Having read the entire Trust and examined the relevant clauses and definitions, we also consider the document’s structure for indications of intent. While section 2.01 is the “identification of beneficiaries,” we note that article six states specifically that it “shall control the disposition of all property of the Trustor’s upon the death of the surviving Trustor.” Article six does not conflict with the identification of beneficiaries, but rather it serves to clarify who takes and in what amount. Accordingly, to give full effect to section 2.01, we read it to identify who the beneficiaries of the Trust are and note that per the definition, beneficiaries “may” be entitled to take in distribution of the Trust. We construe section 6.01 as controlling the distribution of the Trust, distributing in “equal shares” to the “children and grandchildren of the Trustors who survive both Trustors.”

Id. Therefore, the court of appeals held that the trial court erred when it distributed the property per stirpes as the Trust does not indicate any intent to distribute the property per stirpes, but rather clearly indicates it shall be distributed in equal shares.

Email this postTweet this postLike this postShare this post on LinkedIn
Photo of David Fowler Johnson David Fowler Johnson

[email protected]

David maintains an active trial and appellate practice and has consistently worked on financial institution litigation matters throughout his career. David is the primary author of the The Fiduciary Litigator blog, which reports on legal cases and issues impacting the fiduciary…

[email protected]

David maintains an active trial and appellate practice and has consistently worked on financial institution litigation matters throughout his career. David is the primary author of the The Fiduciary Litigator blog, which reports on legal cases and issues impacting the fiduciary field in Texas. Read More

David’s financial institution experience includes (but is not limited to): breach of contract, foreclosure litigation, lender liability, receivership and injunction remedies upon default, non-recourse and other real estate lending, class action, RICO actions, usury, various tort causes of action, breach of fiduciary duty claims, and preference and other related claims raised by receivers.

David also has experience in estate and trust disputes including will contests, mental competency issues, undue influence, trust modification/clarification, breach of fiduciary duty and related claims, and accountings. David’s recent trial experience includes:

  • Representing a bank in federal class action suit where trust beneficiaries challenged whether the bank was the authorized trustee of over 220 trusts;
  • Representing a bank in state court regarding claims that it mismanaged oil and gas assets;
  • Representing a bank who filed suit in probate court to modify three trusts to remove a charitable beneficiary that had substantially changed operations;
  • Represented an individual executor of an estate against claims raised by a beneficiary for breach of fiduciary duty and an accounting; and
  • Represented an individual trustee against claims raised by a beneficiary for breach of fiduciary duty, mental competence of the settlor, and undue influence.

David is one of twenty attorneys in the state (of the 84,000 licensed) that has the triple Board Certification in Civil Trial Law, Civil Appellate and Personal Injury Trial Law by the Texas Board of Legal Specialization.

Additionally, David is a member of the Civil Trial Law Commission of the Texas Board of Legal Specialization. This commission writes and grades the exam for new applicants for civil trial law certification.

David maintains an active appellate practice, which includes:

  • Appeals from final judgments after pre-trial orders such as summary judgments or after jury trials;
  • Interlocutory appeals dealing with temporary injunctions, arbitration, special appearances, sealing the record, and receiverships;
  • Original proceedings such as seeking and defending against mandamus relief; and
  • Seeking emergency relief staying trial court’s orders pending appeal or mandamus.

For example, David was the lead appellate lawyer in the Texas Supreme Court in In re Weekley Homes, LP, 295 S.W.3d 309 (Tex. 2009). The Court issued a ground-breaking opinion in favor of David’s client regarding the standards that a trial court should follow in ordering the production of computers in discovery.

David previously taught Appellate Advocacy at Texas Wesleyan University School of Law located in Fort Worth. David is licensed and has practiced in the U.S. Supreme Court; the Fifth, Seventh, and Eleventh Federal Circuits; the Federal District Courts for the Northern, Eastern, and Western Districts of Texas; the Texas Supreme Court and various Texas intermediate appellate courts. David also served as an adjunct professor at Baylor University Law School, where he taught products liability and portions of health law. He has authored many legal articles and spoken at numerous legal education courses on both trial and appellate issues. His articles have been cited as authority by the Texas Supreme Court (twice) and the Texas Courts of Appeals located in Waco, Texarkana, Beaumont, Tyler and Houston (Fourteenth District), and a federal district court in Pennsylvania. David’s articles also have been cited by McDonald and Carlson in their Texas Civil Practice treatise, William v. Dorsaneo in the Texas Litigation Guide, and various authors in the Baylor Law ReviewSt. Mary’s Law JournalSouth Texas Law Review and Tennessee Law Review.

Representative Experience

  • Civil Litigation and Appellate Law