Case Title: ORLAN O. GARWOOD and CAROL A. JONES as Trustees of the W.J. GARWOOD and MILDRED E. GARWOOD FAMILY TRUST V. WILLIAM J. GARWOOD, individually, and JUDY K. KECHTER, as Trustee of the W.J. GARWOOD and MILDRED E. GARWOOD FAMILY TRUST

Citation: 

Docket Number: S-07-0235

State: wyoming

Court: Wyoming Supreme Court

Date: 2008-10-22T00:00:00Z

Document:
ORLAN O. GARWOOD and CAROL A. JONES as Trustees of the W.J. GARWOOD and MILDRED E. GARWOOD FAMILY TRUST V. WILLIAM J. GARWOOD, individually, and JUDY K. KECHTER, as Trustee of the W.J. GARWOOD and MILDRED E. GARWOOD FAMILY TRUST2008 WY 129194 P.3d 319Case Number: S-07-0235Decided: 10/22/2008
OCTOBER 
TERM, A.D. 2008

 
 
ORLAN 
O. GARWOOD and CAROL A. JONES as Trustees of the W.J. GARWOOD and MILDRED E. 
GARWOOD FAMILY 
TRUST,Appellants(Defendants),v.WILLIAM J. GARWOOD, 
individually,Appellee(Plaintiff),andJUDY K. KECHTER, 
as Trustee of the W.J. GARWOOD and MILDRED E. GARWOOD FAMILY 
TRUST,Appellee(Defendant).

 
 
Appeal 
from the DistrictCourtofPlatteCounty

The 
Honorable John C. Brooks, Judge

 
 

Representing 
Appellants:

Scott 
W. Meier of Hathaway & Kunz, P.C., Cheyenne, 
Wyoming; and Howard V. Scotland III* of Hickey 
& Evans, LLP, Cheyenne, 
Wyoming.  Argument by Mr. 
Meier.

 
 

Representing 
Appellees:

Frank 
J. Jones of Wheatland, 
Wyoming, for Appellee William J. 
Garwood.  No appearance for Judy 
Kechter.

 
 
*Order 
Allowing Withdrawal entered February 29, 2008.

 
 
Before 
VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, 
JJ.

 
 

HILL, 
J., 
delivered the opinion of the Court.  
VOIGT, C.J., and BURKE, J., each filed specially 
concurring opinions.

 
 

HILL, 
Justice.

 
 
[¶1]      On May 2, 2006, 
Appellee, William J. Garwood (Mr. Garwood), initiated this lawsuit in order to 
have the district court direct the Appellants, who are the Trustees of the W. J. 
Garwood and Mildred E. Garwood Trust (Family Trust), to pay to him a sum of 
money sufficient to provide for his support in the manner to which he was 
accustomed.  The Appellants are two 
of his three children, Carol Jones and Orlan Garwood.  Judy Kechter was named as a defendant 
below because she is a Trustee, but she has aligned herself with her father in 
these proceedings.  The Trust at 
issue was created by Mr. Garwood and his wife in 1992.  Mrs. Garwood died in 
2005.

 
 
[¶2]      When Mrs. Garwood 
died in 2005, the Trust split into a Family Trust and a Marital Trust.  As had been the case while Mrs. Garwood 
was alive, Mr. Garwood continued to treat the assets of the Trusts as his own 
personal funds, and he did not abide by many of the terms of the Trust 
documents.  He has now expended most 
of the funds that made up those Trusts in a manner that is contrary to some of 
the terms of the Trusts.  Orlan O. 
Garwood and Carol A. Jones are the natural children of Mrs. Garwood from a prior 
marriage.  Mr. Garwood adopted them 
shortly after he married Mrs. Garwood in 1951.  A third child, Judy K. Kechter, was born 
of Mr. Garwood's marriage to Mrs. Garwood.

 
 
[¶3]      In its judgment, 
the district court settled several matters relating to the Trusts and, in 
addition, directed the Trustees to ensure that Mr. Garwood receive at least 
$3,200.00 a month in income.  A 
significant portion of that sum, about $2,000.00, will come from Mr. Garwood's 
social security benefits and interest he receives on a loan he made to his 
daughter, Judy Kechter.  However, 
about $1,200.00 will have to come from the assets of the Family Trust at issue 
here.  We will affirm the district 
court's judgment.

 
 
ISSUES

 
 
[¶4]      Appellants raise 
these issues:

 
 
1.  Whether 
the district court erred in its allocation of Trust Assets between the Marital 
Trust and the Family Trust.

 
 
2.  Whether 
the district court erred in not appointing a corporate trustee as a means to 
protect remaining trust assets and provide for the professional management of 
the Family Trust.

 
 
Mr. 
Garwood agrees those are the issues to be decided.

 
 
FACTS 
AND PROCEEDINGS

 
 
[¶5]      In 1992, Mr. 
Garwood and Mrs. Garwood bought a Revocable Living Trust "kit" from the Somerset 
Group of Salt Lake City, 
Utah.  One of the salient findings of the 
district court was that the Trust at issue here was of no earthly use to the 
Garwoods because they simply did not have enough assets to reap any of the 
estate tax benefits that spring from such a trust.1  Nonetheless, on April 21, 1992, the 
Garwoods executed the Trust documents and transferred some of their assets to 
that Trust.  Of central concern in 
this case, is that the Trust included Mr. and Mrs. Garwood's home in 
Wheatland.  Another prominent 
feature of the district court's findings was that both Mr. and Mrs. Garwood 
ignored the terms of the Trust and largely used their assets as though the Trust 
did not exist.

 
 
[¶6]      As noted above, 
Mrs. Garwood died in 2005.  Under 
Article III of the Trust, that event caused the Trust to divide into two 
separate trusts, a Marital Trust and a Family Trust.  Mr. Garwood was the Trustee of the 
Marital Trust and the Garwoods' three children were the Trustees of the Family 
Trust.  The assets of the Garwoods 
were divided between the two Trusts as follows:

 
 
            
B.  The Marital 
Trust shall consist of the survivor of the Undersigned's interest in all 
community property2 in the Trust Estate, 
the survivor of the Undersigned's separate property2 in the Trust Estate, and only such 
fractional interest in all other property of the first of the Undersigned to die 
that qualifies for the marital deduction under the Federal Estate Tax law as is 
necessary to reduce the Federal Estate taxes of the first of the Undersigned to 
die to the lowest possible amount, after considering and making allowances for 
all deductions and exemptions and credits including but not limited to any 
credit available under section 2010 of the Internal Revenue Code of 1986, as 
amended, pertaining to the unified credit against estate tax, and the value of 
all other items which pass to or have passed to the survivor of the Undersigned 
under the provisions of this Trust, by operation of law or otherwise, but only 
to the extent that such items are includable in the gross estate of the first of 
the Undersigned to die and are allowable as a marital deduction for Federal 
Estate Tax purposes.  In the sole 
power and discretion of the Trustees, the payment of said fractional interest 
may be made wholly or partly in cash or property, which is fairly representative 
of appreciation or depreciation of all property available to satisfy this 
provision, as selected by the Trustees; provided, however, that such property so 
selected to constitute said fractional interest shall be valued at the value 
thereof as finally determined for estate tax purposes in the estate of the first 
of the Undersigned to die; provided, also in the event, the assets distributed 
under this provision as said fractional interest, are subsequently less in value 
at the time distributed than the value used for Federal Estate Tax purposes, the 
Trustees shall implement the Marital 
Trust, and shall add thereto from the Family Trust qualified assets in an 
amount sufficient to bring said fractional interest in the Marital Trust up to the Federal Estate 
Tax value; provided, further, that in no event shall there be included in the Marital Trust any of the separate 
assets of the first of the Undersigned to die, or the proceeds of said assets, 
which will not qualify for the marital deduction for Federal Estate Tax 
purposes.

 
 

            
C.  The 
Marital Trust shall be held by the 
Trustees [Mr. Garwood], separately in Trust, for the following 
purposes:

                        
1.  The Trustees shall pay to the survivor of the Undersigned, 
all of the income of this Trust, in monthly or other convenient installments, 
but at least annually.  The Trustees 
also shall pay as much of the principal of this trust to the survivor of the 
Undersigned as the survivor may request.  

 
 

                        
2.  Upon the death of the survivor of the Undersigned, the 
Trustees shall distribute the then-remaining principal and undisbursed income of 
the Marital Trust, if any, to such 
person or persons, including the estate of the survivor, as the survivor shall 
appoint.  Such appointment shall be 
made by the survivor amending this Marital Trust, or by the survivor 
referring to and by affirmatively exercising this power of appointment in his or 
her Last Will and Testament.  [Underlining added for 
emphasis.]

 
 
                        
3.  Any principal and income of this Trust not effectively 
appointed by the survivor shall be added at the death of the survivor to the Family Trust and shall be held and 
administered as a part thereof; provided, however, that the Trustees may, in 
their discretion, first pay from the Marital Trust alone, the last illness 
and funeral expenses and any death taxes of the survivor of the 
Undersigned.

 
 
                        
4.  If the survivor of the Undersigned disclaims part or all of 
the fractional interest in the Marital 
Trust as referred to in this Article the disclaimed property shall be 
administered immediately according to the terms and conditions, and to the same 
beneficiaries, as set forth in Article IV, of this Trust 
Agreement.

 
 
            
D.  The Family 
Trust shall contain the balance of the Trust Estate remaining after setting 
aside all property of the Trust Estate that is included in the Marital Trust.  The Family Trust shall contain, also, any 
and all interest of the first of the Undersigned to die in any community 
property held by both of the Undersigned, and not transferred to the Marital Trust.  From the income and principal of the Family Trust only, the Trustees shall 
pay all of the death taxes, legal expenses, and the expenses of the last illness 
and funeral of the first of the Undersigned to die; provided, however, no funds 
received by the Trustee as proceeds from a retirement plan qualified under the 
Internal Revenue Code shall be available for those purposes.  The Family Trust shall then be held by the 
Trustee and used for the following purposes:

 
 
                        
1.  During the lifetime of the survivor of the Undersigned, 
the Trustees of the Family Trust 
shall distribute to said survivor such part or all of, first, the net income, 
and second, the principal of the Family 
Trust as necessary or appropriate for the health, education, and maintenance 
of said survivor, and to provide for the support of said survivor in his or her 
accustomed manner of living, including reasonably adequate health, medical, 
dental, hospital, nursing and invalidism expenses.  Because the Undersigned intend that the 
properties of the Family Trust shall 
not be includable in the estate of the survivor of the Undersigned for estate 
tax purposes, the powers herein granted to the survivor of the Undersigned, 
while serving as a Trustee or Co-Trustee of this Trust Agreement, shall be 
limited as follows:  The survivor of 
the Undersigned, is hereby specifically restricted from serving directly or 
indirectly as a Trustee of the Family 
Trust, and shall have no right to determine the amount of any income or 
principal of the Family Trust to be 
retained or to be distributed to said survivor, or to distribute or manage such, 
but such determination, distribution, and management shall be made by the 
Trustee or Trustees serving with the survivor of the Undersigned. [See 
Amendments, Paragraph 2.]  
[Underlining added for emphasis.]

 
 
                        
2.  Provided however, the survivor of the Undersigned shall 
have the discretionary power at any time and from time to time during his or her 
lifetime to direct the Trustees to pay over and distribute an amount of trust 
income and/or principal to or for the benefit only of the children of the 
Undersigned and their issue.  The 
survivor shall have a "sprinkling power" with regard to income which shall be 
limited to a class consisting of the children of the Undersigned and their 
issue, but the principal (which included profits realized from the sale of any 
of the trust principal) must be distributed equally, per stirpes, to or for the benefit of 
all the children of the Undersigned.  
This special power of appointment may be exercised by delivering to the 
Trustees a writing, duly executed and acknowledged, specifying the amount of 
income that should be paid over and distributed to the particular child or issue 
and in what proportions such income shall be paid over and distributed to the 
particular child or issue and in what proportions such income shall be paid over 
and distributed, or if it be principal which is to be distributed, said writing 
shall specify the amount of principal that should be paid over and 
distributed.

 
 
                        
3.  Notwithstanding anything else to the contrary herein 
contained in this paragraph, under no circumstances shall the survivor of the 
Undersigned appoint or have the power to appoint, either directly or indirectly, 
any interest either to the survivor, the survivor's estate, the survivor's 
creditors or creditors of the survivor's estate, or so as to discharge any legal 
obligations of the survivor including the survivor's legal obligations of 
support.

 
 
                        
4.  Upon the death of the survivor of the Undersigned, the 
Trustees shall dispose of the then-remaining principal and income of the Family Trust as directed in Article IV.

 
 
[¶7]      After Mrs. 
Garwood's death, Mr. Garwood was the Trustee of the Marital Trust and the 
Garwood children were the Trustees of the Family Trust.  The neglect by all Trustees to follow 
the terms of the Trusts continued until this matter arose in 2006. 

 
 
[¶8]      Mr. Garwood has 
long been disabled and is confined, for the most part, to a wheelchair because 
of the effects of polio he contracted as a child.  After his wife's death, he needed a 
full-time, live-in caregiver.  That 
person was still providing care for him at the time of the proceedings on review 
here.  Her name is April Petrie and 
she is fully trained and well-experienced in providing such care.  Mr. Garwood was not eligible for 
assisted living accommodations because he required so much assistance, and his 
daughter did not want to put him in a nursing home.  In 2005, after Mrs. Garwood's death, 
Judy Kechter convinced her father to move to Cheyenne, where she and her husband 
resided.  The home the Kechters 
owned was a bi-level and was not suitable to Mr. Garwood's needs.  Thus, the Kechters bought a new home 
that had a total of 4,200 square feet of living space.  The main level of the house (2,100 
square feet), which was easily accessible to Mr. Garwood, was occupied by him 
and his live-in caretaker.  The 
basement of the house (also 2,100 square feet) was occupied by the 
Kechters.

 
 
[¶9]      The crisis which 
arose in 2006 was that Mr. Garwood needed money to live on because he had 
expended all the cash assets that presumably were in the "Trusts," and his 
income was not sufficient to pay his on-going expenses.  He had about $45.00 in a checking 
account in Wheatland (which was technically the Family Trust Account, although, 
in practice, Mr. Garwood had used it as his own).  He had never closed that account even 
though he no longer used it.  Mr. 
Garwood had about $700.00 in a checking account in Cheyenne (which was 
technically the Marital Trust Account, but both Mr. Garwood and his daughter 
Judy Kechter could write checks on that account).

 
 
[¶10]   We will detail later where all the 
money went, but it suffices here to note that Mr. Garwood considered the terms 
of the Trust "goopy-gull," and he did not abide by them in making 
expenditures.  By 2006, the only 
additional source of income remaining to Mr. Garwood was the sale of his home in 
Wheatland (he moved from Wheatland to Cheyenne in 2006 but continued to maintain the 
Wheatland house).  However, a 
majority of the Trustees of the Family Trust, wherein title to that home 
resided, would not approve its sale.  
At this point in time, the essence of the familial relationship was that 
Mr. Garwood and Judy Kechter were estranged from Orlan Garwood and Carol 
Jones.  Neither Orlan nor Carol 
appeared at the trial on this matter.

 
 
[¶11]   Thus, on May 2, 2006, Mr. Garwood 
filed a complaint seeking to have the district court direct the Trustees to pay 
him the income that he needed to live on, out of the remaining Family Trust 
asset (i.e., to sell the Wheatland house and reduce it to a liquid asset).  On June 6, 2006, the Trustees filed an 
answer and counterclaim seeking an order that Mr. Garwood be required to repay 
to the Trusts sums of money that he had expended from them in violation of the 
terms of the Trusts.  The central 
contentions of the counterclaims were directed at what became of the Trust 
assets after the death of Mrs. Garwood.

 
 
[¶12]   At the time of her death, the 
Family Trust supposedly had assets of $268,885.85, as well as the Wheatland 
house.  The largest asset the 
Garwoods owned was their Raymond James investment account.  It was valued at $323,771.69 
($214,000.00 was attributable to the sale of Mrs. Garwood's interest in a family 
ranch and the remaining $109,771.69 was money jointly put aside by Mr. and Mrs. 
Garwood).  Thus, the Family Trust 
assets supposedly consisted of Mrs. Garwood's $214,000.00 ranch sale proceeds 
and one-half of the remainder of the Raymond James Account, $54,885.85 
($268,885.85).

 
 
[¶13]   Mr. Garwood documented these 
expenditures from the Family Trust:

 
 


1.

Mrs. 
      Garwood's final medical and funeral expenses

$ 
      34,082.02

2.

One-half 
      of the expenses of the Family Trust in maintaining the Wheatland 
      house.

13,255.91

3.

Cash 
      distributed by Mr. Garwood to family members (children and 
      grandchildren)

132,000.00

4.

Distributions 
      to Mr. Garwood under the terms of The Family 
Trust

67,670.55

 
 
TOTAL:

$247,008.48

 
 
Theoretically, 
that left only $21,877.13 remaining in the Family Trust, plus a one-half 
interest in the Wheatland home.  It 
is conceded by all parties that the $132,000.00 gifts were made by Mr. Garwood 
to qualify for Medicaid benefits should he require nursing home care  and, of 
course, none of the residuary beneficiaries refused the 
gifts.

 
 
[¶14]   In addition, Mr. Garwood expended 
about $40,000.00 making gifts to friends who helped him at the time his wife 
died and he moved from Wheatland to Cheyenne, as well as paying for his share of 
the maintenance/improvements on the Wheatland home.  Mr. Garwood also loaned $144,000.00 to 
his daughter Judy Kechter.  The loan 
was to pay interest "at 3% APR" and was to be used to purchase a "1/2 interest 
in property at 30 Wycola 
Road."3  That loan was unsecured, but required 
Judy Kechter to make payments to Mr. Garwood of $995.00 a month beginning 
November 15, 2005 and continuing until October 15, 2020 with a final payment of 
$391.17.  Those payments were 
deposited in Mr. Garwood's Cheyenne bank account which also served as the 
checking account for the Marital Trust.

 
 
[¶15]   Mr. Garwood's income consisted of 
the $995.00 monthly payment from Judy Kechter and $952.00 a month from Social 
Security.

 
 
DISCUSSION

 
 
Standard 
of Review

 
 
[¶16]   This matter was tried to the 
district court sitting without a jury:

 
 
Following 
a bench trial, this court reviews a district court's findings and conclusions 
using a clearly erroneous standard for the factual findings and a de novo standard for the conclusions of 
law.  Piroschak v. Whelan, 2005 WY 26, 
¶ 7, 106 P.3d 887, 890 (Wyo. 2005) (citing Hansuld v. Lariat Diesel Corp., 2003 WY 
165, ¶ 13, 81 P.3d 215, 218 (Wyo.2003) and Rennard v. Vollmar, 977 P.2d 1277, 1279 
(Wyo.1999)).

 
 
The 
factual findings of a judge are not entitled to the limited review afforded a 
jury verdict.  While the findings 
are presumptively correct, the appellate court may examine all of the properly 
admissible evidence in the record.  
Due regard is given to the opportunity of the trial judge to assess the 
credibility of the witnesses, and our review does not entail re-weighing 
disputed evidence.  Findings of fact 
will not be set aside unless they are clearly erroneous.  A finding is clearly erroneous when, 
although there is evidence to support it, the reviewing court on the entire 
evidence is left with the definite and firm conviction that a mistake has been 
committed.

 
 

Piroschak, 
¶ 7, 106 P.3d  at 890.  Findings 
may not be set aside because we would have reached a different result.  Harber v. Jensen, 2004 WY 104, ¶ 7, 
97 P.3d 57, 60 (Wyo.2004).  
Further,

 
 
we 
assume that the evidence of the prevailing party below is true and give that 
party every reasonable inference that can fairly and reasonably be drawn from 
it.  We do not substitute ourselves 
for the trial court as a finder of facts; instead, we defer to those findings 
unless they are unsupported by the record or erroneous as a matter of 
law.

 
 

Id. 
(quotation marks omitted).

 
 

Belden 
v. Thorkildsen, 
2007 WY 68, ¶ 11, 156 P.3d 320, 323 (Wyo. 2007).

 
 
[¶17]   In addition to contending that some 
of the court's fact-finding is clearly erroneous and that some of its 
conclusions are contrary to law, it appears that Orlan Garwood and Carol Jones 
also contend that the district court's judgment is, in part, an abuse of 
discretion.  For example, they 
contend that the district court's failure to require Mr. Garwood to return the 
$144,000.00 that he loaned to Judy Kechter constitutes an abuse of 
discretion.  We recently restated 
our definition of an abuse of discretion like this:  The core of our inquiry must reach the 
question of the reasonableness of the choice made by the trial court.  Judicial discretion is a composite of 
many things, among which are conclusions drawn from objective criteria; it means 
exercising sound judgment with regard to what is right under the circumstances 
and without doing so arbitrarily or capriciously.  FML v. TW, 2007 WY 73, ¶ 8, 157 P.3d 455, 459 (Wyo. 2007).

 
 
[¶18]   The district court's decision 
letter is brief and direct in resolving the issues at large in this 
appeal:

 
 
The 
handling of this matter by Mr. and Mrs. Garwood and the trustees has resulted in 
a mess.

 
 
[Mr. 
Garwood] and his wife did not need a trust for tax purposes and [they] ignored 
much of the trust documents.  All 
funds were co-mingled up to the present.  
It is clear that [Mr. Garwood] and his wife wanted and intended for the 
survivor to have the benefit of their estate until death.  If anything remained, then the children 
could divide up the rest.

 
 
The 
trustees, in particular Ms. Jones and Mr. [Orlan] Garwood generally paid little 
attention to their parents and even less to being 
trustees.

 
 
Nevertheless, 
trust documents were signed, the family residence was put into trust, and at 
some point in time the joint retirement account was placed in trust.  Now the bank account of [Mr. Garwood] is 
apparently in a trust account.  The 
parties agree that there is a trust.

 
 
The 
evidence before the Court is in dispute.  
However, I will generally find in favor of [Mr. Garwood] and adopt the 
evidence set forth in [his] exhibits.  
I must reiterate that Mr. and Mrs. Garwood had a long marriage and it was 
their intention that their estate would be used by the survivor until death and 
that any remaining moneys divided by the children.  That clearly was the intent of the 
trust.

 
 
It 
was also apparent that the trustees['], Jones and [Orlan] Garwood, minimal 
interest in this matter is wholly financial while the trustee, Judy Kechter, is 
and has been concerned with her parents' welfare.

 
 
The 
Family Trust, as of the date of death of Mrs. Garwood, should have had 
approximately $269,000 as set forth in [Mr. Garwood's] Exhibit 12.  From that was properly deducted $34,000 
representing Ms. Garwood's medical and funeral expenses in 2004 through 
2005.  Also deducted from that 
amount was approximately $13,000 for ½ the expenses of the family 
residence.  Also deducted was 
$132,000 paid to the children and to which all trustees 
agreed.

 
 
That 
leaves approximately $89,547.92 in what should have been the family 
trust.

 
 
However, 
from that amount should be deducted $67,670 which should have been distributed 
to [Mr. Garwood] by the trustees for his necessities of life.  Thus, as set forth in Exhibit 12, 
$21,877.37 should still be in the family trust.

 
 
Therefore, 
the family residence should be sold and ½ of the proceeds placed in the family 
trust.  $21,877.37 of the other ½ 
should be placed in the family trust and the balance in the marital 
trust.

 
 
Any 
amount owing on the loan to Judy Kechter is part of the marital 
trust.

 
 
Any 
moneys remaining at the time of [Mr. Garwood's] death shall be distributed 
according to the trusts.

 
 
[Mr. 
Garwood] and Ms. Kechter are ordered to make a full accounting of all trust 
moneys since Mildred Garwood's death.

 
 
The 
trustees shall provide [Mr. Garwood] with enough money so that he is receiving 
$3,200 per month taking into account the $2,000 he is already receiving.[4]

 
 
[¶19]   As noted above, Mr. Garwood 
initiated this action because he needed additional income, and the only 
potential source of such income was to sell the Wheatland home that was titled 
in the name of the Trustees of the Family Trust.  Trustees Carol Jones and Orlan Garwood 
refused to do that.  Instead they 
counterclaimed against their father asserting that they could not provide 
further support to their father because he had improperly expended most of the 
Trust's assets.  In addition, they 
asked the district court to require their father to return "improperly obtained 
assets."5

 
 
[¶20]   In this appeal, they contend that 
the district court erred in allocating assets between the Family Trust and the 
Marital Trust.  Orlan Garwood and 
Carol Jones also asked the district court to appoint a corporate trustee in 
place of the Trustees named by the Trust itself.  The district court declined to do that, 
and they claim the district court was also in error in that regard.  They also contend that the allocation of 
identifiable assets between the Family Trust and the Marital Trust is not in 
keeping with the terms of the Trust documents and constitutes an abuse of 
discretion.  Likewise, they contend 
that the district court's refusal to appoint a corporate trustee is an abuse of 
discretion.

 
 
Allocation 
of Assets

 
 
[¶21]   It is contended by Orlan Garwood 
and Carol Jones that the district court, and this Court, must confine its search 
for an answer to the question of how the assets are to be apportioned between 
the two Trusts, to the Trust documents themselves, and that the Trust documents 
do not permit the allocation fashioned by the district court.  See Kerper v. Kerper, 780 P.2d 923, 934 
(Wyo. 
1989).  We have held that parties 
making an agreement are presumed to know the law and to contract with reference 
to the law.  Walliker v. Escott, 608 P.2d 1272 
(Wyo. 
1980).  Moreover, our precedents 
counsel that the parties to a contract are presumed to know its terms.  Czapla v. Grieves, 549 P.2d 650 
(Wyo. 
1976).  Furthermore, it is contended 
that a failure of the courts to give full recognition to the terms of these 
Trusts will frustrate Mildred Garwood's estate planning scheme.  Moreover, in its Judgment the district 
court failed to take into account the interests of the residuary 
beneficiaries.  It is the contention 
of Orlan Garwood and Carol Jones that Mr. Garwood used $242,303.00 from the 
Family Trust in violation of the terms of the Trust and he must reimburse the 
Trust for those amounts.  In 
addition, Mr. Garwood should reimburse the Family Trust for the $31,405.00 that 
Mr. Garwood used to pay for his wife's final illness and funeral expenses.  It is also claimed that the district 
court erred in allowing Mr. Garwood credit for $67,670.00 for living expenses 
because it did not take into account his monthly income from other sources 
during that period of time.  
Finally, they contend that Judy Kechter must refinance the loan made to 
her by her father and then her father can use that money to repay the Family 
Trust.

 
 
[¶22]   We conclude that the district 
court's findings of fact are not clearly erroneous and its application of the 
law to these circumstances is likewise not erroneous.  The Garwoods had the misfortune to fall 
victim to an itinerate hawker of "fill-in-the-blank," "one-size-fits-all," trust 
forms.  The materials were 
ill-suited to the Garwoods' needs and have served to squander a significant 
portion of their hard-earned life savings on legal proceedings and attorney's 
fees (we are given to understand from the briefs that the Trusts have paid over 
$49,000.00 in attorney's fees incurred by Orlan Garwood and Carol Jones, and 
that there is only slightly more than $16,000.00 left in the Family Trust).  Clearly there is no pot of gold at the 
end of the rainbow for anyone involved in this litigation, most certainly not 
for the 84-year-old Mr. Garwood who is dependent on the income from the Trust to 
eke out his subsistence standard of living for the remainder of his 
days.

 
 
[¶23]   The district court has fashioned a 
suitable and practical resolution to the problems brought before 
it:

 
 
            
[T]he court possesses and frequently exercises the power, on the 
application of the trustee or one or more beneficiaries, to modify the terms of 
the trust in order to effectuate the accomplishment of the purposes of the 
settlor.  Where administrative 
provisions handicap the trustee, or the trustee lacks an essential power, the 
court frequently releases the trustee from the objectionable provision, or 
grants the needed authority, or otherwise changes the trust as to methods of 
operation, so as to enable the trustee to achieve the primary purposes of the 
settlor.  Statutes in many states 
authorize the court to modify or terminate the trust on a finding that the 
fulfillment of the settlor's purpose has become impossible or 
impracticable.

 
 
Mary 
F. Radford and George Gleason Bogert, The 
Law of Trusts and Trustees § 994, at 182-86 (2006); State v. Underwood, 54 Wyo. 1, 86 P.2d 707, 725 (1939); In re Joint Eastern and 
Southern Districts Asbestos Litigation, 878 F. Supp. 473, 536-540 (E.D.N.Y 
and S.D.NY. 1995); and see Wyo. Stat. 
Ann §§ 4-10-105(a)(iv); 4-10-106, 4-10-201; 4-10-413, 4-10-415, 4-10-416 
(LexisNexis 2007).  It is not clear 
from the record below exactly which of its statutory, common law or equitable 
powers the district court relied upon in deciding this case, but it suffices 
here to note that any one or more of them could form a solid basis for the 
district court's resolution of this case.

 
 
[¶24]   In summary, we conclude that the 
district court's factual findings are not clearly erroneous, and its disposition 
of the issues raised herein is sound as a matter of law.

 
 
Appointment 
of Corporate Trustee

 
 
[¶25]   The district court's judgment 
simplified the role of the Trustees considerably.  They really have no responsibilities 
beyond sending Mr. Garwood a check once a month in the sum of approximately 
$1,200.00.  If the Trust has not 
been exhausted at the time Mr. Garwood dies, the Trustees are only required to 
divide the Trust residue into three equal parts and convey them to the Garwood 
children or their heirs.  Orlan 
Garwood and Carol Jones demonstrated no need for the district court to alter the 
terms of the Trust with respect to who should serve as 
Trustees.

 
 
[¶26]   Moreover, Orlan Garwood's and Carol 
Jones' contention that the district court abused its discretion in declining to 
appoint a corporate trustee is not supported by cogent argument or pertinent 
authority, and we will not consider it further.  We conclude that, on the face of the 
record on appeal before us, the district court committed no error in denying the 
motion for the appointment of a corporate trustee.

 
 
[¶27]   We take note that Mr. Garwood's 
brief indicates that there is continuing litigation over matters associated with 
this case, and a continuation of misconduct by Orlan Garwood and Carol Jones 
with respect to their obligations as Trustees.  If that is, indeed, the case, the 
district court should resolve those additional matters expeditiously and in 
conformance with the spirit and the letter of this 
opinion.

 
 
CONCLUSION

 
 
[¶28]   The judgment of the district court 
is affirmed in all respects.

 
 

FOOTNOTES

1At its peak, 
the Garwoods' estate consisted of assets of about $400,000.00.  At the time the Trust was formed, 
adverse tax consequences did not arise until the estate was over $1,200,000.00 
(if both of them were alive) and $600,000.00 (if only one of the two was 
alive).

 
 

2"Community 
property" and "separate property" are defined in an amendment to the 
Trust.

 
 

3This 
property was a vacation home/cabin that was of little or no benefit to Mr. 
Garwood.

 
 

4Mr. 
Garwood's list of expenses was very detailed.  His most significant expenses were:  $1,040.00 a month for his caregiver; 
$860.66 rent to his daughter Judy; $325 spending money (e.g., meals out, 
entertainment, clothing and personal items, gasoline); $297 for medical/pharmacy 
expenses; $275 for food; $150 for vitamin supplements that he had taken for 
years; utilities $140; phone and cable TV $128.87.

 
 

5The gravamen 
of this claim was that Judy Kechter should be required to refinance the 
$144,000.00 loan and return that money to the Family 
Trust.

 
 

VOIGT, 
Chief Justice, 
specially concurring.

 
 
[¶29]   I concur in the result reached by 
the majority, but I think both the majority opinion and the specially concurring 
opinion of Justice Burke go too far 
in addressing the issue of whether or not equity and the common law remain in 
the arsenal of the district court when faced with questions involving 
modification of a trust.  The 
majority opinion concludes that the district court retains broad equitable and 
common law powers to modify a trust, which interpretation may be consistent with 
Wyo. Stat. Ann. § 4-10-106 (LexisNexis 2007).  See supra ¶ 23.  In his specially concurring opinion, 
Justice Burke concludes that the 
modification provisions of the Uniform Trust Code, such as those found in Wyo. 
Stat. Ann. § 4-10-413(a) (LexisNexis 
2007), preempt the field, leaving no room for modification under equity or the 
common law.  See infra ¶ 33.  That is certainly a reasonable argument 
under our rules of statutory construction.

 
 
[¶30]   I would not try to answer this 
question in this case because the majority opinion's result can be obtained 
without venturing that far.  Under 
the facts presented, Wyo. Stat. Ann. § 4-10-413(a) justifies the district 
court's conclusion.  That is all 
that has to be said.  

 
 

BURKE, 
Justice, specially 
concurring.

[¶31]   I concur with the result reached by 
the majority and agree with the conclusion that the factual findings of the 
district court were not clearly erroneous.  
The district court's allocation of assets and liabilities between the 
family and marital trusts was within the proper exercise of the court's 
discretion as restricted by the language of the trust documents.  I write separately, however, because I 
question the majority's reliance on common law principles as support for the 
authority of the district court to modify a trust 
agreement.

[¶32]   The majority opinion suggests that 
a court may modify the terms of a trust pursuant to the court's statutory 
authority and its equitable or common law powers.  Supra, ¶ 23.  The Uniform Trust Code, as adopted in 
Wyoming, 
allows modification under specific circumstances.  See Wyo. Stat. Ann. §§ 4-10-411 through -417.  The majority specifically references 
Wyo. Stat. Ann. § 4-10-413, which states in pertinent 
part:

(a)  The court may modify the administrative 
or dispositive terms of a trust or terminate the trust if, because of 
circumstances not anticipated by the settler, modification or termination will 
further the purposes of the trust.  To the extent practicable, the 
modification shall be made in accordance with the settlor's probable 
intention.

[¶33]   Another provision of Wyoming's Uniform Trust 
Code, Wyo. Stat. Ann. § 4-10-106, states that "[t]he common law of trusts and 
principles of equity supplement this act, except to the extent modified by 
this act or another statute of this state."  (Emphasis added.)  When the provisions of Wyoming's Uniform Trust 
Code are considered in pari materia, 
it would appear that the common law relating to modification of trust agreements 
has been statutorily preempted.  I 
disagree with the majority opinion to the extent that it suggests 
otherwise.