Johnson, In A Suit To Reform A Trust, A Texas Court Holds That There Was A Fact Issue On The Settlors’ Intent And Remanded For A Fact Finding (In re Ignacio G. & Myra A. Gonzales Trust)

The recent Court of Appeals ruling regarding In re Ignacio G. & Myra A. Gonzales Trust held the following regarding the rules for construing a trust:

“When we construe a will, we focus on the testator’s intent.” “We interpret trust instruments the same way as we interpret wills, contracts, and other legal documents.” We “ascertain a trust grantor’s intent from the language contained in the trust’s four corners and focus on the meaning of the words actually used, not what the grantor intended to write.” “In this light, courts must not redraft [trust documents] to vary or add provisions ‘under the guise of construction of the language of the [trust documents]’ to reach a presumed intent.” “We must interpret a trust to give meaning to all its provisions and to enact the intent of the grantor.” “The meaning of a trust instrument is a question of law when there is no ambiguity as to its terms.” “If the court is capable of giving a definite legal meaning or interpretation to an instrument’s words, it is unambiguous, and the court may construe the instrument as a matter of law.” “Only when the trust instrument’s language is uncertain or reasonably susceptible to more than one meaning will it be considered ambiguous so that its interpretation presents a fact issue precluding summary judgment.” In interpreting a trust document, we “(1) [c]onstrue the agreement as a whole; (2) give each word and phrase its plain, grammatical meaning unless it definitely appears that such meaning would defeat the parties’ intent; (3) construe the agreement, if possible, so as to give each provision meaning and purpose so that no provision is rendered meaningless or moot; (4) [ensure that] express terms are favored over implied terms or subsequent conduct; and (5) [note that] surrounding circumstances may be considered—not to determine a party’s subjective intent—but to determine the appropriate meaning to ascribe to the language chosen by the parties.” Also, we “must be particularly wary of isolating individual words, phrases, or clauses and reading them out of the context of the document as a whole.” “[A]n ambiguity does not arise merely because the parties advance conflicting interpretations.” “When a [document] contains an ambiguity, the granting of a motion for summary judgment is improper because the interpretation of the instrument becomes a fact issue.”

Download the full article by clicking Johnson, In A Suit To Reform A Trust, A Texas Court Holds That There Was A Fact Issue On The Settlors’ Intent And Remanded For A Fact Finding (In re Ignacio G. & Myra A. Gonzales Trust).

Posted by Jessica Zhang, Associate Editor, Wealth Strategies Journal.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s