Background

Letha and Ray Carroll were the parents of Johnny and Donald. Ray Carroll died in 1987, leaving an irrevocable testamentary trust called the Johnny Carroll Trust. Ray named Johnny as the trustee and Letha as the beneficiary of the trust. In November 2005, Donald and Letha sued Johnny, individually and as trustee, in the 66th District Court of Hill County. They alleged that Johnny failed to provide an accounting, engaged in self-dealing, wasted trust assets, and failed to file income tax returns. Donald and Letha requested that the court order an accounting, remove Johnny as trustee, and award damages for his alleged misconduct.

In February 2006, the case was transferred to the Hill County Court at Law. By partial summary judgment that court removed Johnny as trustee, ordered him to provide an accounting, and ordered the trust records to be turned over to Donald, the successor trustee. In a final default judgment signed October 3, 2006, the county court awarded Donald and Letha $1 million for breach of fiduciary duty, $2.8 million in exemplary damages, and $15,000 in attorney’s fees.

The Supreme Court

The case was ultimately appealed to the Texas Supreme Court. The court noted that Johnny and Letha sought removal of a trustee, an accounting by a trustee, and appointment of a successor trustee, together with money damages and attorney’s fees. Removal of a trustee, an accounting by a trustee, and appointment of a successor trustee are all “proceedings concerning a trust” expressly governed by the statute and fall under the exclusive jurisdiction of the district court. As such, transfer to the Hill County Court at Law was improper because it was apparent from the pleadings that the county court lacked jurisdiction over the claims. Because the Hill County Court at Law had no jurisdiction over the claims, its judgment was void.

About Us

LoneStarLivingTrust.com is here to help Texas families reach their unique estate planning goals. I am an Attorney with over 10 years of experience helping families and protecting millions of dollars from taxes and court costs. I work directly with my clients and do not communicate through paralegals and staff. LoneStarLivingTrust.com is based in The Woodlands, Texas, however I help families throughout all of Texas. Call us at (832) 426-3913 to get started today.

What is Guardianship?

A guardianship is a court-supervised administration for a minor or for an incapacitated person.  A person — called the guardian — is appointed by a court to care for the person and/or property of the minor or incapacitated person — called the ward. Thousands of dollars and months can be spent establishing if a person is or is not incapacitated and in need of a court appointed Guardian.

After that is over your family is still under the watchful eye of the court and must make regular reports and in some cases ask permission to perform certain acts. Two of the most expensive words in the English language are “court appointed” anything. If you want to save your money and keep family matters private then you may want to avoid Guardianship.

How Can You Avoid Guardianship?

Guardianship is a last resort in most cases. It is generally used when there is no other legal way for a person to help a loved one with their financial or medical decisions. You can avoid Guardianship with a few simple steps:

1. Prepare a valid and appropriate Durable Power of Attorney for Property;
2. Prepare a valid and appropriate Power of Attorney for Health Care Decisions;
3. Prepare a valid Designation of Guardian so you at least can pick who your Guardian is if one needs to be appointed; and
4. Many families use a Texas Living Trust as the framework for controlling the family finances outside of court in the event of disability or death.

Speak with a Texas Living Trust attorney today if you want to find out more about how you can protect yourself and your family from court appointed Guardianship. You can use the online contact form or call me at (832) 426-3913.

About the Author

LoneStarLivingTrust.com is here to help Texas families reach their unique estate planning goals. I am an Attorney with over 10 years of experience helping families and protecting millions of dollars from taxes and court costs. I work directly with my clients and do not communicate through paralegals and staff. LoneStarLivingTrust.com is based in The Woodlands, Texas, however I help families throughout all of Texas.

It is more difficult to pin down the real value of an estate plan. It is paper and its real value exists only if it achieves your goals. Many families that neglect to prepare an estate plan for the protection of themselves and their families provide us with common examples of what goes wrong after they are no longer around. The Wall Street Journal gave us a nice summary of these issues in the article “You’re Not Worth It” from March 8, 1999.

Messages to family if you do not get a will.

10. All your money goes to the wrong person.

9. Uncle Sam will become your beneficiary.

8. Your business could go to people who cannot stand each other.

7. The court gets to help run your family business.

6. Your [minor] kids’ finances will get awfully complicated.

5. You son will be able to buy a Ferrari.

4. Your kids may end up paying taxes on the life insurance collected by your sister.

3. Your soon-to-be-ex-son-in-law will get a big chunk of your assets.

2. Your neediest child gets shortchanged.

1. Your final message is: ‘I don’t care.’

Bonus: Higher legal fees will reduce heirs’ net inheritance.