## Facts

- In 1990, Woodrow V. Lesikar created a revocable inter vivos family trust, naming himself and his son as co-trustees, and placed 10,000 shares of closely held corporation stock (airport stock) into the trust.
- The trust provided the settlor would receive all net income during his lifetime and reserved to him the power to revoke or amend by written notice to the trustee.
- The trust contemplated distribution at the settlor’s death through separate “special trusts” for family members; as originally drafted, the airport stock was specifically allocated to the son’s special trust.
- In 1998, the settlor executed a new trust instrument effective at the end of 1997 stating it “modifies, amends and supersedes” prior instruments; it did not specifically mention the airport stock and provided for division of residuary property between the son and daughter.
- After the amended instrument took effect, the settlor caused the airport stock—valued near $200,000—to be transferred out of the family trust to a separate trust benefiting the son’s children, in exchange for $2,000 paid by the son.
- The daughter sued the son and related parties, alleging the stock transfer was wrongful (including grossly inadequate consideration) and violated trust terms and fiduciary duties.
- The trial court granted summary judgment against the daughter on claims tied to the stock transfer, and she appealed.

## Issues

1. Whether a contingent beneficiary of a revocable inter vivos trust has standing to challenge the settlor’s transfer of trust property during the settlor’s lifetime.
2. Whether the settlor’s transfer of the stock out of the trust was an invalid amendment or revocation for failure to comply with the trust’s written-notice requirements.
3. Whether the daughter could maintain breach-of-fiduciary-duty claims against the son based on the stock transfer directed and approved by the settlor.

## Decision

- The court of appeals affirmed summary judgment for the defendants.
- The court held the daughter, as a contingent beneficiary of a revocable trust during the settlor’s lifetime, had no vested interest in the stock and therefore lacked standing to challenge the settlor’s lifetime disposition of it.
- Because she lacked standing, she could not pursue claims premised on alleged noncompliance with amendment/revocation formalities regarding the stock transfer.
- The court also rejected fiduciary-duty theories tied to the transfer because, while the trust was revocable and the settlor retained control, trustees’ enforceable duties regarding such transactions ran primarily to the settlor rather than to contingent beneficiaries.

## Legal Principles

- Beneficiaries of a revocable trust generally hold only an expectancy during the settlor’s lifetime; their interests are subordinate to the settlor’s retained power to revoke, amend, and control trust property.
- A contingent beneficiary of a revocable trust lacks standing to complain of the settlor’s lifetime acts disposing of trust assets, including transfers removing property from the trust.
- When a settlor retains dominion and directs a transaction involving revocable-trust property, contingent beneficiaries typically cannot enforce fiduciary-duty claims against trustees for carrying out the settlor’s instructions with respect to that property.

## Conclusion

The court affirmed summary judgment because the plaintiff’s interest in the revocable trust was contingent during the settlor’s life, leaving her without standing to contest the settlor’s transfer of stock out of the trust or to base fiduciary-duty and related claims on that lifetime disposition.


Moon v. Lesikar, 230 S.W.3d 800 (Tex. App.—Houston [14th Dist.] 2007, pet. denied)