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Trusts

Trust Intent

    Chapman Children’s Trust v. Porter & Hedges, 32 S.W.3d 429 (Tex. App.—Houston [14^th Dist.] 2000, pet denied).

    Claimant asserted that a law firm became the trustee of a trust when it received the proceeds of a settlement of a lawsuit.  Both the trial and appellate courts held that a trust was not created because there was no language in the settlement agreement reflecting an intent to create a trust.  The duties among the parties were contractually based.  A court will not impose a trust where the parties contemplated another relationship.

    Moral:  Courts are unwilling to impose trust duties in a situation where the parties intended another type of legal relationship.