February 24, 2021

Volume XI, Number 55

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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

In 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. No. 04-20-00035-CV, 2020 Tex. App. LEXIS 8922 (Tex. App.—San Antonio November 18, 2020, no pet. history). At the time of the trust’s execution, the son was married to his first wife, but he later divorced and married his second wife. The son’s children then sued the son for breaching fiduciary duties as trustee and joined their mother, the first wife, as a necessary party. The first wife and the son then filed competing summary judgment motions on whether the first wife or the second wife was the son’s “spouse” as referenced in the trust agreement. The trial court ruled the second wife was the correct beneficiary at the time of the suit, and the first wife appealed.

The second wife and the son argued that the use of the term “spouse” in the trust document did not mean the first spouse’s actual name, but that the term meant a class of whoever was currently married to the son. The court of appeals disagreed:

Cynthia responds that in the absence of an expression of contrary intent, a gift to a “spouse” of a married person must be construed to mean the spouse at the time of the execution of the instrument and not a future spouse. Thus, Cynthia contends that the terms “primary beneficiary’s spouse” and “son’s spouse” in the Trust solely referred to her because she was William’s spouse at the time the Trust was executed. We agree. Carol and William’s interpretation would ask this Court to view “spouse” as a status or class gift. This interpretation is inconsistent with Texas precedent regarding the use of classes in trust instruments and wills and, further, fails to harmonize all provisions of the irrevocable Trust before us. A class gift is defined as a gift of an aggregate sum to a body of persons uncertain in number at the time of the gift. Here, it was possible to identify a specific “spouse” at the time the Trust was executed in 2008. In contrast, there is no evidence Amanda intended the term “spouse” to encompass a body of persons uncertain in number at the time of the gift. Therefore, we hold that the grantor’s use of the term “spouse” referred to William’s spouse at the time the Trust was executed, and did not refer to a class of persons including future spouses.

Id. (internal citations omitted). The court therefore reversed and rendered for the first wife.

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© 2020 Winstead PC.National Law Review, Volume XI, Number 4
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About this Author

David Johnson Financial Institution lLtigation Winstead Law Firm Fort Worth Texas
Managing Shareholder - Fort Worth

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 Texas Fiduciary Litigator blog, which reports on legal cases and issues impacting the fiduciary field in Texas. 

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...

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