Title: In re Trust D of Darby
Citation: N/A
Docket Number: 103108
State: Kansas
Issuer: Kansas Supreme Court
Date: June 25, 2010

IN THE SUPREME COURT OF THE STATE OF KANSAS 
 
103,108 
 
 
IN THE MATTER OF TRUST D CREATED UNDER THE LAST WILL AND TESTAMENT OF 
HARRY DARBY. 
 
SYLLABUS BY THE COURT 
 
1. 
 
 
The Internal Revenue Service is not bound by modifications to an irrevocable trust 
instrument that have been approved by a district court unless they also have also been 
approved by the highest court of the state. 
 
2. 
We have de novo review of cases decided on the basis of documents and stipulated 
facts. We also have unlimited review when an appeal requires that we construe and apply 
Kansas statutes. 
 
3. 
A support trust exists when the trustee is required to inquire into the basic support 
needs of the beneficiary and to provide for those needs. 
 
4. 
K.S.A. 2009 Supp. 58a-411(b) permits modification of an irrevocable trust if all 
qualified beneficiaries consent and the modification is not inconsistent with a material 
purpose of the trust. 
 
1 
 
5. 
Material purposes of a trust instrument are not readily to be inferred.  A finding of 
such a purpose generally requires some showing of a particular concern or objective on 
the part of the settlor, such as circumstantial or other evidence indicating that the trust 
arrangement represented to the settlor more than a method of allocating the benefits of 
property among multiple intended beneficiaries or a means of offering to the beneficiaries 
(but not imposing on them) a particular advantage. 
 
6. 
In Kansas, a spendthrift provision is presumed to constitute a material purpose of 
the trust.   
 
7. 
A spendthrift trust has been defined as a trust created to provide a fund for the 
maintenance of a beneficiary and at the same time to secure the fund against his or her 
improvidence or incapacity.  Provisions against alienation of the trust fund by the 
voluntary act of the beneficiary or by his or her creditors are its usual incidents. 
 
8. 
Under the facts of this case, a proposed modification to increase the specified 
annual distribution payable to the first generation beneficiary of an irrevocable 
spendthrift trust is inconsistent with a material purpose of the trust to preserve excess 
funds for future generation beneficiaries. 
 
9. 
 
K.S.A. 58a-412(a) permits modification of an irrevocable trust if, because of 
circumstances not anticipated by the settlor, modification will further the purposes of the 
trust. 
 
2 
 
10. 
Courts have generally been more willing to allow modification of an irrevocable 
trust for unanticipated circumstances where there are truly unforeseen events resulting in 
economic hardship, the incapacity of a beneficiary, the impossibility or imprudence of a 
trust provision, or the diminution in value of a trust asset.  Kansas courts have allowed 
such modifications in precisely such unanticipated circumstances. 
 
11. 
Upon a finding of unanticipated circumstances, the court must further determine 
whether a proposed or contemplated modification or deviation of the trust would tend to 
advance or detract from the trust purposes. It is appropriate that courts act with particular 
caution in considering a modification or deviation that can be expected to diminish the 
interests of one or more of the beneficiaries in favor of one or more others. 
 
12. 
Under the facts of this case, we conclude that funding an increase in the first 
generation beneficiary's monetary distribution will inherently frustrate the intention of the 
settlor for income growth as well as jeopardize—or at least reduce—distributions to the 
second and third generation of beneficiaries.  For these reasons, the proposed 
modification to increase the first generation beneficiary's annual distribution cannot be 
validated based on an unanticipated circumstance under K.S.A. 58a-412. 
 
13. 
 
K.S.A. 58a-416 permits modification of a trust to achieve the settlor's tax 
objectives if consistent with his or her probable intent, but a modification of trust 
provisions to achieve tax benefits cannot be validated when it would alter the dispositive 
provisions of the trust. 
 
 
3 
 
Appeal from Wyandotte District Court; DAVID W. BOAL, judge.  Opinion filed June 25, 2010.  
Judgment of the district court is reversed and remanded with directions. 
 
Jeffrey R. King and Phillip Johnson, of Overland Park, were on the brief for appellant Marjorie D. 
Alford. 
 
GREENE, J.: In this appeal we must decide the propriety of the district court's order 
approving modifications to an irrevocable testamentary trust created by the Last Will and 
Testament of Harry Darby, deceased.  Marjorie D. Alford, a daughter of Darby and a first 
generation beneficiary of the subject trust, was successful in achieving an order of the 
district court approving the modifications, but she has perfected this appeal because the 
Internal Revenue Service (IRS) is not bound by such modifications unless approved by 
the highest court of the state.  See Commissioner v. Estate of Bosch, 387 U.S. 456, 18 L. 
Ed. 2d 886, 87 S. Ct. 1776 (1967); In re Estate of Keller, 273 Kan. 981, 985-86, 46 P.3d 
1135 (2002).  For this reason, we granted Alford's motion to transfer the case from the 
Court of Appeals pursuant to K.S.A. 20-3017. 
 
FACTUAL OVERVIEW 
 
On July 15, 1986, Darby executed his last will and testament, which established 
several trusts for the benefit of his daughters and sister.  The only trust at issue in this 
appeal is that denominated by his will as "Trust D," which was to be established at 
Darby's death by a specific bequest in the amount of $240,000 to the trustee, The 
Commercial National Bank of Kansas City, to be administered and distributed as follows: 
 
"A. The trustee shall, at convenient intervals but not less frequently than 
annually, pay an amount (as defined in the next sentence) each taxable year from Trust D 
to my daughter, MARJORIE D. ALFORD, if she is living at the time for the payment of 
such amount. The amount to be paid from Trust D in any taxable year as provided above 
may be paid in such installments during such year as the trustee deems advisable and 
shall be in the amount of Twelve Thousand Dollars ($12,000.00). I strongly recommend 
4 
 
(but this recommendation shall not be deemed to be mandatory) that the payments to be 
made from Trust D shall be in monthly installments which shall be as nearly equal as 
possible. The amount to be paid shall be paid first out of the net income derived from 
Trust D and then out of the principal of Trust D if said net income should not be 
sufficient. Any excess income not needed to make the above payments shall be added to 
the principal of Trust D at such times as the trustee deems advisable. 
"B. Upon the death of the last to die of my daughter, MARJORIE D. ALFORD, 
and me, the funds then comprising Trust D, shall remain in trust, and thereafter the 
trustee shall continue to pay at convenient intervals the sum of Four Thousand Dollars 
($4,000.00) each to the three daughters of MARJORIE D. ALFORD, namely, DIANE 
CHRISTINE MUNKSGAARD, MARY CUBBISON RESTER, and JEAN ANNE 
ALFORD, for their lifetime, and upon the death of each, the trustee shall pay one-third of 
the funds then comprising Trust D to the issue per stirpes of the decreased daughter of 
MARJORIE D. ALFORD." 
 
In addition to these provisions, the will contained numerous provisions applicable 
to all of the trusts so created, including the following provision restricting the powers of 
the beneficiaries: 
 
 
"J. During the entire duration of the trust, each and every beneficiary of the trust 
shall be without power, voluntarily or involuntarily, to sell, mortgage, pledge, 
hypothecate, assign, alienate, anticipate, transfer, or convey any interest in the trust estate 
or the property constituting the trust estate or the income therefrom until the same is 
actually paid into his or her hands, and no interest of any beneficiary in, or claim to, the 
trust estate or any part of creditors of any beneficiary, or to judgment, levy, execution, 
sequestration, attachment, bankruptcy proceedings or other legal or equitable process." 
 
In January 1987, Darby executed a codicil to his last will and testament, which 
increased the amount of the bequest establishing Trust D to $480,000, increased the 
amount of the annual distribution to Alford to $24,000, and increased the annual 
distributions to the second generation beneficiaries to $8,000 each.  No further changes to 
the trust were effected by this codicil. Darby died 9 days after executing this codicil. 
5 
 
 
On July 27, 2009, Alford filed her "Petition for Modification of Testamentary 
Trust under the Kansas Uniform Trust Code" seeking modifications to the trust 
provisions as follows: 
 
"Trust D shall be held, administered and distributed as follows: 
"A. The Trustee shall distribute at convenient intervals, but not less frequently 
than annually, an amount equal to Forty Thousand Dollars ($40,000) annually to my 
daughter, MARJORIE D. ALFORD. Beginning January 1, 2010, this amount shall by 
adjusted on January 1 of each year by the same percentage change in the Consumer Price 
Index—Urban Wage Earners and Clerical Workers (CPI)— US City Average ALL 
ITEMS 1967-100 since January 1 of the prior year. I strongly recommend, but do not 
require, that such payments be made in monthly installments which shall be as nearly 
equal as possible. The amount to be paid shall be paid first out of the net income derived 
from Trust D and then out of the principal of Trust D if such net income is not sufficient. 
Any net income not so distributed shall be accumulated and annually added to principal. 
"B. Upon MARJORIE D. ALFORD's death, the assets then held in Trust D shall 
be distributed to such federal or state taxing authorities for payment of estate taxes as 
MARJORIE D. ALFORD may appoint by a Will or other signed writing that is 
acknowledged before a notary public specifically referring to this power of appointment. 
In default of appointment or insofar as an appointment is not effective, the Trustee shall 
divide the Trust D into a number of equal shares so as to create one equal share for each 
of DIANE CHRISTINE MUNKSGAARD, MARY CUBBINSON RESTER and JEAN ANNE 
PETRICK who is then living and one equal share for each of DIANE CHRISTINE 
MUNKSGAARD, MARY CUBBINSON RESTER and JEAN ANNE PETRICK who is then 
deceased but who has descendants then living. Each share that is created for one of 
DIANE CHRISTINE MUNKSGAARD, MARY CUBBINSON RESTER or JEAN ANNE PETRICK 
who is then deceased shall be distributed to the deceased daughter's descendants then 
living, per stirpes. Each share that is created for one of DIANE CHRISTINE MUNKSGAARD, 
MARY CUBBINSON RESTER OR JEAN ANNE PETRICK who is then living shall be 
distributed as follows: 
 
6 
 
"1. The Trustee shall distribute at convenient intervals, but not 
less frequently than annually, an amount equal to Eight Thousand 
Dollars ($8,000) annually to the daughter of MARJORIE D. ALFORD for 
whom the trust share was created. The amount to be paid shall be paid 
first out of the net income derived from Trust D and then out of the 
principal of Trust D if such net income is not sufficient. Any net income 
not so distributed shall be accumulated and annually added to principal. 
"2. Upon the death of the daughter of MARJORIE D. ALFORD for 
whom the trust share was created, the assets then held in the daughter's 
trust share shall be distributed to the daughter's descendants then living, 
per stirpes." 
 
Alford's petition alleged that her sole source of income "was her $24,000 annual 
distribution from Trust D" and that the "parties have determined that this annual sum is 
no longer sufficient to satisfy [her] basic living expenses."  The petition also alleged that 
the modification to Article VII, paragraph B, was "appropriate to achieve Mr. Darby's tax 
objectives." 
 
All of the identified qualified beneficiaries of Trust D voluntarily entered an 
appearance, waived notice to the hearing, and consented to the proposed modifications.  
No further facts were presented to the district court, and no evidentiary hearing was 
requested or conducted. 
 
The district court approved the modifications, concluding in material part: 
 
 
"4. The Court is authorized, under K.S.A. § 58a-411, to modify the Trust as set 
forth in the Petition because all of the qualified beneficiaries of Trust D consent to such 
modification and such modification is not inconsistent with a material purpose of Trust 
D. The Court is also authorized, under K.S.A. § 58a-412, to modify the Trust as set forth 
in the Petition because Trust D is not providing enough income to satisfy the basic living 
needs of Petitioner Marjorie D. Alford, and therefore circumstances exist that were not 
7 
 
anticipated by the settler of Trust D, and modification will further the purposes of Trust 
D. Finally, the Court is authorized, under K.S.A. § 58a-416, to modify the Trust as set 
forth in the Petition because, under the terms that presently govern the administration of 
Trust D, at Petitioner Marjorie D. Alford's death a significant amount of federal 
generation-skipping transfer tax may be unnecessarily incurred by Trust D, and therefore 
modification will achieve the settlor's likely tax objectives, in a manner that is not 
contrary to the settlor's probable intention." 
 
STANDARD OF REVIEW 
 
To the extent facts were alleged to the district court, there was no dispute as to 
those facts, and the court decided the matter on such undisputed facts and the written 
instruments.  We have de novo review of cases decided on the basis of documents and 
stipulated facts.  See Ward v. Ward, 272 Kan. 12, 30 P.3d 1001 (2001); Lightner v. 
Centennial Life Ins. Co., 242 Kan. 29, Syl. ¶ 1, 744 P.2d 840 (1987).  The sole question 
before us is whether Kansas law supports the actions of the district court in approving the 
modifications to the trust instrument; this requires that we construe and apply Kansas 
statutes, thus also calling for unlimited review by this court.  Double M. Constr. v. 
Kansas Corporation Comm'n, 288 Kan. 268, 271, 202 P.3d 7 (2009).  We are not bound 
by the determination of the district court. In re Estate of Haneberg, 270 Kan. 365, 371, 
14 P.3d 1088 (2000). 
 
OVERVIEW OF APPLICABLE STATUTES 
 
As statutory authority for the proposed modifications, Alford urges us to 
consider—and the district court relied upon—the following statutes within the Kansas 
Uniform Trust Code, K.S.A. 58a-101 et seq.  
 
K.S.A. 2009 Supp. 58a-411(b) and (c): 
8 
 
 
"(b) A noncharitable irrevocable trust may be terminated upon consent of all of 
the qualified beneficiaries if the court concludes that continuance of the trust is not 
necessary to achieve any material purpose of the trust.  A noncharitable irrevocable trust 
may be modified upon consent of all of the qualified beneficiaries if the court concludes 
that modification is not inconsistent with a material purpose of the trust. 
 
"(c) A spendthrift provision in the terms of the trust is presumed to constitute a 
material purpose of the trust." 
 
K.S.A. 58a-412(a):  
 
"(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 must be made in accordance with the settlor's probable intention." 
 
K.S.A. 58a-416: 
 
"To achieve the settlor's tax objectives, the court may modify the terms of a trust 
in a manner that is not contrary to the settlor's probable intention.  The court may provide 
that the modification has retroactive effect." 
 
 
DID THE DISTRICT COURT ERR IN APPROVING THE MODIFICATION INCREASING THE 
ANNUAL DISTRIBUTION TO ALFORD? 
 
Alford contends on appeal that the proposed modification (Article VII, paragraph 
A) increasing her annual distribution amount is necessary to satisfy her basic living 
expenses and that this increase is consistent with Darby's "clear" intent "to ensure 
sufficient trust distributions to support Ms. Alford's basic needs."  Alford points to no 
specific trust provisions to support this suggestion as to Darby's intent, but she argues that 
the doubling of her annual distribution in the will's codicil is indicative of Darby's intent 
to "properly support" Alford. 
 
Applying Kansas law, a modification of this nature may not be approved despite 
consent of all beneficiaries unless it "is not inconsistent with a material purpose of the 
9 
 
trust," K.S.A. 2009 Supp. 58a-411(b), or "because of circumstances not anticipated by the 
settlor, modification . . . will further the purposes of the trust." K.S.A. 58a-412.   
 
Inconsistent with a Material Purpose?   
 
First, we disagree that the "basic support" of Alford was a "material purpose" of 
this trust.  Darby employed no language indicating any such desire, despite the ease of 
inserting a clear directive to the trustee in this regard, or to permit an invasion of 
principal by ascertainable standards for her basic support needs.  This was clearly not a 
support trust.  See Miller v. Kansas Dept. of S.R.S., 275 Kan. 349, 354, 64 P.3d 395 
(2003) (support trust exists when trustee is required to inquire into the basic support 
needs of the beneficiary and to provide for those needs).  And we are not inclined to infer 
a material purpose to support Alford's basic needs when the express terms fail to indicate 
any such purpose. 
 
 
"Material purposes are not readily to be inferred.  A finding of such a purpose 
generally requires some showing of a particular concern or objective on the part of the 
settlor, such as concern with regard to a beneficiary's management skills, judgment, or 
level of maturity.  Thus, a court may look for some circumstantial or other evidence 
indicating that the trust arrangement represented to the settlor more than a method of 
allocating the benefits of property among multiple intended beneficiaries, or a means of 
offering to the beneficiaries (but not imposing on them) a particular advantage."  
Restatement of the Law Third, Trusts § 65, comment d, p. 477 (2001). 
 
We also disagree that the changes effected by the will's codicil are indicative of 
any intent to support Alford's basic needs.  In the codicil executed within 6 months of the 
original will, Darby merely doubled his trust bequest as well as all the beneficiaries' 
annual distribution amounts. No language or circumstantial evidence supports an 
inference to create a support trust. 
 
10 
 
Whereas no direct or circumstantial evidence has been offered to indicate that a 
material purpose of the trust was to provide for Alford's basic needs, we note that a 
specific trust provision does substantially restrict the beneficiaries' rights and interests; 
this provision has been characterized as a spendthrift provision.  In Kansas, a spendthrift 
provision is presumed to constitute a material purpose of the trust.  K.S.A. 2009 Supp. 
58a-411(c). Kansas law is in material contrast to the Uniform Trust Code, which 
specifically negates any such presumption. See Unif. Trust Code, § 411(c), 7C U.L.A. 
498 (2004) (made optional in 2004). 
 
A spendthrift trust has been defined as a trust created to provide a fund for the 
maintenance of a beneficiary and at the same time to secure the fund against his or her 
improvidence or incapacity.  Provisions against alienation of the trust fund by the 
voluntary act of the beneficiary or by his or her creditors are its usual incidents.   In re 
Estate of Somers, 277 Kan. 761, 764, 89 P.3d 898 (2004). 
 
Language nearly identical to Article IX, paragraph J (quoted above) of Darby 
Trust D was characterized as a spendthrift provision by this court in Somers.  Notably, 
this court in Somers construed the spendthrift trust in a manner that prohibited a 
modification to enable distributions to life beneficiaries in excess of the specific monthly 
amount stated in the trust instrument, even though the additional distributions would be 
paid from the remainder interest.  277 Kan. at 771-72.  Following Somers, the proposed 
modification at issue here would be inconsistent with the material purpose manifested by 
the spendthrift provision. 
 
We conclude that the modification increasing the distribution amount to a first 
generation beneficiary (Alford) would be inconsistent with the obvious material purpose 
to preserve sufficient income and principal to fund the distributions to beneficiaries after 
Alford's death.  Due to the limited factual presentation at district court, we have no way 
to determine whether the proposed increase in Alford's share may exhaust the trust's 
11 
 
corpus to the extent that amounts specified to surviving beneficiaries cannot be funded, 
but any reduction in the corpus would seem to be inconsistent with the purpose to have 
sufficient funds to continue specified distributions to the second and third generation of 
beneficiaries. See Restatement Third, Trusts § 66, comment b, p. 494. It is beyond 
dispute that any increase in the annual distribution to Alford will reduce the remainder in 
trust to the third generation beneficiaries, who are to receive "one-third of the funds then 
comprising Trust D." Moreover, the increase is contrary to Darby's express direction to 
add to the principal any excess income not needed for the specified distributions. 
 
For all of these reasons, we conclude that the proposed modification increasing 
Alford's annual distribution is inconsistent with material purposes of the trust and cannot 
be validated under K.S.A. 2009 Supp. 58a-411(b). 
 
Circumstances Not Anticipated by the Settlor?   
 
Under K.S.A. 58a-412, the subject modification increasing Alford's annual 
distribution may be approved if, because of circumstances not anticipated by the settlor, it 
would further the purposes of the trust and can be made in accordance with the settlor's 
probable intention.  On appeal, however, Alford does not argue that there were 
circumstances not anticipated by Darby; indeed, there is no evidence in the record that 
indicates that Darby failed to anticipate that the value of future distributions would be 
devalued by routine inflation. In fact, he was willing to permit principal to be invaded for 
purposes of the specified distributions, but he recognized that income growth alone could 
someday exceed that necessary for the distributions, and in this event, he directed that it 
be added to the principal rather than to increase the distribution to Alford. 
 
Courts have generally been more willing to allow modification for unanticipated 
circumstances where there are truly unforeseen events resulting in economic hardship, the 
incapacity of a beneficiary, the impossibility or imprudence of a trust provision, or the 
12 
 
diminution in value of a trust asset.  See, e.g., In re Nobbe, 831 N.E.2d 835, 843 (Ind. 
App. 2005).  Indeed, our appellate courts have allowed such modifications in precisely 
such unanticipated circumstances.  See, e.g., Somers, 277 Kan. at 770 (dramatic growth 
in the Trust's corpus was "'a unique and unusual set of facts'"); In re Harris Testamentary 
Trust, 275 Kan. 946, 959, 69 P.3d 1109 (2003) (change in case law could not have been 
anticipated by settler); White v. Kansas Health Policy Authority, 40 Kan. App. 2d 971, 
981, 198 P.3d 172 (2008) (change in legislation requiring additional language for trust to 
remain a supplemental needs trust).  No such truly unforeseen circumstance has been 
shown here. 
 
More important, however, is that the proposed increase has not been shown to be 
practicable given Darby's probable intention.  Again, we have no basis in the record to 
determine what the impact of the increase would be on the corpus of the trust.  Given the 
inherent diminution of the trust's overall value in order to fund the proposed increase, we 
must consider that Darby's intent to flow excess income to future beneficiaries would be 
frustrated by the increase. 
 
"[U]pon a finding of unanticipated circumstances, the court must further determine 
whether a proposed or contemplated modification or deviation would tend to advance (or, 
instead, possibly detract from) the trust purposes.  This latter inquiry is likely to involve a 
somewhat subjective process of attempting to infer the relevant purpose or purposes of a 
trust from the general tenor of its provisions and from the nature of the beneficial 
interests, together with the family or personal relationships involved in the trust.  In this 
process, it is appropriate that courts act with particular caution in considering a 
modification or deviation that can be expected to diminish the interests of one or more of 
the beneficiaries in favor or one or more others."  (Emphasis added). Restatement Third, 
Trusts § 66, comment b, p. 494. 
 
We are simply not convinced that devaluation due to normal inflation should be 
considered an unanticipated circumstance where the settlor has specified on two separate 
13 
 
occasions that the distribution be measured by a fixed dollar amount.  If Darby's codicil 
and its increase in annual distribution amount (executed only 6 months after his execution 
of the will) indicates an objective to provide more income for Alford's basic needs—as 
suggested by Alford on appeal, why would not we find in that codicil an escalator to 
protect against future devaluation—just like the escalator contained in the proposed 
modification? 
 
In the last analysis, Darby's recognition that income might exceed the amount 
needed for the annual distribution, and that any such excess be added to principal rather 
than fund larger distributions, is antithetical to any purported failure to anticipate the 
normal inflationary devaluation of the specified amount.  We conclude that funding an 
increase will inherently frustrate his intention for this growth, as well as jeopardize—or at 
least reduce—distributions to the second and third generation of beneficiaries.  For these 
reasons, the proposed modification to increase Alford's annual distribution cannot be 
validated as an unanticipated circumstance under K.S.A. 58a-412. 
 
DID THE DISTRICT COURT ERR IN APPROVING THE MODIFICATION GRANTING A LIMITED 
TESTAMENTARY POWER TO ALFORD? 
 
Alford contends on appeal that the second modification to the trust (Article VII, 
paragraph B) achieves favorable tax treatment "consistent with Senator Darby's intent." 
See K.S.A. 58a-416. By granting Alford a limited testamentary power of appointment, 
the apparent intent of this modification was to vest the assets of the trust in Alford's 
taxable estate, thus subjecting them to federal estate tax rather than federal generation-
skipping transfer tax (GSTT).  Because the exemption for federal estate taxation exceeds 
the value of the trust assets, the modification was apparently intended to minimize federal 
tax liability. 
 
14 
 
At the outset, we note the curious nature of the power granted in this proposed 
modification.  The language requires that the assets of the trust "shall be distributed to 
such federal or state taxing authorities for payment of estate taxes as [Alford] may 
appoint by a will [or otherwise]."   The language then states that in default of such 
appointment (or if ineffective), the trust shall be divided into equal shares for each of the 
second generation beneficiaries.  Although Alford claims on appeal that this language 
creates a "general testamentary power of appointment," we disagree.  Instead, Alford 
would be granted only a limited power to appoint federal or state taxing authorities to 
receive a distribution for payment of estate taxes.  The taxes to be paid are not limited 
only to Alford's estate taxes, but rather could include generically any and all federal and 
state estate taxes of anyone.  We also fail to see any logical nexus whatsoever between 
the limited power granted and the specified consequences of default of such 
appointment—division of the trust into shares for each of the second generation 
beneficiaries. Finally, we find it curious that Alford seeks avoidance of the federal GSTT, 
which has been eliminated effective December 31, 2010. Pub. L. No. 107-16 § 501, 115 
Stat. 38, 69 (2001); see 26 U.S.C. § 2601(2006) et seq. Notwithstanding these curiosities, 
we analyze the validity of the proposed modification. 
 
The tax problem addressed by the proposed modification is exposure to the GSTT.  
As described by Alford's brief on appeal: 
 
"As drafted, the Will failed to account for the generation-skipping transfer tax ('GSTT'). 
See 26 U.S.C. § 2601, et seq. As a general rule (which applies here), the federal transfer 
tax system subjects assets to estate tax in every generation.  Otherwise, assets fall under 
the GSTT. Id. 'The generation-skipping transfer tax is designed to tax these transfers of 
accumulated wealth to successive generations in much the same way that a gift or estate 
tax would have done if the property had been transferred outright by gift or inheritance.' 
In re Estate of Tubbs, 21 Kan. App. 2d 395, 399, 900 P.2d 865[, rev. denied 258 Kan. 
858] (1995) . . . . As such, the GSST 'impos[es] a [45%] tax on transfers which skip 
generations.' Id. See also 26 U.S.C. § 2641(a) . . . . 
15 
 
 "At the time of Senator Darby's death, the GSTT was subject to a $1 million 
exemption for the entirety of his estate. [Citation omitted.] Under the Will, Mr. Darby left 
over $7 million in separate trusts for his children and, upon their deaths, for their 
children. All of these trusts including Trust D, were designed to 'skip' estate taxation in 
the child's generation. Id. The GSTT is triggered, therefore, when the trust funds pass to 
the second generation of beneficiaries (in the case of Trust D, Ms. Alford's children). Id. 
See also 26 U.S.C. § 2623 (same). Thus, under the Will as originally drafted, a 45% 
GSTT would apply to the remaining value of Trust D upon Ms. Alford's death, with only 
minimal set off for its pro rata portion of the $1 million GSTT exemption. [Citation 
omitted.]" 
 
In other words, Alford argues that when the Darby Trust D was created, 
generation skipping may have been a vehicle to avoid federal estate taxation on the trust 
assets passed to each generation, but changes to both the federal GSTT and the federal 
estate tax exemption have now turned the table and optimal tax minimization would 
avoid the generation skip and expose the assets to estate taxation because they do not 
exceed the increased exemption.  Applying K.S.A. 58a-416, would such a change 
"achieve the settlor's tax objectives" in a manner that is "not contrary to the settlor's 
probable intent"? 
 
Questions of this nature have puzzled courts across the nation.  Treatise law 
acknowledges that some courts have been sympathetic to a postmortem request to a 
modification that achieves more favorable tax treatment, but to say that such a request 
achieves the settlor's objectives in a way that is not contrary to probable intent can be a 
stretch. 
 
"Indeed, many of the cases pretty plainly boil down to nothing more than an attempt to 
obtain, through post-mortem litigation, the benefits of better, or more sophisticated, estate 
planning than the settler was able or willing to procure while alive.  So, though it is 
possible to rationalize each of these cases as merely correcting 'mistakes,' in many, the 
petitioner is plainly asking the court to rewrite a document whose dispositive terms are 
16 
 
exactly the way the settler intended them to be, simply to improve its tax efficiency.  It is 
hardly surprising, then, that the courts sometimes balk at tax-driven reformations." 
 
. . . . 
 
". . . Proof that there was a more tax-efficient way to dispose of the settlor's 
property, therefore, is and should be far short of what is necessary to justify reformation 
of a governing instrument, even if there is also proof that the settler wanted to 'minimize 
taxes.'  Under current law, it is always possible not just to 'minimize' the federal estate 
tax, but to eliminate it altogether, by leaving everything, in appropriate ways, to either a 
surviving spouse or a charity.  Yet a great many people, who may well think of 
themselves as wanting to 'minimize taxes,' do not do so; they deliberately dispose of their 
property in ways that will not 'zero out' their taxes.  When the claim is later made that the 
arrangement was not tax-efficient, it may be that the only way to make it more tax-
efficient would have involved different dispositive provisions.  The courts are quite 
naturally less inclined to do this."  5 Scott and Ascher on Trusts §33.5, pp. 2193-95 (5th 
ed. 2008). 
 
See Bogert and Radford, Trusts & Trustees § 994, pp. 196-205 (3d ed. 2006) (and cases 
collected therein). 
 
Here, Alford does not point us to any specific provision of the trust that indicates 
Darby's tax objectives or probable intent relative thereto.  Alford argues on appeal only 
that "[c]onsistent with Senator Darby's intent, the district court's restatement of the will 
would also lower Trust D's future tax burden."   It may be difficult to divine Darby's 
objectives, but it is not difficult to see that the requested modification could seriously 
jeopardize his overall intent manifested within the instrument, and this boundary may not 
be crossed.  See Bogert and Radford, Trusts & Trustees § 994, pp. 197-98 ("power to 
modify the tax related provisions . . . is limited by the requirement that the settlor's 
overall intent, especially the dispositive provisions, not be disturbed by the 
modification"). 
 
17 
 
Regarding Darby's tax objectives, we perceive within the four corners of the will 
nothing more than an oblique idea that taxes should be minimized or avoided by 
restricting or directing certain investment practices by the trustee as a part of Article IX.  
As to Trust D, however, there is merely a straightforward generation skipping bequest 
subject to a spendthrift clause.  The generation skipping design may have been intended 
to minimize federal estate taxes, but we decline to believe that Darby failed to understand 
it would expose the trust to the GSTT.   
 
When Darby designed and executed his original will, the 1976 Tax Reform Act 
imposed the GSTT on trusts or similar arrangements having beneficiaries in more than 
one generation below that of the transferor, subject only to a $250,000 "grandchild 
exclusion."  Pub. L. No. 94-455 §§ 2006-2622, 90 Stat. 1520, 1879 (1976); grandchild 
exclusion at I.R.C. § 2613(b)(6) (repealed 1986). The Tax Reform Act of 1986, effective 
in October 1986, retroactively repealed the original GSTT and substituted a flat tax rate 
on such transfers, subject to a new exemption of $1 million per transferor.  Pub. L. No. 
99-514 §§ 1431-33, 100 Stat. 2085, 2717 (1986) exemption at I.R.C. § 2631; see 26 
U.S.C. § 2601 (2006) et seq.  As recognized by most commentators at the time of the 
1986 enactment, "there appear to be several methods by which one can avoid the full 
impact of the new [GSTT]." See, e.g., Plant and Wintriss, Generation Skipping Transfer 
Tax, 17 U. Balt. L. Rev. 271, 272 (Winter 1988). 
 
 Whether we examine Darby's original will or his codicil, it is clear that he could 
have done a far better job of tax planning had he desired to avoid the GSTT implications 
for Trust D.  This is especially true of his later testamentary device, the codicil, which 
ratified his dispository scheme despite the changes to the GSTT effective months prior to 
his execution of the codicil and which created an even more burdensome tax impact for 
his grandchildren.  Because it is just as likely that Darby intended exposure to the GSTT 
for his grandchildren and avoidance of federal estate tax on the death of Alford as that he 
more generally sought to avoid or minimize overall taxation, there is no reason to believe 
18 
 
that the requested modification somehow "achieves his tax objectives."  In fact, it is just 
as likely that the proposed modification defeats his precise tax objective for Trust D. 
 
An easier call, however, is that the proposed modification would seriously 
jeopardize Darby's overall intent for Trust D.  In distributing all assets at Alford's death to 
whichever taxing authority she may appoint to pay anyone's federal or state estate taxes is 
not only directly contrary to the spendthrift clause prohibiting such powers in 
beneficiaries, but it must be seen as completely destroying his intent to preserve assets for 
the second and third generations.  Moreover, if the grant is construed as a general power 
of appointment as characterized by Alford in her appellate brief, the proposed 
modification may expose the trust assets to the claims of Alford's creditors in direct 
contravention to the express terms of the trust. See Restatement (First) of Property § 329 
(1940).    
 
In either event, we stand with a majority of courts in holding that a modification of 
trust provisions to achieve tax benefits cannot be validated when it would alter the 
dispositive provisions of the trust.  See, e.g., Matter of Estate of Branigan, 129 N.J. 324, 
336-37, 609 A.2d 431 (1992) (court prohibited modification to power of appointment 
because it would alter the dispositive provisions and grandchildren would face possibility 
of losing inheritance); Bogert and Radford, Trusts & Trustees § 994, pp. 197-98. 
 
Finally, we note that the limited power of appointment granted to Alford in the 
proposed modification may not have succeeded in achieving the desired tax result.  We 
express no opinion in the matter but note in passing that the curious attempt to vest the 
assets in Alford for payment of estate taxes may not have satisfied the IRS that vesting 
sufficiently occurred to avoid the GSTT. Moreover, we note that the entire GSTT scheme 
is currently in a state of uncertainty, given scheduled expiration and unknown 
reinstatement. See, e.g., McCouch, The Empty Promise of Estate Tax Repeal, 28 Va. Tax 
Rev. 369 (Fall 2008). 
19 
 
20 
 
 
In summary, we conclude that the proposed modifications to the Darby Trust D 
would contravene applicable Kansas law.  The district court must be reversed and this 
matter remanded with directions to invalidate the modifications. 
 
Reversed and remanded with directions. 
 
DAVIS, C.J., not participating. 
GREENE, J., assigned. 1 
 
1REPORTER'S NOTE: Judge Greene, of the Kansas Court of Appeals, was appointed 
to hear case No. 103,108 vice Chief Justice Davis pursuant to the authority vested in the 
Supreme Court by K.S.A. 20-3002(c).