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Keywords

trialsummary judgmenttrustdeclaratory judgment
appealtrialsummary judgmentfiduciarytrustobjection

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Eckels v. Davis, 111 S.W.3d 687

Facts

J.B. Davis executed the 'J.B. Davis Living Trust' in 1993, designating two accounts as the trust corpus. After his death in 1998, the trust was to terminate, and the assets were to be distributed to his children and wife according to specific instructions in the trust amendment. However, due to a unilateral renumbering of one of the accounts by the financial management company, a dispute arose regarding the distribution of assets from the trust, leading the beneficiaries to file a declaratory judgment action.

On February 25, 1993, J.B. Davis (“Settlor”) executed the “J.B. Davis Living Trust” (hereinafter “Trust”). Exhibit A attached to the Trust document indicates that the following assets were to be delivered to the Trust to fund it: Delivered to the [Living] Trust at execution of the Trust document are all the assets in two accounts held in custody by Charles Schwab of Dallas, Texas and Morgan Keegan & Co. of Pensacola, Florida, each subject to a Discretionary Investment Advisory Agreement with Fiduciary Financial Services of the Southwest, Inc. of Dallas, Texas and designated by that latter firm as Account Number 1716 and Account Number 1717.

Issue

Did the unilateral renumbering of the trust accounts create an ambiguity in the trust document regarding the settlor's intent for asset distribution?

The primary issue we address in this appeal is whether the financial management company's unilateral act of renumbering one of the accounts for internal bookkeeping reasons transformed the assets in the renumbered account into non-trust assets.

Rule

The court applied the principle that if a trust document is ambiguous, extrinsic evidence may be considered to ascertain the settlor's intent.

If the language of a trust is unambiguous and expresses the intent of the settlor, it is unnecessary to construe the instrument because it speaks for itself.

Analysis

The court determined that the renumbering of the accounts created a latent ambiguity in the trust document. It examined extrinsic evidence, including letters from the settlor, to clarify his intent regarding the distribution of assets. The court concluded that the settlor intended for his wife to receive the remaining assets after his children received their specified amounts, regardless of the account numbers.

When extrinsic evidence and the evidence of the circumstances existing when the Trust was written are considered in this case, including letters written by Settlor in 1992 and 1993, the evidence shows without dispute that as early as 1992 Settlor had determined how he wanted his assets divided, which included giving $300,000 to each of his children and leaving the remainder of his assets to his wife, Marcy.

Conclusion

The court affirmed the trial court's summary judgment in favor of the settlor's wife, concluding that the trust's intent was clear despite the ambiguity created by the account renumbering.

Consequently, we hold that the trial court did not err by overruling Eckels and Davis's objections to Marcy and Welch's summary judgment evidence.

Who won?

Marceil Brewster Davis (the settlor's wife) prevailed because the court found that the settlor's intent was to ensure that she received the remaining assets after the specified distributions to his children.

Marcy and Welch also sought summary judgment, asserting that the account numbers were used in the Trust only to distinguish between Settlor's IRA Rollover Account assets and his Individual Account assets.

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