Probate & Trust Law Section Conference Manual ... - Minnesota CLE

entitled to a jury trial because the question was one of contract formation.
The Court held that the claim involves the interpretation and construction
of the original trust agreement and they seek equitable relief. As a result,
the plaintiffs are not entitled to a jury trial as third party beneficiaries.
8. Gamboa v. Gamboa, 383 S.W.2d 263 (Tex. App. 2012). In divorce
action, spouse had standing to bring action against the trust. Prior to
marriage, settlor established various trusts for future children. In divorce
action, spouse claimed that the trusts were being used to perpetuate fraud
upon her. The first issue decided by the Court was that because the trust
agreement did not authorize a trustee to resign, the trustee needed to
petition the court if he wished to resign. The Texas Probate Code
provided that any interested person may bring an action against a trustee.
Because the spouse claimed that the trusts were the settlor’s alter ego and
were being used in a fraudulent manner, spouse was an interested person
and could bring an action against the trustee.
9. Nalley v. Langsale, 734 S.E.2d 908 (Ga. Ct. App. 2012). Former trustee
lacks standing to pursue action against beneficiaries. In order to
equalize gifts made to sons, the grantor established a trust for his daughter,
funding it with company stock, with other shareholders acting as trustees.
Grantor created two agreements, with each trust having a different
termination date; the trustees proceeded as though the trust with the earlier
terminating date governed. Company redeemed the stock owned by the
trust pursuant to the valuation method found in the shareholders
agreement. Sometime after the stock was redeemed, beneficiaries filed
suit against the trustees seeking return of the stock. One of the trustees
had since ceased to act and the Court determined that the former trustee
lacks standing to pursue claims on behalf of remainder beneficiaries for
return of trust funds; that action belongs exclusively to the trust
beneficiaries and current trustees.
10. *In re Spencer Irrevocable Trust, No. A12-0444, 2012 WL 6097226
(Minn. Ct. App. Dec. 10, 2012). Contingent beneficiaries in default of
exercising a power of appointment have an interest in the trust. Trust
beneficiary, who was still living, had a testamentary power of appointment
over a trust which could only be exercised in her last will and testament.
Beneficiary purported to exercise the power in a notarized document
which was not a will. Petitioners, who were excluded as remainder
beneficiaries through the exercise of the power, argued that the exercise
was invalid because it was not exercised in a will. The Court ruled that
the beneficiaries who would take under the trust if the power of
appointment was not exercised had an interest in the trust and could
petition the Court; however, the Court would not rule on whether the
exercise was effective until the beneficiary’s death.
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