Case Title: Matter of Estate of Lohrie

Citation: 

Docket Number: 97-112

State: wyoming

Court: Wyoming Supreme Court

Date: 1997-12-22T00:00:00Z

Document:
Matter of Estate of Lohrie1997 WY 158950 P.2d 1030Case Number: 97-112Decided: 12/22/1997Supreme Court of Wyoming

In 
the Matter of the ESTATE OF Alexander LOHRIE, Deceased.

 

Appeal 
from The District Court of Laramie County

 The 
Honorable Nicholas G. Kalokathis, Judge

 

William D. Bagley, Cheyenne, for Beverly Joan 
Copeland.

 Gregory C. 
Dyekman and Brandin Hay of Dray, Thomson & Dyekman, P.C., Cheyenne, 
for 
Vera E. Hjelm.

 

Before 
TAYLOR, C.J., and THOMAS, MACY, GOLDEN and LEHMAN, 
JJ.

GOLDEN, Justice. 

[¶1]      The personal 
representative for the estate of Alexander Lohrie petitioned the district court 
for an order of distribution for property named in the Alexander and Marguerite 
Lohrie Revocable Trust and in the Last Will and Testament of Alexander Lohrie. 
Appellant Beverly Joan Copeland was a devisee to a house under the will. 
Appellee Vera E. Hjelm was the sole beneficiary of that same house under the 
trust. The district court held that the will and the trust were inconsistent, 
the will did not revoke the trust, the house belonged to the trust, and it 
should be given to Hjelm as directed by the trust. The district court dissolved 
the trust and vested Hjelm with sole title to the house. Copeland 
appeals.

 

[¶2]      We 
affirm.

 

ISSUES

 

[¶3]      Copeland provides 
this issue for our review:

 

Is the clear intent of the 1995 Will of the deceased 
frustrated by a prior contrary provision in his Revocable 
Trust?

 

[¶4]      Hjelm contends 
that Copeland's arguments result in the following issues requiring 
review:

 

I. Was the district court correct in finding that 
Alexander and Marguerite Lohrie effectively conveyed their interest in real 
property located at 908 Stevens Drive, Cheyenne, Laramie County, Wyoming to the 
Alexander and Marguerite Lohrie Revocable Trust?

 

II. Was the district court correct in finding that 
Alexander Lohrie's January 5, 1995 Last Will and Testament did not revoke the 
Alexander and Marguerite Lohrie Revocable Trust?

 

III. Did the Alexander and Marguerite Lohrie 
Revocable Trust fail for want of a successor trustee?

 

IV. As a matter of Wyoming law, are revocable trusts 
(rendered irrevocable upon the death of the grantor) 
enforceable?

 

FACTS

 

[¶5]      Lohrie and his 
wife, Marguerite, established the Alexander and Marguerite Lohrie Revocable 
Trust with Alexander Lohrie as Trustee on December 23, 1983. The trust provided 
that it could be revoked at any time during the lifetime of the last of the 
settlors to die as long as the revocation was in writing and delivered to the 
trustee. The trust contained two assets, a house at 311 Vaughn Court in Cheyenne 
and a house located on 908 Stevens Avenue in Cheyenne. Mrs. Lohrie died on 
August 23, 1986. On November 3, 1987, Lohrie amended the trust and named 
Copeland as the primary beneficiary of the trust if she survived Lohrie. On June 
9, 1988, Lohrie amended the trust again naming the First Wyoming Bank, later 
known as Key Bank, as successor trustee. On August 22, 1988, Lohrie amended the 
trust for the third time, providing that Copeland would still be the primary 
beneficiary if she were not married to someone else at the time of Lohrie's 
death.

 

[¶6]      Lohrie executed a 
fourth amendment to the trust on December 20, 1989, providing that the successor 
trustee was to distribute a house at 311 Vaughn Court in 
Cheyenne

 

to Beverly Joan Copeland for life (a legal life 
estate), with remainder over to those of her children who survive Alexander 
Lohrie. If Beverly Joan Copeland does not survive Alexander Lohrie, then 
Successor Trustee shall distribute said real estate, in equal shares, share and 
share alike, to those children of Beverly Joan Copeland who survive Alexander 
Lohrie.

 

The fourth amendment also 
provided that the successor trustee distribute the rest and remainder to Vera E. 
Hjelm. Lohrie later sold the house at 311 Vaughn Court.

 

[¶7]      On January 5, 
1995, Lohrie executed a last will and testament. It provided in part as 
follows:

 

I 
direct that my house at 908 Stevens Drive, Cheyenne, Wyoming, be sold along with 
the contents not devised elsewhere in this Will. The proceeds from said house 
and said contents shall pass in equal shares to my friend Jody Copeland, of 2400 
Missile Drive, Cheyenne, Wyoming, and my friend Vera E. Hjelm of 224 Prospect 
Land, Apartment 8, Billings, Montana, or the survivor of 
them.

 

Lohrie died on April 13, 
1996. Hjelm claimed that the house at 908 Stevens Drive should be distributed 
according to the trust, not the will, because Lohrie never revoked the trust. 
Copeland claimed that the will revoked the trust so the house should be 
distributed according to the will or, in the alternative, that the trust was 
invalid because the named successor trustee refused to accept and because the 
house was not properly deeded to the trust.

 

[¶8]      Lohrie's personal 
representative petitioned the court for a declaration concerning the 
distribution of the property, and a hearing was held. The attorney who drafted 
the 1995 will testified at the hearing that Lohrie had told him of the trust but 
refused to let him see it. He drafted the will's provisions distributing the 
house upon the instructions of Lohrie. The court determined that the will and 
the trust were inconsistent, and the issue before it was whether Lohrie 
effectively revoked the trust. Finding that a will can revoke a trust under 
specific circumstances, the court ruled that none of those circumstances were 
present in this case, and the trust controlled distribution of the house because 
of the inconsistency. It held the house belonged to the trust and was to be 
distributed to Hjelm, and because the purpose of the trust was fulfilled, the 
court dissolved the trust and vested Hjelm with title to the house. This appeal 
followed.

 

DISCUSSION

 

Standard of Review

 

[¶9]      The parties agree 
that the district court's order set out correct findings of fact, and Copeland 
appeals from the district court's conclusions of law. The district court's 
conclusions of law are affirmed if in accordance with law, but are corrected if 
not in accordance with law. Matter of 
Estate of Jackson, 892 P.2d 786, 788 (Wyo. 1995).

 

Validity of Trust

 

[¶10]   Copeland begins by contending that 
Wyoming has never recognized the validity of revocable trusts and should not do 
so. An inter vivos trust is a trust created by the grantor during the grantor's 
lifetime to go into effect during the grantor's lifetime. Soltis v. First of America 
Bank-Muskegon, 203 Mich. App. 435, 513 N.W.2d 148, 150 (1994) (citing 76 
AM.JUR.2D Trusts § 11 at 41). In 
contrast, a testamentary trust is a trust contained in a will, which goes into 
effect at the testator's death. Id. The elements of a valid trust are a 
competent settlor and trustee, the settlor's intent to create a trust, 
ascertainable trust res, sufficiently ascertainable beneficiary or 
beneficiaries, a legal purpose and a legal term. Hilbert v. Benson, 917 P.2d 1152, 1157 
(Wyo. 1996). We have defined a trust as follows:

 

[A] trust is a fiduciary relationship in which one 
person is the holder of the title to property subject to an equitable obligation 
to keep or use the property for the benefit of another. . . . "A trust is an 
obligation imposed, either expressly or by implication of law, whereby the 
obligor is bound to deal with property over which he has control for the benefit 
of certain persons, of whom he may himself be one, and any one of whom may 
enforce the obligation."

 

Scotti's Drive In Restaurants, Inc. v. Mile High-Dart 
In Corp., 526 P.2d 1193, 1196-97 
(Wyo. 1974) (citing Bogert, Law of Trusts, § 1 (5th Ed.); quoting 15 Law Q.Rev. 
301).

 

[¶11]   Copeland contends that the 
revocable trust does not qualify as a trust under these definitions because it 
does not bind the holder or trustee for the benefit of another, no intended 
beneficiary has the power to enforce the obligation of the trustee, and there is 
no fiduciary relationship between the beneficiaries and the trustee. Upon 
Lohrie's death, his revocable trust became irrevocable. This Court has construed 
and given effect to revocable trusts after the death of the settlor made them 
irrevocable in First National Bank & 
Trust Co. of Wyoming v. Brimmer, 504 P.2d 1367 (Wyo. 1973), and Hronek v. St. Joseph's Children's 
Home, 866 P.2d 1305, 1307 (Wyo. 1994), and Copeland does not dispute that 
this trust satisfies the elements of a valid inter vivos trust. Hilbert, 917 P.2d  at 1157. Additionally, 
the district court enforced the express terms of the trust to the benefit of the 
named beneficiary, Hjelm, contrary to Copeland's argument. Her arguments against 
revocable trusts listed above are not applicable to this particular case and 
need not be addressed.

 

[¶12]   Next, Copeland contends that the 
Session Laws of Wyoming, 1947, Chapter 154, which are now WYO. STAT. §§ 34-2-122 
and 123, amended in 1992, required the deed from Alexander and Marguerite Lohrie 
to their trust to identify the trustee and beneficiaries by name and include the 
date of the trust's creation. Chapter 154 states:

 

AN ACT for the protection of those dealing with 
trustees, agents and representatives; prescribing authority of trustees, agents 
and representatives where trust provisions are not set forth or beneficiaries 
are not named in the instrument of conveyance to such trustee, agent or 
representative and providing that any such existing or past conveyance shall not 
be notice unless related, sworn statement is filed within ten 
years.

 

* 
* *

 

Instruments of Conveyance - Requirements 
for.

 

Section 
1. In all instruments conveying real 
estate, or interests therein, in which the grantee is described as trustee, 
agent, or as in any other representative capacity, such instruments of 
conveyance shall also name the beneficiary or beneficiaries so represented and 
define the trust or other agreement under which the grantee is acting, or shall 
refer by proper description of the affecting record book, page, document number 
or file, to the instrument, order, decree or other writing, which is of public 
record in the county in which the land so conveyed is located and in which such 
related matters appear; otherwise the description of a grantee in any 
representative capacity as aforesaid in each such instrument of conveyance shall 
be considered and held to be a description of the person, only, and shall not be 
notice of any trust, agency or other representative capacity of such grantee who 
shall be held as vested with the power to personally convey, transfer, encumber 
or release the affected title and whenever he, she or it shall execute and 
deliver a conveyance, transfer, encumbrance or release of such property in such 
representative capacity, such shall not thereafter be questioned by anyone 
claiming as a beneficiary under such trust or agency or by anyone claiming by, 
through or under any undisclosed beneficiary, provided that none of the trust 
property in the name of such trustee, agent or representative and owned only as 
such, shall be liable for his, her or its personal 
obligations.

 

Grantee, 
Beneficiary or Beneficiaries.

 

Section 
2. At the expiration of ten years 
after this Act becomes effective, all instruments of conveyance to, or transfer, 
encumbrance or release of, lands or any interest therein within the State of 
Wyoming, which name a grantee in such representative capacity, and fail to name 
the affected beneficiary or beneficiaries or to define the trust or other 
agreement . . . shall cease to be notice of any trust. . . 
.

 

1947 Wyo. Sess. Laws Ch. 
154.

 

[¶13]   Hjelm contends that this law was 
enacted to address attempts during the Depression era where persons attempted to 
cloud title to real property in order to defeat creditors' claims. Referring to 
Annotation, 137 A.L.R. 460 (1947), she explains that debtors would convey 
property to individuals in trust without describing the trust, which usually did 
not in fact exist. This law was passed to require that trusts be described in 
deed, but she contends that it does not invalidate a conveyance, but acts to 
deprive a non-complying deed of the effect of constructive notice to third 
parties. 

 

[¶14]   The warranty deed conveyed property 
from Alexander Lohrie and Marguerite Lohrie, Husband and Wife, grantors, to the 
Alexander and Marguerite Lohrie Revocable Trust, grantee. It states that the 
trust was executed that same day. The deed complies with the plain requirement 
of the statute because the statute requires the deed name the beneficiaries only 
when the grantee is a trustee or other individual agent. In this case, there is 
no requirement to name the beneficiaries. Copeland does not provide any 
authority that our plain reading of the statute is not correct, and we, 
therefore, agree with Hjelm that Copeland misreads the statute. The trial 
court's ruling that the deed properly conveyed the property to the trust is 
affirmed.

 

[¶15]   Copeland also contends that the 
trust fails for lack of a successor trustee or provision for appointment of a 
successor trustee. This argument is without merit since our rule is that a trust 
will not fail for lack of a trustee. Rodin v. State ex rel. City of Cheyenne, 
417 P.2d 180, 199 (Wyo. 1966); Kerper v. 
Kerper, 780 P.2d 923, 939 (Wyo. 1989), appeal after remand, 819 P.2d 407 (Wyo. 
1991). Copeland offers no argument that this rule does not apply to a successor 
trustee; we see no reason why it would not, and we find that the district court 
did not err in enforcing the trust.

 

Effect of Will

 

[¶16]   Having concluded that the property 
was validly conveyed to the trust, we reach Copeland's final argument that 
Lohrie intended that the will should revoke the trust, and the district court 
erred in its determination that it did not.

 

[¶17]   Revocation may only be exercised in 
the manner specified. Matter of Estate of 
Sanders, 261 Kan. 176, 929 P.2d 153, 158 (1996) (citing 76 AM.JUR.2D Trusts § 97 at 134). The provision in 
Lohrie's trust that reserved the power to revoke reads as 
follows:

 

ARTICLE IV POWERS RESERVED TO 
GRANTOR

 

A. Grantors, and the survivor of them, reserve full 
and complete power to alter, amend, modify or revoke this Trust at any time 
during Grantors' lives, by an instrument in writing executed by Grantors and 
delivered to Trustee. . . .

 

[¶18]   A trust agreement is governed by 
the plain meaning contained in the four corners of the document. Hronek, 866 P.2d  at 1307. Plainly, the 
provision requires the revocation to occur during the lifetime of the last of 
the settlors. Lohrie's will was not effective until after his death and cannot 
have revoked the trust during his lifetime. Furthermore, the trust was not 
revoked by his execution of the will. The general rule is that a will cannot 
revoke a trust unless it specifically states that intention. Estate of Sanders, 929 P.2d  at 162; 
John P. Ludington, LL.B., Exercise by 
Will of Trustor's Reserved Power to Revoke or Modify Inter Vivos Trust, 81 
A.L.R.3d 959 (1977); 4 WILLIAM F. FLETCHER, SCOTT ON TRUSTS § 330.8 at 364 n. 10 
(4th ed. 1989). Concerning the effect of a will on a revocable trust, we further 
adopt the majority rule as stated in Sanders:

 

the settlor of an inter vivos revocable trust who has 
reserved the power to amend or revoke the trust during the settlor's lifetime by 
a writing delivered to the trustee which specifies the terms of such amendment 
or revocation, does not amend or revoke the trust by the execution of a will 
void of any statement or provision relating to the existing 
trust.

 

Id. 929 P.2d  at 162. Lohrie's will made no mention of his trust at all and, under this 
rule of law, cannot have revoked the trust during Lohrie's 
lifetime.

 

[¶19]   The order of the district court is 
affirmed.