Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:Ugo Di Portanova is the 68-year-old grandson of H.R. and Lillie Cullen. Ugo is partially incapacitated and has lived with Annunziata and Umberto LaMatta since 1974. In 1998, Mrs. LaMatta was appointed as guardian of Ugo’s person. Richard Monroe (the guardian) is the guardian of Ugo’s estate. Paul Piero Di Portanova and Antonella Apuzzo Di Portanova (the Di Portanovas) are Ugo’s half-brother and half-sister. They share the same father � Paolo Di Portanova, but Ugo’s mother is Lillie Cullen Di Portanova, the daughter of H.R. and Lillie Cullen, and the Di Portanovas’ mother is D’Alesandro Filament, a woman from Naples, Italy. Max Butler, Robert Hux, and Robert A. Higley (the trustees) are co-trustees of the H.R. Cullen and Lillie C. Cullen New Louisiana Trust, a trust established by the Cullens in their wills for the benefit of their grandson, Ugo. On Sept. 20, 2003, the guardian of Ugo’s estate filed an “Application to Make Tax-Motivated Gifts for the Benefit of Annunziata LaMatta and Family,” in which he sought to use more than $5 million from the New Louisiana Trust to fund a new trust to be established for the benefit of Annunziata LaMatta and her family. The guardian also requested that the taxes on the proposed $5 million gift be paid out of the New Louisiana Trust, for a total dispersal by the trust of approximately $6.6 million. If the proposed gift to LaMatta were approved, approximately $2.9 million would remain in the New Louisiana Trust. At the same time he filed the above-referenced application, the guardian also filed this declaratory judgment action. In the guardian’s first amended original petition for declaratory judgment, he requested a judgment declaring that: “the Wills and First Codicils of both H.R. and Lillie C. Cullen permit and/or authorize the distribution of income and corpus from the H.R. Cullen and Lillie C. Cullen New Louisiana Trust for Ugo Di Portanova by the Co-Trustees to Petitioner, for funding purposes, to Annunziata LaMatta or Umberto LaMatta for annual exclusion gifts, to a trust for the LaMatta Family and to pay federal gift taxes due on such gifts.” On Aug. 10, 2004, the trial court denied the motions for partial summary judgment filed by the Di Portanovas and the Trustees and granted the motion for partial summary judgment filed by the guardian. The guardian then moved for summary judgment, contending that the terms of the trust would support the dispersal of trust funds to the proposed LaMatta Trust because such a dispersal would be in Ugo’s best interest. The guardian also asked for entry of a final declaratory judgment in his favor. On Nov. 23, 2004, the trial court signed a final declaratory judgment, in which the trial court declared that the Cullens’ wills and codicils authorized the Trustees to make the proposed gifts to the LaMattas, including the payment of the federal gift taxes owing thereon. The final judgment also declared that the guardian had not violated the in terrorem clauses by filing the petition for declaratory judgment, participating in the proceedings, or filing the application to make tax-motivated gifts for the benefit of the LaMatta family. HOLDING:Affirmed. The trial court’s declaration that the trustees were authorized to make the proposed disbursement to the LaMattas resolves in the affirmative the underlying issue of whether the proposed disbursement would serve Ugo’s best interest. However, in this discretionary trust, the trustees, not the court, are given the power to determine the best interest of the beneficiary. A court cannot substitute its discretion for that of a trustee, and can interfere with the exercise of discretionary powers only in cases of fraud, misconduct, or clear abuse of discretion. The court concludes that the ultimate issue decided by the trial court � whether Ugo’s best interest would be served by funding the proposed LaMatta trust � did not present a justiciable controversy for the trial court to resolve because the issue should have been left to the Trustees’ discretion. In determining whether a beneficiary has violated an in terrorem clause, the court strictly construes the clause. Texas courts have routinely held that actions that do not seek to alter the terms of the will do not violate in terrorem clauses. the guardian sought a declaration that the trustees had the power, or were authorized, to make the proposed gift to the LaMatta’s trust from the corpus of the New Louisiana Trust. He did not, as the Di Portanovas argue, seek to change the beneficiary of the New Louisiana Trust, which would at all times be Ugo. The guardian merely sought a declaration that the trustees were authorized to fund the proposed gift to the LaMattas. This request for declaratory relief did not present a justiciable issue for the trial court because it infringed on the discretion given solely to the trustees, and the guardian’s request did not seek to modify, vary, set aside, or nullify the terms of the Cullens’ codicils. The codicils authorize the Trustees to disperse the corpus of the trust if, in their discretion, it would be in Ugo’s best interest for them to do so. The guardian’s request for declaratory relief, though improperly presented to the trial court, did not seek to alter, but to clarify this authority. The trial court’s declaration that the in terrorem clauses were not violated is not error, the court decides. OPINION:Sherry Radack, C.J.; Radack, C.J., Taft and Nuchia, J.J.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.