Tomlinson v. Tomlinson
1997 WL 781481, 960 S.W.2d 337 (1998)
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Rule of Law:
A valid express trust can be created in Texas even if the creating instrument lacks specific terms or trustee duties, provided the settlor clearly manifests an intent to create a trust, identifies the property, beneficiaries, and object, and the state's statutory provisions (such as the Texas Property Code) supply the necessary administrative framework.
Facts:
- Richard Tomlinson participated in the Walter Rossler Company Profit Sharing Plan and Trust ('Rossler Plan').
- During his marriage to Toni Annette Tomlinson, she was designated as the beneficiary of his death benefits under the Rossler Plan.
- Richard and Toni Annette Tomlinson divorced.
- On December 21, 1993, Richard executed a new beneficiary designation, removing Toni Annette as beneficiary.
- The new designation listed "Richard Lee Tomlinson II, Rileigh William Tomlinson, Trustee Lynn Tomlinson" as beneficiaries of his Rossler Plan death benefits.
- Richard Lee Tomlinson II and Rileigh William Tomlinson were Richard’s minor sons.
- Lynn Tomlinson was Richard’s brother.
- Richard died on April 3, 1995.
- No other trust instrument existed beyond the quoted language of the beneficiary designation.
Procedural Posture:
- Lynn Tomlinson sought to administer Richard Tomlinson's death benefits as trustee, while Toni Annette Tomlinson contended that no valid trust was created and she was entitled to receive the benefits on behalf of the minor children.
- Toni Annette Tomlinson filed a cross-motion for summary judgment in the trial court.
- The trial court granted Toni Annette Tomlinson's cross-motion for summary judgment, finding that the purported trust was not effective due to the failure to provide any terms or instructions for its operation.
- Lynn Tomlinson appealed the trial court's order; Lynn Tomlinson is the appellant, and Toni Annette Tomlinson is the appellee in this appellate proceeding.
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Issue:
Does a beneficiary designation that names "minor beneficiaries, Trustee Lynn Tomlinson" for death benefits, without explicitly stating the trustee's duties or trust terms, validly create a trust under Texas law, given that the Texas Property Code provides default rules for trust administration?
Opinions:
Majority - Chavez, Justice
Yes, a valid trust was created. Justice Chavez explained that under Texas law, no specific forms or words are required to create a trust, as long as there is reasonable certainty about the trust's property, beneficiaries, and object. By naming 'Trustee Lynn Tomlinson' in the beneficiary designation, Richard clearly showed his intention to create a trust. The death benefits from the Rossler Plan were the trust property, Richard's minor sons were the beneficiaries, and their welfare was the clear object. The court held that even though the designation lacked specific instructions for the trustee, the comprehensive provisions of the Texas Property Code, Title 9, Subtitle B, supply all the necessary details regarding a trustee's powers, duties, and standards for management and investment, such as general authority to manage and invest trust property and rules for distribution to minors. The court distinguished a prior case, City of Wichita Falls v. Kemp Public Library Bd. of Trustees, stating that its relevant language was dictum and inapplicable because Richard did express an intent to create a trust, unlike the situation in that case where no such intent was shown. Therefore, the trust was not too vague to be valid under Texas law.
Analysis:
This case significantly clarifies the requirements for establishing an express trust in Texas, particularly when the creating instrument is informal or minimalistic. It reinforces that a settlor's clear intent, coupled with the identification of core trust elements, is paramount, and courts will utilize statutory default provisions to uphold the trust rather than invalidate it for lack of explicit administrative details. This ruling provides flexibility for individuals creating trusts, especially for simpler arrangements like beneficiary designations, and ensures that their wishes for their property's disposition are honored even without a comprehensively drafted trust document, potentially reducing litigation over informal trusts by validating instruments that rely on statutory supplements.
