In Re Ray Ellison Grandchildren Trust

261 S.W.3d 111, 2008 Tex. App. LEXIS 2300, 2008 WL 859149
CourtCourt of Appeals of Texas
DecidedApril 2, 2008
Docket04-06-00704-CV
StatusPublished
Cited by31 cases

This text of 261 S.W.3d 111 (In Re Ray Ellison Grandchildren Trust) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Ray Ellison Grandchildren Trust, 261 S.W.3d 111, 2008 Tex. App. LEXIS 2300, 2008 WL 859149 (Tex. Ct. App. 2008).

Opinions

OPINION

KAREN ANGELINI, Justice.

At issue in this appeal is whether, in creating an inter vivos, irrevocable trust [114]*114for the “descendants” of his children, Ray Ellison Sr. intended to include, as beneficiaries, his son’s adopted children, who were not adopted until they were adults. Because we conclude that Ray Ellison Sr. did not intend to include persons adopted as adults by his son, we affirm the summary judgment granted by the trial court.

Background

On March 9, 1982, Ray Ellison Sr. created an inter vivos, irrevocable trust called “the Ray Ellison Grandchildren Trust.” At the time the Trust was created, Ray Ellison Sr. had two adult children: Bonnie Ellison (then age 36) and Ray Ellison Jr. (then age 40). Bonnie Ellison had one daughter, Tracy Egan (now Tracy Egan Calloway) (then age 11). Ray Ellison Jr. had two daughters: Arleene Ellison (then age 18) and Darleene Ellison (then age 20).

The pertinent language of the Trust provides the following:

At the time of executing this trust instrument, the beneficiaries are well provided for by their parents. It is the desire of the Grantor that the income of this trust be accumulated and that the properties from time to time put into the trust shall be invested.... Any distributions for beneficiaries of this trust prior to the termination of the trust shall be solely in the discretion of the Trustees. However, the Grantor realizes that there may be circumstances arising in the future which would make it desirable or advisable on the part of the Trustees to make distributions from this trust prior to the time it terminates. Therefore, the Trustees are authorized to pay to or for the benefit of the descendants of BONNIE JEAN EGAN and the descendants of RAY ELLISON JR. (the descendants living at this time are TRACY EGAN, DARLENE ELLISON AND ARLENE ELLISON1) out of income, and if income is insufficient, out of the principal of this trust, from time to time such sums as are reasonably needed for their health, including medical, dental, hospital and nursing expenses and expenses of invalidism, and such sums as are reasonably needed for their maintenance and support. There shall be no requirement that the same amount be paid for each of such persons. In determining the amount to be paid to or for the benefit of each of such persons, the Trustees shall take into consideration such other income or means of support known to the Trustees that each of them is entitled to receive....
This trust shall terminate upon the 31st day of December, in the year 2020, and upon termination, the funds and properties remaining in the trust after paying the expenses of the trust shall be distributed as follows:
A. FIFTY PERCENT (50%) to the descendants of BONNIE JEAN EGAN, per stirpes, and if there be none, to the descendants of RAY ELLISON, JR., per stirpes.
B. FIFTY PERCENT (50%) to the descendants of RAY ELLISON, JR., per stirpes, and if there be none, to the descendants of BONNIE JEAN EGAN, per stirpes.
In the event the above named persons are all deceased and none of them have left living descendants, the funds and properties remaining in the trust shall be distributed to one or more charitable organizations in which contributions are then deductible under sections 642(c) and 2055(e) of the Internal Revenue Code of 1954 in such shares as the Trustees may designate,

(emphasis added).

In 1989, Ray Ellison Jr. divorced his first wife, to whom he had been married [115]*115for thirty-two years. In 1995, he remarried.

In 1998, sixteen years after the Trust was created, Ray Ellison Jr.’s father, Ray Ellison Sr., was found to be incapacitated by a probate court in Bexar County.2 Ray Ellison Jr.’s sister, Bonnie Ellison, was designated by the probate court as Guardian of Ray Ellison Sr.’s Person, and Frost National Bank was appointed Guardian of his Estate.

In 2003, twenty-one years after the Trust was created, Ray Ellison Jr. adopted the adult children of his second wife: Aaron Lindner (then age 39), Jeffrey Lindner (then age 37), and Marc Lindner (then age 36) (“the Lindners”). Immediately after their adoption, the Lindners moved for an accounting of the Trust. The Trustees, however, refused to provide an accounting and filed a declaratory judgment action requesting that the probate court “determine whether the Lindners are beneficiaries of the Trust and therefore entitled to an accounting.” In response, the Lindners filed an answer and counterclaim for declaratory judgment, requesting that the court declare them beneficiaries of the Trust.

Darleene and Arleene Ellison then joined the lawsuit and filed an answer to the Trustee’s original petition for declaratory judgment and an answer to the Lind-ners’ counterclaim for declaratory judgment. They also filed their own original counterclaim for declaratory judgment. They alleged that their father’s adoption of the Lindners was a “sham designed by” their father and the Lindners in an attempt to give the Lindners standing to make claims against the Trust, based on their contention that they are now “descendants” of their father. They also alleged that their grandfather did not intend for the term “descendants” to include any person adopted as an adult when he executed the Trust on March 9, 1982. Therefore, they requested the trial court declare that the term “descendant” as used in the Trust does not include those persons adopted as an adult and, specifically, does not include the Lindners. In their second amended answer, Arleene and Darleene Ellison also pled affirmative defenses. They alleged that the Lindners are “equitably estopped from claiming to be beneficiaries of the Trust as a result of their participation in and/or attempt to benefit from the wrongful use of the adult adoption statute to divert Trust assets to individuals who would otherwise have no color-able claim or right to those assets.” They alleged that the Lindners did not come to the court with “clean hands” and that their “claims to be beneficiaries of the Trust are barred because it is contrary to public policy of Texas for persons to use the adult adoption statutes to divert Trust assets to individuals who would otherwise have no colorable claim or right to those assets.”

Tracy Egan Calloway also joined the litigation and filed an answer to the original petition for declaratory judgment and answer to the Lindners’ counterclaim for declaratory judgment, bringing the affirmative defenses of fraud, constructive fraud, illegality, and estoppel as well as the equitable defense of unclean hands.

The Lindners then moved for partial summary judgment, arguing that they are beneficiaries of the Trust as a matter of law. Arleene and Darleene Ellison responded by filing a cross-motion for partial summary judgment, arguing that the Lind-ners are not beneficiaries of the Trust as a matter of law.

The trial court denied the Lindners’ motion and granted Arleene and Darleene [116]*116Ellisons’ motion. In its order, the trial court determined as a matter of law the following:

(1) the particular language in the March 9, 1982, Ray Ellison Grandchildren Trust [that] identifies or refers to the Trust beneficiaries as “descendants of BONNIE JEAN EGAN” and “the descendants of RAY ELLISON JR.” does not' include any person whom Bonnie Jean Egan or Ray Ellison Jr.

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Cite This Page — Counsel Stack

Bluebook (online)
261 S.W.3d 111, 2008 Tex. App. LEXIS 2300, 2008 WL 859149, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-ray-ellison-grandchildren-trust-texapp-2008.