Trusts - Appointment of Receiver

Krumnow v. Krumnow, 174 S.W.3d 820 (Tex. App.—Waco 2005, pet. filed).

A district court appointed a receiver on its own motion, and without notice to the fiduciary holding the property, to swoop in and take control over various properties involved in a will and inter vivos trust dispute. The appellate court determined that the court abused its discretion in issuing this order. The court explained that “[r]eceivership is an extraordinary harsh remedy and one that courts are particularly loathe to utilize.” Krumnow at 828. The court described how both the trust and estate property were currently being managed by a fiduciary and thus there was no great emergency or imperious necessity for a receiver. The status of the property could be maintained by a less drastic remedy such as a restraining order or temporary injunction.

Moral: The appointment of a receiver is justified only in extreme cases where this remedy appears to be the only way to preserve or protect the property in litigation.