Weatherly v. Byrd

• Decision Date: 10 May 1978
• Docket Number: No. B-6934,B-6934
• Citation: 566 S.W.2d 292
• Parties: John R. WEATHERLY, Trustee, Petitioner, v. Jacqueline BYRD, guardian of the person and Estate of Aileen Mitchell, Respondent.
• Court: Texas Supreme Court

Page 292

566 S.W.2d 292

John R. WEATHERLY, Trustee, Petitioner, v. Jacqueline BYRD, guardian of the person and Estate of Aileen Mitchell, Respondent.

No. B-6934.

Supreme Court of Texas.

May 10, 1978.

Rehearing Denied May 31, 1978.

Kelley, Ryan, Merrill & Young, C. O. Ryan, Houston, for petitioner.

Leeper & Priddy, Laurance L. Priddy, Law, Snakard, Brown & Gambill, R. F. Snakard, Fort Worth, for respondent.

McGEE, Justice.

This appeal arises from an action by the guardian of an incompetent settlor to revoke a revocable inter vivos trust. Two issues are presented by this appeal. First, it must be determined if a guardian has the authority to exercise an incompetent settlor-ward's right of revocation without seeking court authorization. Second, if court authorization is necessary, it must be determined whether the probate court or the district court has jurisdiction to enter such an order. This cause was filed in the Probate Court of Tarrant County which subsequently entered an order authorizing the guardian to revoke the trust. The court of civil appeals affirmed. 552 S.W.2d 573. We reverse the judgments of the courts below and the cause is dismissed.

On September 24, 1971, Aileen Mitchell executed a revocable inter vivos trust agreement naming herself as beneficiary. The purpose of the trust was to provide for the settlor during her lifetime and to dispose of the trust estate after her death. John Weatherly, her lawyer for some years, prepared the trust agreement and was also named as the trustee. The trust stated that Miss Mitchell had the right to alter, amend, revoke, or terminate the trust upon giving ten days' written notice to the trustee. Miss Mitchell directed that the residue be divided between the named beneficiaries in the event the trust was not revoked prior to her death.

In late 1972, Miss Mitchell became unable to care for herself and was placed in a convalescent home by Weatherly. Jacqueline Byrd, a great niece, discovered that Miss Mitchell was in the convalescent home and brought her back to Fort Worth. In March, 1973, Miss Mitchell was declared an incompetent and Mrs. Byrd was appointed guardian. Miss Mitchell resided with Mrs. Byrd until May of 1975, when she was placed in a convalescent home in Fort Worth where she remained until her death in April, 1977.

In October, 1973, Mrs. Byrd filed a petition in the Probate Court of Tarrant County seeking an order authorizing her to revoke the trust. She also sought to have the trustee render an accounting of the trust property and to deliver the property to her. Weatherly filed a plea of privilege and a plea to the jurisdiction. In the former pleading he sought to have the cause transferred to Harris County, where he resided. The probate court overruled the plea of privilege. On appeal, the court of civil appeals held that venue for the portion of the action concerning revocation of the trust was proper in the Probate Court of Tarrant County. On its own motion, however, it held that the probate court did not have jurisdiction over that portion of the action concerning the accounting and ordered that portion of the suit be dismissed. Weatherly v. Byrd, 519 S.W.2d 504 (Tex.Civ.App. Fort Worth 1975, no writ).

On remand, a hearing was held in probate court to consider revocation of the inter vivos trust. The court overruled Weatherly's plea to the jurisdiction that asserted that the Texas Trust Act ¹ placed jurisdiction of such a proceeding in the district court. The court then entered an order authorizing and directing Mrs. Byrd to terminate the trust.

The court of civil appeals affirmed the judgment of the probate court. In doing so, it first held that the guardian had the authority to revoke the trust without the authorization of the probate court. The court reasoned that the right to revoke the revocable trust "vested" in the guardian upon her appointment and qualification to act as such. The court also held that, in any event, the probate court had exclusive jurisdiction to enter the order from which the trustee had appealed.

We disagree with the court of civil appeals' first holding. It is the prevailing view that a guardian may not exercise the purely personal elective rights of his ward. See Howard v. Imes, 265 Ala. 298, 90 So.2d 818 (1956); Chase Nat'l Bank v. Ginnel, 50 N.Y.S.2d 345 (Sup.Ct.1944); Hendricks v. Grant County Bank, 379 P.2d 693 (Okl.1963); Delevan v. Thom, 244 S.W.2d 551 (Tex.Civ.App. Beaumont 1951, no writ); 39 Am.Jur.2d Guardian and Ward § 102 (1968). Although Delevan v. Thom, supra, dealt with a widow's right of election under a will, its reasoning is persuasive in this instance. The court there stated:

"We have examined the guardianship statutes, and it is our conclusion that the right of election . . . did not constitute such a property right as formed a part of the estate committed to the care of the guardian of her estate, or such a right as belonged to the guardian of her person. We hold, as a consequence, that the guardian could not exercise the right of election." Delevan v. Thom, 244 S.W.2d at 555-56.

The right to revoke a trust is a personal right involving the exercise of personal discretion and in that respect it is similar to the right of election under a will. See G. Bogert, The Law of Trusts and Trustees § 1000 (2d ed. 1962). Accordingly, we hold that the right to revoke a revocable trust, absent an agreement to the contrary, is a purely personal right of the settlor and does not vest in the guardian.

This is not to say that a revocable inter vivos trust becomes irrevocable after the settlor has been declared incompetent. Rather, it means that the guardian must apply to a court of competent jurisdiction for authorization to revoke the trust. The court of civil appeals held that the probate court was the proper court in which to seek such an authorization. We disagree.

Mrs. Byrd argues that article 7425c, § 8 ² provides a strong inference of the probate court's jurisdiction to enter an order authorizing the guardian to revoke the trust. She urges that if the right of revocation held by the ward is a power that the probate court may authorize the guardian to release, then it may be inferred from section 8 that the probate court may also authorize the guardian to exercise the ward's right of revocation. We do not agree with this interpretation of the provisions of section 8. Even if the definition of a power could be construed to include the power to revoke an inter vivos trust, the provisions of section 8 expressly provide only for the release of such a power, not for the exercise thereof. Furthermore, the primary purpose of article 7425c is tax related in that it is to prevent assets subject to a power of appointment from being included in the decedent's estate for federal estate tax purposes, a situation not applicable in this...