Effective Trust Administration

Even in the case of simple estate planning, more and more individuals are utilizing the safety and flexibility of trusts in order to accomplish their goals. Marital, bypass and contingent trusts, just to name a few, are becoming more prevalent in wills and routine estate planning ever day. These tools can sometimes offer very attractive results, such as greater control, tax savings or creditor protection. They also often require maintenance and guidance long after the terms are written. Spouses, children and even trusted friends can easily find themselves named as trustees, with little to no understanding of the rights, obligations and liabilities that come with the job.

In the simple case of a married couple with two young children, the couple’s Wills might direct that the Estate of the surviving spouse pass into trust for the kids at his or her death. The Will might appoint the husband’s brother as Trustee, with instructions to hold and manage the property until the children reach the age of 30, at which time they will receive it with no strings attached. Perhaps the good uncle is authorized to make distributions from the Trust to the children, until they turn 30, for their health, education, maintenance and support, as he deems fit in his discretion.

Does the uncle owe the children any legal duties? Must he keep the current property, or can he invest it differently? Do the children have a right to complain if the uncle invests the Trust property unwisely? Can the uncle send the good child to Harvard, leaving the prodigal one only enough funds to attend the local community college? These are questions that linger long after mom and dad came into to plan and draft their Wills, and the legal relationship between the uncle and the children invokes decades of developed fiduciary law in Texas.

Well-drafted Wills and Trusts will expressly outline a Trustee’s duties and responsibilities. Even where these terms are absent, the Texas Trust Code fills most of the gaps. At a minimum, our uncle will owe his niece and nephew specific duties of loyalty, reasonable care, impartiality and full disclosure. The children may have the right to demand an accounting from the uncle to better understand his administration. All three might even collectively agree to terminate the trust before the children turn 30.

Trusts are as unique as the individuals for whom they are drafted. However, many of the common principles, rights and obligations of effective trust administration apply regardless of the language used. Beneficiaries should be well-advised of their rights and the limits of their ability to compel a trustee to act. Trustees, likewise, should be well-advised of how to administer the Trust competently, effectively and within the scope of the fiduciary laws of Texas.

I Do?

Recently on a local news broadcast, I overheard the anchor comment on Houston’s own Chuck Knoblauch and his current legal troubles. What bothered me was not Chuck’s run-ins with the law, but the apparent lack of understanding demonstrated by the anchor. While commenting on Chuck’s on-going divorce, the Anchor noted that while Mr. And Mrs. Knoblauch were only common-law married, they were “still” going through divorce proceedings. This provided me a perfect chance to address a commonly misunderstood issue, Common-law marriage.

Right off the bat I think it’s important for us to define the term “common-law marriage.” Common-law Marriage is a marriage arrangement between a man and a woman without the formalities of the issuance of a license nor an official or ministerial ceremony. The courts of Texas have recognized common-law marriage as valid marriages for decades. Couples entering into common-law marriages are legally entitled to all the same property rights that attach to formal marriages.

Now that we know what Common-law Marriage is, we can focus on what it isn’t. I cannot tell you how many times I have had friends or acquaintances say to me that so-and-so has lived with his girlfriend for a couple of years now so “technically they are common-law married I guess.” I would say if there is one common misconception regarding common-law marriage, it’s that there is a time element involved. However, there is actually no time element involved at all. That’s right, you can live with your significant other for as little as one day and be considered common-law married.

 By now most of the single guys out there reading this are probably freaking out, however it is equally important to note that while living together is a requirement for establishment of common-law marriage, it is by no means exclusive. Equally important are the elements of an agreement to become husband and wife; and holding out to the public as husband and wife. Simply stated, the three elements of a common-law marriage are: (1) you have an agreement to be married; (2) after the agreement, you live together in Texas as husband and wife; and (3) you represent to others in Texas that you are married. The agreement to be married and the public and open holding out that you are husband and wife are as essential to a valid common-law marriage as the living together. Without these elements, there is no common-law marriage. Therefore, despite most single guys fears, you will never find yourself unknowingly common-law married since secrecy is inconsistent with the requirement that a couple hold themselves out to be living together as husband and wife.

So, as you can see, even living together for a single day will sustain a finding of common-law marriage as long as it was done under an agreement to be married and you made that fact known to the general public. All three elements must exist at the same time for a common-law marriage, and it does not exist until the concurrence of all three elements. Thus, merely living together is not enough to establish a common-law marriage. Similarly, just agreeing to be husband and wife, without living together, does not constitute a valid marriage.

Now then, the question becomes, and the part that apparently confused our local newscaster, does one have to go through a formal divorce to get out of an informal marriage? The answer is a resounding yes. There is no such thing as common-law divorce. Just as you share all the rights of a formal marriage, so must you share all the burdens regarding dissolving such a marriage.

Common-law marriage arises out of a state of facts, but once common-law status exists, it, like any other marriage, may be terminated only by death or court decree, and the spouses’ subsequent denials of the marriage, if disbelieved do not undo the marriage. Thus, common-law marriage can be terminated only by death, formal divorce, or a formal annulment.

So, as you can see, while common-law marriage is fairly simple to enter into, it is not so simple that you would find yourself married without your knowledge. Likewise, it is not so simple that it doesn’t require a formal divorce proceeding, such as the one in which Chuck Knoblauch currently find himself. Unlike how the newscaster couched it, such a proceeding is not just an overly cautious move by the Knoblauchs, it is a legal requirement for the dissolution of such a marriage.

Hopefully this will serve to clear up some of the confusion regarding common-law marriage. This might also be a good time to point out that bigamy is a crime in Texas, so if upon reading this you realize that you were at one time common-law married to someone that is not your current spouse, you might want to place a call to a friendly divorce attorney. Or just give us a call, we’ll point you in the right direction.