David Fowler Johnson, in his Texas Fiduciary Litigator Blog, discusses LaPree v. LaPree, No. 03-20-00465-CV, 2022 Tex. App. LEXIS 1325 (Tex. App.—Austin February 24, 2022, no pet. history).
In LaPree v. LaPree, a wife had three trusts where she was the primary beneficiary. No. 03-20-00465-CV, 2022 Tex. App. LEXIS 1325 (Tex. App.—Austin February 24, 2022, no pet. history). Upon attaining the age of thirty two, the trusts terminated and the trustee transferred the assets to the wife. The husband and wife then created a revocable trust. They were both named trustors and co-trustees. They signed an accompanying revocable trust agreement, which included the following statement: “At the time this Agreement is signed, TRUSTORS contemplate that all of their assets that will be transferred to the Trust will be community property.” It also contained the following provision in paragraph 18.2: “[A]n individual TRUSTOR, without joinder of the other TRUSTOR, can modify or revoke this Agreement in writing during the TRUSTORS’ joint lifetimes while that individual TRUSTOR is not disabled with respect to any separate property of that individual TRUSTOR held as an asset of the Trust and such individual TRUSTOR may terminate this Agreement in whole or in part with respect to such separate property by written notice delivered to the TRUSTEE.” The wife then transferred all of the assets into the new trust. She then later filed for divorce, and she took the position that the assets were her separate property. The husband alleged that the new trust’s assets were community. The trial court ruled for the wife, and the husband appealed.
The court of appeals affirmed the trial court’s ruling for the wife, citing Texas Family Code Section 4.203:
Posted by Marin Larkin, Associate Editor, Wealth Strategies Journal.