When a loved one passes away, their carefully crafted estate plan should provide clear direction for distributing their assets. But what happens when the beneficiaries named in a will no longer exist by the time of death? This seemingly straightforward question becomes complex when dealing with trusts that terminated decades before the testator’s passing, yet may have been replaced or extended under new agreements.
Consider the common scenario where parents create trusts for their children, designed to terminate when the beneficiaries reach a certain age. Years later, one child drafts a will leaving assets to their siblings’ trusts. If those trusts have long since terminated by the time of death, who inherits? Does the bequest fail entirely, or can successor trusts with the same names receive the inheritance?
The recent case of Estate of Charles Edward Long, No. 06-24-00064-CV, 2025 WL 1233212 (Tex. App.—Texarkana April 29, 2025), provides an opportunity to consider how Texas courts interpret wills that name specific trusts as beneficiaries when those trusts no longer exist at the time of death.
Facts & Procedural History
In the 1950s, H.L. Long and his wife Bettye established four trusts. They created one for each of their sons: Charles (the decedent), Larry, Allan, and Stephen. Each trust contained provisions stating they would terminate when the beneficiary reached thirty years old. The decedent drafted his will in 1976 at age twenty-seven while going through divorce proceedings. His daughter Barbara had been born in 1972.
The decedent’s will contained a residuary clause in Section IV. It left the remainder of his estate “in equal shares unto the H. L. LONG, LAWRENCE ALLEN LONG, JOHN [STEPHEN] LONG, and LARRY THOMAS LONG TRUSTS so long as the beneficiaries for whom those trusts are named survive me.” The will further provided that if any beneficiary predeceased him, that share would go to his mother if living. Otherwise it would go to the surviving brothers’ trusts.
When the decedent died on January 3, 2020, his brother Larry submitted the will to probate. The court appointed him independent executor. The daughter initially filed a petition challenging the will’s validity. She claimed it had been revoked or was the product of undue influence. She later amended her petition to include an alternative argument. If the will was valid, she argued she should inherit the residuary estate through intestacy because the trusts named in the will no longer existed.
The brothers argued that although the original 1950s trusts had terminated when they turned thirty, new trusts had been created. Alternatively, they claimed the original trusts had been extended through agreements. They maintained these successor trusts should receive the residuary estate. Both parties filed cross-motions for summary judgment on whether the residuary clause had lapsed.
The trial court granted summary judgment for the daughter. The court found that the bequests to the trusts had lapsed and the residuary estate passed through intestacy. After determining the daughter was the decedent’s sole heir, the court entered a final judgment. The brothers appealed.
Understanding Bequests to Trusts Under Texas Law
The Texas Estates Code specifically addresses when property can be devised to trusts. Section 254.001(a) allows a testator to devise property to the trustee of a trust that exists during the testator’s lifetime. It also permits devises to trusts that will be established at death. The statute permits bequests to trusts created by the testator, jointly with another person, or by another person entirely. This includes both funded and unfunded trusts.
For trusts established at death, the code requires specific conditions. The trust must be identified in the will. Its terms must be contained in a written instrument executed before, with, or after the will’s execution. The code even allows devises to trusts created in another person’s will if that person predeceased the testator.
This statutory framework provides flexibility for estate planning. A testator can leave assets to existing trusts or to trusts that will come into existence later. The key requirement is proper identification of the trust in the will. The trust’s terms must also be properly documented.
What Happens When Named Trusts No Longer Exist?
The fundamental principle of will construction in Texas requires courts to determine the testator’s intent. They do this by examining the language within the four corners of the document. Courts focus on the meaning of the words actually used. They don’t speculate about what the testator might have intended to write. When a will’s language can be given a definite legal meaning, it is unambiguous. Courts must then construe it as a matter of law.
Texas courts have long held that extrinsic evidence cannot be used to vary the terms of an unambiguous will. Courts may consider evidence about the testator’s circumstances and the situation when the will was executed. But this broader approach only applies when terms are open to multiple constructions. For unambiguous language, the plain meaning controls.
When a will makes a bequest to a specifically identified trust that no longer exists at the testator’s death, the bequest typically lapses. This occurs because there is no beneficiary capable of receiving the gift. The lapsed bequest then falls into the residuary estate. If it is the residuary bequest itself that lapses, the property passes through intestacy to the testator’s heirs-at-law.
Does Intent to Benefit Successor Trusts Matter?
The brothers in Long raised an interesting argument about successor trusts. They contended that the original 1950s trusts had terminated by their express terms when each brother turned thirty. But they argued new trusts had been created or the original trusts had been extended through agreements. These successor arrangements bore the same names as the original trusts.
This raises a fundamental question. When a will names a specific trust as beneficiary, can a successor trust with the same name step into its shoes? The answer depends on how the will identifies the beneficiary trust. If the will clearly identifies specific trusts already in existence, courts might not look beyond that identification. They might not consider whether the testator might have intended to include successor trusts.
The Court of Appeals examined the specific language used in the decedent’s will. Section IV explicitly referenced “the CHARLES EDWARD LONG TRUST, made and entered into the 15th day of October, 1957, by and between H. L. LONG and BETTY[E] VIRGINIA LONG, together with any and all amendments thereto.” This language specifically identified the original 1950s trust. It named the creation date and parties. So the transfers lapsed.
The Takeaway
The Long case highlights the importance of careful drafting when naming trusts as beneficiaries. Estate planners have to consider whether the named trusts will still exist at the testator’s death. This is particularly important with trusts designed to terminate at specific ages or upon certain events.
A testator who wants to benefit whatever trust arrangement exists for certain beneficiaries at death should use broader language. Instead of naming specific trusts with creation dates, the will could refer to “any trust then existing for the benefit of” the intended recipients. The will could also include provisions for substitute beneficiaries if the named trusts no longer exist.
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The content of this website is for informational purposes only and should not be construed as legal advice. The information presented may not apply to your situation and should not be acted upon without consulting a qualified probate attorney. We encourage you to seek the advice of a competent attorney with any legal questions you may have.
