David Fowler Johnson, in his Texas Fiduciary Litigator Blog, has made available for download his article, “Court Holds That Trust Was Not Ambiguous And Provided The Trustee Discretion In Making Income Distributions”, which discusses Wells Fargo, N.A. v. Clower and a trustee’s discretion in making income distributions. The article beings as follows:
In Wells Fargo, N.A. v. Clower, a trustee filed suit for declaratory relief regarding its discretion to make income distributions. No. 02-20-00058-CV, 2021 Tex. App. LEXIS 7675 (Tex. App.—Fort Worth September 16, 2021, no pet.). The beneficiaries filed counterclaims for breach of fiduciary duty. The trial court ordered the trustee to pay into the registry of the court over $250,000 for attorney’s fees it had paid out of the trust and ordered the trustee to no longer pay its attorneys from the trust. The beneficiaries challenged the trustee’s standing and capacity as trustee, alleging that the trustee was only a de facto trustee and not a de jure trustee. After a three-day bench trial on the issue of standing, the trial court concluded in 2011 that Wells Fargo had standing as trustee, i.e., was the de jure trustee of the trust. The court noted that the beneficiary had also lost on the standing issue in federal court. Id. (citing Clower v. Wells Fargo Bank, N.A., 2:07-CV-510-TJW-CE, 2011 U.S. Dist. LEXIS 162702, 2011 WL 13196511, at *2 (E.D. Tex. Sept. 30, 2011); Clower v. Wells Fargo Bank, N.A., 259 F.R.D. 253, 254, 261-62 (E.D. Tex. 2009) (order granting class certification), order vacated, appeal dism’d, 381 Fed. Appx. 450 (5th Cir. 2010)).
To see the full article, click: “Court Holds That Trust Was Not Ambiguous And Provided The Trustee Discretion In Making Income Distributions”
Posted by Anthony Tran, Associate Editor, Wealth Strategies Journal