A Texas appeals court finds that a declaratory judgment is not appropriate in a case involving a transfer of funds from a trust because the trustees have discretion to authorize such transfers, not the court.
Ugo Di Portanova is partially incapacitated. His grandparents' wills created a trust for his benefit. The trust provided that the trustee had discretion to distribute a portion of the trust estate if it was in Mr. Di Portanova's best interest.
The guardian of Mr. Di Portanova's estate filed an application to move money from Mr. Di Portanova's trust into another trust to benefit the guardian of Mr. Di Portanova's person. The guardian also filed a declaratory judgment action with the trial court, requesting a judgment that Mr. Di Portanova's grandparents' wills authorized such a gift. The trustees claimed there was no question of material fact to be decided in the declaratory judgment action because the trustees used their discretion to decide not to fund the new trust. The court found that the wills authorized the proposed gifts and issued a declaratory judgment, and the trustees appealed.
The Court of Appeals for Texas reverses, finding that no justiciable controversy exists because the decision should have been left to the trustees' discretion. According to the court, the ultimate issue decided by the trial court was whether the gift is in Mr. Di Portanova's best interest, and that decision is solely within the discretion of the trustees.
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