From: 	"Al Golden" <ajg@ikardgolden.com>
To:	"Bill Pargaman" <BPargaman@mailbmc.com>, "Mike Cenatiempo" <mikecen@cena...
Date: 	10/05/2007 10:26 AM
Subject: 	RE: RE: New Section 114.086 of the Texas Trust Code

I think we need to get our real estate bretheren involved.  

  

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From: Bill Pargaman [mailto:BPargaman@mailbmc.com] 
Sent: Friday, October 05, 2007 10:08 AM
To: Mike Cenatiempo; Shannon Guthrie; Al Golden; Leslie Amann; Glenn Karisch
Subject: Fwd: RE: New Section 114.086 of the Texas Trust Code

No big rush, but I'd be interested if any of you have any thoughts on this, one way or the other.

Bill

>>> On 10/5/2007 at 08:10 AM, "Glenn M. Karisch" <karisch@texasprobate.com> wrote:

Dear Mr. Henry:

Thanks for your thoughtful email.  I am forwarding it to Bill Pargaman, who is chair of the Section's Trust Code Committee.  His committee will consider your concerns and decide if it wishes to recommend a change to the statute as part of REPTL's 2009 legislative package.

Glenn M. Karisch

Barnes & Karisch, P. C.

2901‑D Bee Caves Road

Austin, Texas  78746

(512) 328‑8355  FAX (512) 328‑8413

karisch@texasprobate.com

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From: Herbert W. Henry [mailto:herb1943@sbcglobal.net] 
Sent: Wednesday, October 03, 2007 12:06 PM
To: karisch@texasprobate.com
Subject: New Section 114.086 of the Texas Trust Code

Dear Mr. Karisch:

    It is my understanding that you are the chairman of the Real Estate, Probate, and Trust Law Section of the State Bar of Texas.

    I would like to point out what I believe is a defect in the new Section 114.086 of the Texas Trust Code, entitled Certification of Trust.

    The defect is an error of omission, really.

    Is everyone assuming that a recorded Certification of Trust will be admissible 20 or 30 years from now in a suit involving title to real property?

    For example, suppose:

    1.    Blackacre is conveyed to Fred First Trustee, as Trustee of the XYZ Trust.

    2.    Sam Second Trustee then executes a Certification of Trust containing purported excerpts of a trust amendment removing Fred First Trustee and appointing Sam Second Trustee as the trustee of the trust.

    3.    The Certification of Trust is recorded, and Sam Second Trustee, as Trustee of the XYZ Trust, purports to convey the mineral estate under Blackacre to George Goodfaith.

    4.    20 years later, everything hits the fan when oil is discovered on the adjoining tract.

    In a trespass to try title suit, can George Goodfaith's heirs enter the recorded Certification of Trust into evidence as evidence of the facts therein stated?

    Why would the answer be "yes"?  The Certification of Trust is obviously hearsay.  Does the Section 114.086 create an exception to the hearsay rule?  Not expressly.  At least I can't find it.

    Do we want something this important to rest on implication alone?

    What I am suggesting is that we ought to amend the section by adding language similar to the language in Probate Code Section 52, which creates an exception to the hearsay rule for affidavits of heirship.

    In addition to expressly creating an exception to the hearsay rule, we also need to think about whether or not we should create a presumption that the buyer acted in good faith.  After all, the new certification of trust is helpful to the buyer only if the buyer acts in good faith.  If the land title litigation takes place a generation later, after everyone is dead, how could the persons claiming under the buyer prove good faith?  And without good faith, the certification of trust is of no benefit.

    Without an amendment that (1) expressly creates an exception to the hearsay rule and (2) creates a rebuttable presumption of good faith, we have a title lawyer's nightmare.

    Thank you for your attention to this matter.

    Herbert W. Henry

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Herbert W. Henry
Attorney at Law
P. O. Box 1708
1805 Fifth Street
Bay City, Texas  77404‑1708
Telephone:  979‑245‑6313
Fax:  979‑245‑1087

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