## Facts

- Louise M. Cozby’s will named Frost National Bank of San Antonio as independent executor and trustee and created a residuary testamentary trust.
- The trust was to begin after estate administration (or earlier at the bank’s election) and continue until the death of the last survivor of three named beneficiaries: Rexford S. Cozby, Karolen Newton, and Louise Purvis.
- The will granted the trustee a limited, discretionary power to terminate the trust earlier if trust income ceased to be sufficient to justify continuing the trust, in the trustee’s opinion.
- The trust’s benefits included paying for the support and education of two great-nieces and a great-nephew through college, plus a $1,000 bonus upon obtaining a degree, and then holding and distributing the remainder as directed at the trust’s stated termination.
- Rexford S. Cozby predeceased the testatrix; the bank administered the estate, funded the trust, and paid the education expenses and bonuses.
- After the last educational bonus was paid, the bank filed a declaratory judgment action seeking a determination whether the trust should terminate or continue under the will’s duration clause.
- Newton, Purvis, and related beneficiaries consented to termination and immediate distribution.
- The trial court found the trust had sufficient property to justify continuance but concluded the trust’s “primary purpose” was fulfilled and ordered termination; the court of appeals affirmed.

## Issues

1. Whether a court may terminate a testamentary trust before the termination date fixed in the instrument based on beneficiaries’ consent and fulfillment of asserted “primary purposes,” where the instrument provides a specific duration and a limited discretionary early-termination condition that was not satisfied.

## Decision

- The Texas Supreme Court reversed the judgments terminating the trust.
- The court held the trust could not be terminated before the death of the last survivor of the three named beneficiaries, as expressly provided in the will.
- The trustee’s early-termination authority was limited to the condition that trust income become insufficient to justify continuation, in the trustee’s opinion.
- Because the insufficiency condition was not met (and the trial court found the trust had enough property to justify continuance), the trust had to continue under its terms.

## Legal Principles

- A testator’s intent, determined from the instrument as a whole, controls if not contrary to law or public policy.
- When a trust instrument clearly fixes duration and termination conditions, courts may not alter those terms based solely on convenience, beneficiary preference, or a view that some purposes have been completed.
- A narrowly defined discretionary termination power granted to a trustee cannot be expanded by courts or beneficiaries beyond the condition stated in the instrument.
- Completion of one set of trust benefits (such as education payments) does not negate other expressed purposes, including continued management and delayed distribution until the stated termination event.

## Conclusion

The court required the testamentary trust to continue until the termination event specified in the will because the instrument’s duration clause was unambiguous and the trustee’s limited early-termination condition—insufficient income to justify continuing the trust—was not shown to exist or to have been invoked.


Frost Nat’l Bank of San Antonio v. Newton, 554 S.W.2d 149 (Tex. 1977)