Court of Appeals of Texas, Fifth District, Dallas
IN THE ESTATE OF JOHN M. LITTLE, JR., DECEASED
Appeal from the Probate Court No. 1 Dallas County, Texas
Trial Court Cause No. PR-15-03606-1
Justices Whitehill, Partida-Kipness, and Pedersen, III
case involves a dispute between three siblings concerning
funds in their deceased father's survivorship bank
account that gave only one sibling survivorship rights. The
trial court granted summary judgment for the account
surviving party against his siblings' claims and entered
a final take nothing judgment from which his siblings appeal.
pivotal question is whether, absent additional facts not
present here, a revocable trust's non-settlor co-trustee
owes the trust's contingent beneficiaries fiduciary
duties regarding the settlor's decisions to exclude
assets from the revocable trust and instead deposit those
assets in a survivorship account favoring the co-trustee as
the sole surviving party. The answer is "no,"
because the settlor retains the prerogative to dispose of the
assets under his or her control as he or she sees fit.
specifically, appellants raise two issues. The first issue
argues that the trial court erred in granting final summary
judgment against them on their fiduciary breach and money had
and received claims. We reject that issue because, although
appellants have standing as trust beneficiaries complaining
about appellee's conduct as a co-trustee instead of the
settlor's conduct, appellants did not raise a genuine
issue of material fact showing that appellee breached a
fiduciary duty owed to them in this case.
second issue argues that the trial court erroneously excluded
certain evidence from the settlor's estate planning
lawyer regarding the trust's creation-but before the
settlor engaged in the transactions at issue. We reject this
issue because appellants have not shown that the excluded
evidence was relevant.
we conclude that the trial court did not err in granting
summary judgment against appellants and affirm the trial
Little, Jr. (Father) had three children; Mary Ann, Jay,
The Little family owned a ranch and related livestock and
equipment. Father owned a 100% interest in the
livestock and equipment. Prior to 2006, Mary Ann, Father,
Jay, and Dan each owned a 25% undivided interest in the real
also had a will and a revocable living trust (the Trust).
According to Dan's affidavit, Father created a will dated
June 2, 2010. Dan further stated that Father created the
Trust in 2005 and amended and restated the Trust agreement in
February 2014. Mary Ann and Jay do not dispute these facts,
and the Trust agreements are in the record. The Will,
however, is not.
named Dan, Mary Ann, and Jay residuary Trust beneficiaries,
and he named himself and Dan co-trustees during Father's
life t i me. The Trust fur t her provided that Northern Trust
would serve as trustee when Father died.
Trust agreements include a "Schedule of Property."
Both schedules list "$10" as the Trust's only
asset. There is no argument or evidence that Father ever
deeded the ranch real estate or conveyed the ranch livestock
and equipment to the Trust. Nor is there any evidence in the
record that Father ever funded the Trust with anything other
2000, and again in October 2014, Father created survivorship
bank accounts at Northern Trust. He named Dan as both
accounts' sole surviving party. Mary Ann and Dan do not
dispute these facts.
2006, Father sold his 25% interest in the ranch land to Mary
Ann, Jay, and Dan, in exchange for which each signed a $169,
500 promissory note secured by each child's interest in
the real estate. Although the notes themselves are not in
evidence, Dan's summary judgment affidavit states that
the notes were "payable to Dad in the amount of $169,
500 which were all payable on demand, though the
understanding among our family members was that Dad would not
make demand for payment until the ranch was sold to a third
party." Mary Ann and Jay did not controvert this
evidence. There is no argument or evidence that the Father
transferred or conveyed the notes to the Trust.
affidavit further states:
As with the first Northern Trust survivorship account, Dad
deposited whatever funds came into his possession into the
second account and paid all of his living expenses and debts
out of that account until his death, with me or my assistant
Debbie Cooper helping make deposits and prepare and send out
checks for him throughout that time until his death.
is no contrary evidence.
document dated March 24, 2014 (roughly eight years after the
notes were executed) and captioned "RELEASE OF
LIEN" is in the record. This document recites that
Father and the Trust were the note payees. These documents,
however, do not themselves contain a promise by any note
obligor to pay any money to any payee.
Little family sold the ranch in March 2014. In addition to
the amount paid for the real estate, the purchaser paid: (i)
$108, 000 for equipment, (ii) $108, 000 for livestock, (iii)
$23, 904.08 for a life estate on 24.820 acres of the ranch
owned by a family partnership in which Father had an
interest, and (iv) $134, 723.68 for the partnership interest
purchased in connection with the life estate. All of the sale
proceeds attributable to Father's interests were
deposited in the second survivorship account. There was $605,
751.45 in that account when Father died in 2015.
Trust's terms, Dan ceased being a co-trustee when Father
died. Although named as successor trustee, Northern Trust
declined to serve. Consequently, the probate court appointed
a substitute trustee who accepted that appointment.
estate earned $4, 349.24, which was deposited in the
survivorship account. And Dan paid $200, 611.92 of Father's
post-death expenses from that account.
being told that the note proceeds were to become Trust
property, Dan transferred money from the survivorship account
to the trustee, including (i) $70, 595.49 in proceeds from
the promissory note payments, (ii) $23, 904 received for the
life estate, and (iii) $121, 201.43 for Father's share of
the partnership. He transferred the money so the trustee
could cover Father's bequests and remaining expenses.
Post-transfer, $216, 000 in survivorship account funds
remained. Those remaining funds form the basis of this
December 9, 2015, Mary Ann and Jay sued Dan in the 191st
District Court alleging that he breached a fiduciary duty
regarding the transfer of funds from the revocable trust to
the survivorship account. That case was subsequently
transferred and made a part of the current probate court
trustee moved for instructions seeking direction regarding
the disposition of potential claims against Dan for the
remaining survivorship account funds. The probate court
subsequently entered an order finding that "pursuing the
claims against Dan would not be in the best interest of the
Trust, the Estate, or the beneficiaries." Accordingly,
the probate court ordered the trustee to assign the potential
claims against Dan 1/3 each to Mary Ann, Jay, and Dan-which
the trustee did.
moved for summary judgment arguing that (i) Mary Ann and Jay
have no standing to assert their claims against him and (ii)
there is no evidence that Dan breached a fiduciary duty in
connection with the $216, 000.
Ann and Jay responded to that motion and attached the
affidavit of James Mincey, Father's estate planning
lawyer. Dan objected to paragraphs three through five of that
affidavit, and the court sustained those objections. The
court also sustained objections to Dan's summary judgment
exhibit 4 (an email from Mincey).
court granted Dan's summary judgment motion and entered a
final judgment that dismissed with prejudice all claims that
Mary Ann and Jay have asserted or could have asserted in ...