## Facts

- W.E. Marshall and Viola Walker Marshall married in 1905 and acquired 760 shares of Franklin Life Insurance Company stock as virtually the entire community estate.
- On August 23, 1960, without Viola’s knowledge, W.E. executed a revocable trust and transferred the stock to their daughter, Erie Darnall Land, as trustee; the shares were re-registered in the trustee’s name and delivered to her.
- W.E. retained extensive powers, including control over sales and reinvestment and the ability to consume or dispose of trust corpus.
- In practice, W.E. continued to receive dividends and proceeds from trustee sales made at his direction.
- The trust provided that W.E. and Viola would benefit during their lifetimes, and that after both deaths any remaining corpus would pass to their granddaughter, Linda Darnall Land.
- By W.E.’s death on August 4, 1965, stock splits and dividends increased the trust holdings to 2,562 shares valued at $99,587.75 at the time of death.
- Viola learned of the trust only about three weeks before W.E.’s death; after his death she refused distributions and asserted her community property rights.

## Issues

1. Whether a husband, as statutory manager of community property, may unilaterally transfer community assets into a revocable trust without the wife’s knowledge or consent.
2. Whether such a trust can validly dispose of the wife’s vested one-half community interest in remainder to a third party after the spouses’ deaths.
3. Whether the wife’s lack of knowledge and refusal to accept benefits precluded ratification or estoppel.

## Decision

- The Supreme Court of Texas held the trust was not void merely because community property was transferred into a revocable trust and legal title was placed in the trustee.
- The court held the trust was ineffective to the extent it attempted to dispose of Viola’s vested one-half community interest in remainder to the granddaughter without Viola’s consent.
- The court affirmed relief awarding Viola title to an undivided one-half interest in the stock; the trust remained effective as to W.E.’s one-half interest.
- The court rejected ratification or estoppel because Viola lacked timely knowledge of the trust and refused benefits after learning of it.

## Legal Principles

- A managing spouse may create an express revocable trust of community property and transfer legal title to a trustee under Texas trust law.
- The non-managing spouse holds a present, vested one-half interest in community property that cannot be destroyed or effectively devised away by the managing spouse’s unilateral inter vivos arrangement.
- A trust device that functions to divert the non-consenting spouse’s one-half remainder interest to third parties is ineffective as to that spouse’s share.
- Ratification or estoppel requires knowledge and conduct indicating acceptance; prompt refusal of benefits after learning of the transaction defeats those defenses on an undisputed record.

## Conclusion

A husband’s statutory management powers permit placing community assets in a revocable trust, but they do not authorize an unilateral, effectively testamentary disposition of the wife’s vested one-half community interest; the wife retains title to her undivided one-half share, including the remainder.


Land v. Marshall, 426 S.W.2d 841 (Tex. 1968)