Court of Appeals Rules Trustee Has Authority to Enter Into Lease and Encumber Trust Assets

The First Court of Appeals issued an opinion upholding the right of the Trustee of a Trust whose principal asset is a large ranch in West Texas to enter into a Lease that would extend beyond the measuring life of the Trust. The Court of Appeals also agreed the Trustee has the authority to encumber Trust assets as necessary to preserve the corpus of the Trust. In rejecting the challenge of the Trust beneficiary to these actions, the opinion affirmed the broad authority granted to the Trustee under this particular Trust and well as under the Trust Act. The Court also rejected the beneficiary-Appellant’s challenge to ripeness. The Court approved the Trustee’s conclusion that given the litigious reputation of this beneficiary, as well as disagreement among all the beneficiaries, litigation seemed unavoidable on the issue, and therefore the issue was ripe for review.

The Appellee’s brief was written by John Buckley and Angie Olalde. Ms. Olalde presented the Appellee’s oral argument before the panel that included Justices Keyes, Massengale, and Sharp.

David B.T. Myrick, Jr. v. Moody National Bank, Trustee, No. 01-09-00510-CV On appeal from the 10th District Court of Galveston County, Texas