Sorrel v. Sorrel

1 S.W.3d 867, 1999 Tex. App. LEXIS 6611, 1999 WL 675883
CourtCourt of Appeals of Texas
DecidedAugust 31, 1999
Docket13-97-873-CV
StatusPublished
Cited by18 cases

This text of 1 S.W.3d 867 (Sorrel v. Sorrel) 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
Sorrel v. Sorrel, 1 S.W.3d 867, 1999 Tex. App. LEXIS 6611, 1999 WL 675883 (Tex. Ct. App. 1999).

Opinion

OPINION

DORSEY, Justice.

This issue in this case is whether a Trustee’s power to partition trust assets, realty, survives the termination of the trust. We hold that only those powers incidental to winding up the trust survive termination and, as the partition of realty is not necessary to closing the trust under the circumstances, the trustee could not partition realty among the beneficiaries.

Facts

Frank D. Sorrel died on February 6, 1981, leaving a will that established two trusts: a Wife’s Trust and a Family Trust. This case focuses on the Family Trust. Frank appointed his wife, Katherine, and their three sons — Frank Jr., John and Richard — to serve as co-trustees of the Family Trust. Katherine removed Frank Jr. as a co-trustee in 1991. She died in 1994. According to its express terms, the trust terminated upon the death of Katherine and the trust property was to be distributed per stirpes to Frank’s then living descendants.

Roughly two years after Katherine’s death, Frank Jr. brought suit against his brothers, trustees John and Richard, complaining that they had failed to wind up the trust and divide the trust property in accordance with the trust instrument. He also alleged impropriety in their capacities as trustees. He sought their removal and damages. In his amended petition, filed a year later, he alleged that the trustees had wrongfully continued to act as if the trust were still in effect and sought declarations that the trust terminated upon the death of his mother, that the real estate and other trust property vested in the beneficiaries immediately upon termination of the trust, and that any conveyances made by trustees after termination were void.

After trial, the court made the following findings:

(1) The Family Trust terminated upon Katherine’s death (on August 4, 1994), and the only duties and rights of the remaining trustees were to wind up the affairs of the trust;
(2) The trustees have not filed either an annual accounting or the final accounting;
(3) The trustees continued operating the trust at least until October 3, 1997;
(4) By special warranty deed dated June 26, 1997, the trustees attempted to partition the real estate belonging to the trust, and that attempted partition is void;
(5) The real estate belonging to the trust vested in the beneficiaries, Frank D. Sorrel, Jr., John Gordon Sorrel, and Richard Knapp Sorrel, as tenants in common upon termination of the trust.

The trial court’s October 15, 1997 order, declared that the trust had terminated, ratified the trustees’ actions since the termination of the trust except for the attempted partition of the real property, and *870 declared all real estate belonging to the trust was owned by the three brothers as tenants in common. The court also ordered the trustees to prepare a final accounting before December 7, 1997, and ordered the parties to pay their respective attorneys fees. We affirm the orders of the trial court in all respects.

Legal Effect of Termination of the Trust

The parties agree that the trust terminated upon Katherine’s death on August 4, 1994. Their disagreement concerns what powers the trustees retained after termination, and specifically, whether the trustees retained the power to partition the real property belonging to the trust nearly three years after its termination. We hold that the trustees did not retain the power to partition the trust property under these facts.

Texas Property Code § 112.052 states:

A trust terminates if by its terms the trust is to continue only until the ... happening of a certain event and the ... event has occurred. If an event of termination occurs, the trustee may continue to exercise the powers of the trustee for the reasonable period of time required to wind up the affairs of the trust and to make distribution of its assets to the appropriate beneficiaries. The continued exercise of the trustee’s powers after an event of termination' does not affect the vested rights of beneficiaries of the trust.

(Vernon 1995) (emphasis added). Thus, when the trust terminated on August 4, 1994, the trustees were permitted to continue to exercise their powers as trustees for a reasonable period of time required to wind up the affairs of the trust and make distribution of assets to the appropriate beneficiaries. Id. Appellants argue that because their powers as trustees expressly included the power to partition assets of the trust, they were endowed with that right beyond the termination of the trust. We disagree.

The express terms of the Family Trust state that upon Katherine’s death “the trust ... shall terminate, and the trust property shall be distributed per stripes to [Frank’s] then living descendants .... ” Appellants are correct in noting that where the language of a trust or will is unambiguous and expresses the intention of the maker, it is unnecessary to construe the instrument because it speaks for itself. See Corpus Christi Natn’l Bank v. Gerdes, 551 S.W.2d 521 (Tex.Civ.App.—Corpus Christi 1977, writ ref'd n.r.e.). “In such a situation a trustee’s powers are conferred by the instrument and neither the trustee nor the courts can add to or take away from such powers, but must permit it to stand as written and give to it only such construction as the trustor intended.” Id. at 523. Appellants also correctly point out that the property code allows a settlor to provide in the trust instrument how property may or may not be disposed of in the event of failure, termination, or revocation of the trust. Texas Prop.Code Ann. § 112.053 (Vernon 1995). Their argument fails, though, when they attempt to graft the powers conferred upon the trustees to administer the trust onto the trustees for purposes of distributing the assets of the trust after termination. We hold that this trust provides for how property shall be disposed of upon termination: per stripes to the settlor’s then-living descendants.

Upon termination, the trustees retained only the powers necessary to wind up the affairs of the trust or to distribute the trust property in accordance with the terms of the trust. Id. at § 112.052; cf. Nowlin v. Frost Nat. Bank, 908 S.W.2d 283, 289 (Tex.App.—Hous. [1st Dist.] 1995, no writ); Restatement 2d of Trusts § 344 (1957). This is so because title, in effect, had already passed to the beneficiaries:

On the termination of a trust, the estate of the trustee ceases, and the legal, as *871 well as the equitable, title vests in the beneficial owner without the necessity of any act or intervention on the part of the trustee, unless the intention of the creator appeal’s that the legal title should continue in the trustee. The termination of a trust leaves the trustee with a mere administrative title to the fund....

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Bluebook (online)
1 S.W.3d 867, 1999 Tex. App. LEXIS 6611, 1999 WL 675883, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sorrel-v-sorrel-texapp-1999.