In In re Poe Trust, a co-trustee of a trust filed suit to modify the trust to change distribution provisions, increase the number of trustees, and change the method for trustees to vote on issues as well as other modifications. No. 08-18-00074-CV, 2023 Tex. App. LEXIS 5598 (Tex. App.—El Paso July 28, 2023, pet. filed). The trial court denied the defendant co-trustee’s request for a jury trial on underlying fact issues and held a two-day bench trial. After the trial court granted the plaintiff’s modifications, the defendant co-trustee appealed.

The court of appeals determined that the trial court did not abuse its discretion in reviewing extrinsic evidence and in modifying the trust. The court held that the trial court could rely on extrinsic evidence to determine whether the modification predicates existed, i.e., whether the purposes of the trust had become impossible to fulfill and whether, because of changed circumstances not known or anticipated by the settlor, a modification would further the purposes of the trust.

The co-trustee contends the trial court was not permitted to rely on extrinsic evidence in determining the manner in which to modify the trust—at least to the extent the evidence contradicted or varied the express and unambiguous terms of the trust itself. The co-trustee argued that, in construing trust terms, a trial court is generally confined to ascertaining the meaning of the terms and the settlor’s intent by reviewing the four corners of the document itself without resorting to extrinsic evidence. The other co-trustee argued that when a trustee or beneficiary seeks to modify trust terms under Section 112.054 due to changed circumstances, by the very nature of the proceeding, the court must consider evidence to not only establish whether changed circumstances exist but what modifications would most clearly conform with the settlor’s “probable intention” and further the purposes of the trust. The court held: “Richard has not convinced us that the trial court erred in considering extrinsic evidence to determine how to modify the trust.” Id.

“The trial court added four new provisions to the Trust allowing the trustees to take into account several factors in making distributions: (1) authorizing payment of travel expenses for Troy and any needed assistants and travel companions; (2) making distributions that take into account the standard of living Troy enjoyed at the time of Dick’s death; (3) recognizing that there will be an indirect benefit to Troy’s caregivers and other family members in making distributions for Troy’s benefit; and (4) giving primary consideration to Troy’s needs without considering the interests of any vested or contingent remainder beneficiaries.” Id. The court affirmed, concluding that “the record clearly supports a finding that Dick was fully aware that those who socialized with and traveled with Troy were receiving both a direct and indirect benefit from the various expenditures, and approved of such as it furthered Dick’s goal of providing Troy with the best life possible given his limitations.” Id. The court also noted that after the settlor’s death, the co-trustees were embroiled in disputes regarding the caregiver’s reimbursement requests and whether to approve disbursements to ensure Troy maintained the same standard of living he had prior to his father’s death, and these disputes were interfering with trust administration that had a negative impact on Troy’s well-being.

The trust provided that the settlor, his son Richard, and Bock would be co-trustees, that they would make decisions jointly, and that there was no provision to add any additional trustee upon the settlor’s death. The trial court modified the trust to add an additional trustee, allowed majority rule, and allowed Bock to appoint successor trustees. “Given the evidence of gridlock and delays, however, the trial court could have reasonably found that the unanimity provision was interfering with and would continue to interfere with the ability to accomplish the Trust’s purposes. Based on the evidence, the trial court could have reasonably concluded that appointing a third trustee who was aware of and sensitive to Troy’s needs was an appropriate way to modify the Trust to allow it to continue serving its purpose in accordance with Dick’s probable intent.” Id. The court of appeals affirmed the trial court’s modification.

There was a dissenting justice, who stated:

Although § 112.054 of the Property Code empowers a trial court to order a modification, the court must still conform as nearly as possible to the probable intention of the settlor when doing so. See Tex. Prop. Code Ann. § 112.054(b). Here, as settlor of the Trust, Dick plainly stated he wanted trustees to make decisions “jointly,” not by majority vote. Moreover, Dick further stated that any trustee has the right to serve without appointment of a successor if, for any reason, any of the trustees either fails or ceases to act as a trustee. If the last trustee fails or ceases to act, he stated he wanted a corporate successor trustee appointed as sole Trustee. Because the trial court contravened Dick’s intent as was expressed in these terms, I would conclude it abused its discretion.


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Photo of David Fowler Johnson David Fowler Johnson

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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