In the Matter of Troy S. Poe Trust, the Texas appellate court determined that jury trials are available in trust modification actions to to ascertain disputed facts.
This particular trust dispute concerned the Troy S. Poe Trust. Under the Trust, the trustees are required to agree on all decisions. The two trustees, however, were combatants in other protracted litigation and could not agree on much of anything. One of the trustees, Bock, moved to modify the Trust to add a trustee, require a majority for decision making, and to define acceptable expenditures.
The other trustee, Richard, demanded a jury trial, which the probate court denied. After a bench trial, the probate court modified the Trust as requested. The court based the modifications on findings of fact made by the Texas probate court.
Richard appealed the judgment of the Texas probate court and claimed that modification of the Trust was in error, and, in any event, that disputed questions of fact should have been decided by a jury trial.
Can You Modify A Trust Under Texas Law?
Yes. Trusts are governed by the Texas Trust Code, found within the Texas Property Code. The Texas Trust Code permits judicial modification of a trust under § 112.054. A court may order that the terms of the trust be modified upon one of five conditions:
(1) the purposes of the trust have been fulfilled or have become illegal or impossible to fulfill;
(2) because of circumstances not known to or anticipated by the settlor, the order will further the purposes of the trust;
(3) modification of administrative, nondispositive terms of the trust is necessary or appropriate to prevent waste or impairment of the trust’s administration;
(4) the order is necessary or appropriate to achieve the settlor’s tax objectives or to qualify a distributee for governmental benefits and is not contrary to the settlor’s intentions; or
(5) subject to Subsection (d):
(A) continuance of the trust is not necessary to achieve any material purpose of the trust; or
(B) the order is not inconsistent with a material purpose of the trust.
Do You Have A Right To A Jury Trial In A Texas Trust Action?
Yes. If there are issues of fact to be determined, you have the right to a jury trial in a Texas trust action.
The Texas Constitution
The Bill of Rights of the Texas Constitution provides that the “right of trial by jury shall remain inviolate.” This provision applies to actions tried by jury when the Texas Constitution was adopted in 1876. There is no indication that trust modification actions were tried to a jury in 1876 or before.
In its judiciary article, the Texas Constitution states:
In the trial of all causes in the District Courts, the plaintiff or defendant shall, upon application made in open court, have the right of trial by jury; but no jury shall be empaneled in any civil case unless demanded by a party to the case, and a jury fee be paid by the party demanding a jury, for such sum, and with such exceptions as may be prescribed by the Legislature.
The Texas Constitution also gives the legislature authority to regulate jury trials to maintain their “purity and efficiency.” Texas Constitution art. I, § 15.
The Texas Trust Code and Jury Trials
The Texas Trust Code, contained in the Texas Property Code, § 115.012 provides that normal civil procedure rules and statutes apply to trust actions. The Texas civil procedure rules and the Texas Constitution guarantee the right to a jury trial. Therefore, compliance with the rules would give Richard the right to a jury trial in the trust modification action.
The Right To A Jury Trial Extends To Issues of Fact in Texas Equitable and Legal Proceedings
As a general rule, “when contested fact issues must be resolved before equitable relief can be determined, a party is entitled to have that resolution made by a jury.” The distinction between whether the matter is equitable or legal does not matter for the determination of the right to a jury trial.
In this case, the probate court abused its discretion in denying the trustee’s demand for a jury trial,because the question of whether the trust needed to be modified was a fact question. The Texas appellate court declined to address the appropriateness of the modification, since doing so would have been purely academic.