## Facts

- In 1934, W.L. Moody, Jr. created a trust for the benefit of his descendants; the trust corpus included a 15,000-acre ranch near Junction, Texas.
- Moody’s son, W.L. Moody III (William), had three children: Edna Moody, Virginia Moody, and W.L. Moody IV (Bill).
- The trust was drafted to terminate upon the death of the last surviving child of William; the parties agreed termination occurred in 2014 when Bill died.
- Article III governed distribution at termination and provided that the trust property would be distributed “in equal shares per stirpes to the then living grandchildren of [William], and the surviving descendants of any deceased grandchildren.”
- At termination, William had eight grandchildren in three family branches:
  - Edna’s branch: two grandchildren (including Edna Archer).
  - Virginia’s branch: two grandchildren, one of whom was deceased and survived by a descendant (Virginia Beardsley, deceased, survived by Haden Beardsley), and Sarah Kathryn Pacheco.
  - Bill’s branch: four grandchildren (Janice Moody, Linda Moody, Elizabeth Moody, and W.L. Moody V).
- A dispute arose over whether Article III required (a) an equal per-capita division among all eight grandchildren (each receiving 1/8), or (b) a per-stirpes division by family branch (an initial division into thirds by William’s three children, then equal division within each branch).
- In a declaratory-judgment proceeding in the Galveston County Probate Court, Bill’s children argued for per-capita distribution (1/8 each), while beneficiaries from Edna’s and Virginia’s branches argued for a three-branch per-stirpes distribution (Edna’s and Virginia’s children each receiving 1/6; Bill’s children each receiving 1/12).
- The probate court ruled that Article III required a per-capita distribution to the grandchildren, applying per stirpes only to the descendants of a deceased grandchild.
- Edna and Virginia branch beneficiaries appealed to the Texas Court of Appeals (Fourteenth District).

## Issues

1. Did Article III’s direction to distribute the trust estate “in equal shares per stirpes” to William’s grandchildren and the descendants of deceased grandchildren require a per-capita distribution among the eight grandchildren, or a per-stirpes distribution by branch keyed to William’s three children?
2. Did the probate court err by construing “in equal shares” to mandate equality at the grandchild level in a way that effectively limited the work done by the phrase “per stirpes,” when the instrument’s other provisions used different wording for different distribution methods?

## Decision

- The court of appeals reversed the probate court’s judgment and remanded.
- It held that the phrase “in equal shares per stirpes,” read as a single distribution directive, required a per-stirpes distribution by family branch, not a per-capita distribution among all grandchildren.
- Because the remainder beneficiaries descended from William’s three children, the trust estate had to be divided first into three equal shares (one share for each branch), and the grandchildren’s interests were then computed from their branch’s one-third share.

## Legal Principles

- Trust construction focuses on the settlor’s intent as expressed in the instrument’s text, considered as a whole and in context.
- “Per stirpes” is a term of art that generally refers to distribution by representation through family lines (stocks/branches), rather than equal distribution by headcount at a single generational level.
- When an instrument uses the combined phrase “in equal shares per stirpes,” the “equal shares” language does not automatically convert the scheme to per capita; equality can operate at the branch level and within each branch after the initial stirpital division.
- Differences in wording between provisions within the same trust may show that different distribution methods were intended for different circumstances (for example, income distribution during the trust term versus principal distribution at termination).
- A construction that drains operative effect from express terms (here, “per stirpes”) is disfavored when a reasonable reading gives effect to all words.

## Conclusion

The Fourteenth Court of Appeals held that Article III required distribution of the trust estate “in equal shares per stirpes” by first dividing the remainder into three equal shares corresponding to William Moody’s three children and then dividing each branch’s one-third share among that branch’s descendants, so the probate court’s per-capita distribution among all eight grandchildren was reversed and the case remanded.


Archer v. Moody, 544 S.W.3d 413 (2017)