b'\x0cThe Law of Trusts\n\nBrowne C. Lewis\nAssociate Professor\nLeon and Gloria Plevin Professor of Law & Director, Center for Health Law & Policy\nCleveland-Marshall College of Law, Cleveland State University\n\neLangdell\xc2\xae Press 2013\n\nii\n\n\x0cAbout the Author\nProfessor Lewis graduated number one in her class with a degree in Political Science from\nGrambling State University. Prior to attending law school, Professor Lewis received summer\nfellowships to study at Carnegie-Mellon University, the Hubert H. Humphrey Institute at the\nUniversity of Minnesota and the John F. Kennedy School of Government at Harvard\nUniversity.\nProfessor Lewis started her professional career as a statistician and ADR trainer at the\nConflict and Change Center in Minneapolis, Minnesota. Then, she clerked for the\nHonorable Daniel Wozniak, Chief Judge of the Minnesota Court of Appeals. Professor\nLewis practiced in the areas of environmental, elder, family, housing and probate law.\nProfessor Lewis spent most of her career working as a legal services attorney.\nProfessor Lewis is the Leon & Gloria Plevin Professor of Law and the Director of the\nCenter of Health Law & Policy at Cleveland-Marshall College of Law. Prior to joining the\nfaculty at Cleveland-Marshall, Professor Lewis was an associate professor at the University\nof Detroit Mercy School of Law, a visiting professor at the University of Pittsburgh School\nof Law, a summer visiting professor at Seattle University School of Law and a legal writing\ninstructor at Hamline University School of Law. Professor Lewis has also taught in the\nAmerican Bar Association CLEO Summer Institute.\nLewis is a member of the American Society of Law, Medicine & Ethics, the Health Care\nCompliance Association, the Public Health Law Association and the American Health\nLawyers\' Association. Professor Lewis is also a public member of the Board of the Joint\nCommission and a member of Cleveland State University\'s Institutional Review Board\n(IRB).\nProfessor Lewis writes in the areas of environmental, family and reproductive law. Her next\nmost recent article on surrogacy and maternity is forthcoming in the St. John\xe2\x80\x99s Law Review.\nProfessor Lewis has recently completed a book on paternity and artificial insemination for\nNew York University Press. In 2010, Professor Lewis\' casebook on the inheritance rights of\nchildren was published by Carolina Academic Press.\n\niii\n\n\x0cNotices\nThis is the first version of this casebook. Visit http://elangdell.cali.org/ for the latest version\nand for revision history.\n\nThis work by Browne C. Lewis is licensed and published by CALI eLangdell Press under a\nCreative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. 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CALI disclaims all liability to any\nperson for any loss caused by errors or omissions in this collection of information.\n\niv\n\n\x0cAbout CALI eLangdell Press\nThe Center for Computer-Assisted Legal Instruction (CALI\xc2\xae) is: a nonprofit organization\nwith over 200 member US law schools, an innovative force pushing legal education toward\nchange for the better. There are benefits to CALI membership for your school, firm, or\norganization. ELangdell\xc2\xae is our electronic press with a mission to publish more open books\nfor legal education.\nHow do we define "open?"\n\xef\x82\xb7\n\nCompatibility with devices like smartphones, tablets, and e-readers; as well as print.\n\n\xef\x82\xb7\n\nThe right for educators to remix the materials through more lenient copyright\npolicies.\n\n\xef\x82\xb7\n\nThe ability for educators and students to adopt the materials for free.\n\nFind available and upcoming eLangdell titles at elangdell.cali.org. Show support for CALI by\nfollowing us on Facebook <facebook.com/caliorg> and Twitter <@caliorg>, and by telling\nyour friends and colleagues where you received your free book.\n\nv\n\n\x0cTable of Contents\nAbout the Author ..................................................................................................... iii\nNotices ...................................................................................................................... iv\nAbout CALI eLangdell Press ..................................................................................... v\nPreface ..................................................................................................................... viii\nChapter 1 - The Capacity to Create a Testamentary Trust........................................ 1\n1.1. Parties Involved in a Trust Arrangement .................................................................... 2\n1.2. Testamentary Capacity.................................................................................................... 4\nChapter 2 - Creation of a Private Trust .................................................................... 46\n1.2 Intent to Create a Trust ................................................................................................ 46\n2.2 Requirement of Trust Property ................................................................................... 53\nEdwards v. Edwards ..................................................................................................................... 54\n2.3 Necessity of Trust Beneficiaries .................................................................................. 63\nChapter 3 - Categories of Private Trusts.................................................................. 71\n3.1. Private Expressed Trusts.............................................................................................. 71\n3.2. Trusts Created By Operation of Law ......................................................................... 93\nChapter 4 - Discretionary and Support and the Rights of the Beneficiary\xe2\x80\x99s\nCreditors ..................................................................................................................122\n4.1 Discretionary Trusts.................................................................................................... 125\n4.2. Support Trust ............................................................................................................... 131\nChapter 5 - Spendthrift Trusts and Creditors .........................................................140\n5.1 Expressed Spendthrift Trust...................................................................................... 141\n5.2 Implied Spendthrift Trust .......................................................................................... 142\n5.3 Creditors ....................................................................................................................... 149\nChapter 6 - Modification and Termination of Trusts .............................................174\n6.1 Termination .................................................................................................................. 175\n6.2 Claflin and Material Purpose ..................................................................................... 182\n6.3 Deviation and Changed Circumstances ................................................................... 186\n6.4 Removal of the Trustee .............................................................................................. 194\nChapter 7 - Creation and Modification of Charitable Trusts .................................201\n7.1 Creation of the Charitable Trust ............................................................................... 201\n7.2 Modification/Cy Pres ................................................................................................. 207\nChapter 8 - Supervision/Enforcement of Charitable Trusts ................................. 237\n8.1 Donor Standing ........................................................................................................... 237\n8.2 Beneficiary Standing.................................................................................................... 248\nChapter 9 - Treatment of Trust Property ............................................................... 254\n9.1 The Duty to Collect and Protect Trust Property.................................................... 254\n9.2 The Duty to Earmark Trust Property and to Not Comingle Trust Funds ........ 254\n9.3 The Duty Not to Delegate ......................................................................................... 260\n9.4 Duty of Prudence ........................................................................................................ 261\nChapter 10 - Duty of Loyalty .................................................................................. 282\nChapter 11 - Duty of Impartiality ........................................................................... 302\nChapter 12 - Duty to Account and Inform ............................................................. 323\n12.1 To Account .................................................................................................................. 324\n12.2 To Inform..................................................................................................................... 346\nvi\n\n\x0c12.3\n\nThe Trustee\xe2\x80\x99s Liability ............................................................................................ 358\n\nvii\n\n\x0cPreface\nRecently, the public waited patiently to find out the contents of Whitney Elizabeth\nHouston\xe2\x80\x99s will. People were entertained by her music and fascinated by her death. Thus, it is\nno surprise that they were on the edge of their seats to discover how much money she had in\nher estate. Inside Edition and other entertainment shows teased the public with previews\nstating that they had received a copy of the will and planned to reveal its contents. The big\nreveal fell short when the public realized that Houston had left everything to her daughter\nusing a testamentary trust. Wills are public documents, but trust instruments are not.\nTherefore, the public will never know the specific provisions contained in the trust\ndocument. Privacy is one of the reasons why more and more people are disposing of their\nproperty using testamentary trust created in their wills. The reasons people establish trusts\nare as varied as the lawyers who draft them. Traditionally, trusts were vehicles wealthy\npeople used to provide for their love ones. Currently, people from all economic classes\nestablish trusts. Thus, for students desiring to practice in the probate or elder law arena, it is\ncrucial that they have a basic understanding of the law of trusts.\nThe standard four-credit Wills & Trusts courses taught at most law schools do not\nspend a sufficient amount of time on the law of trusts. Professors teaching such courses\nhave the daunting task of teaching intestacy, wills, non-probate transfers, estates, and trusts.\nThe semester is not long enough to give detail coverage to all of the important topics.\nConsequently, professors have to decide what material to omit. Typically, the material on the\nlaw of trusts is either omitted or severely shortened. One obvious reason for the treatment\nof the trust information is the fact that the chapters on trusts are in the latter part of most\ncasebooks. It is difficult to predict the pace at which the material will be covered. Thus,\nmost professors have to adjust their reading assignments. Those adjustments usually require\nthe professors to cut assigned materials. Frequently, by the time the decision to reduce the\nreading assignments needs to be made, the only significant material left to be covered are the\nchapters on the law of trusts. Hence, that material is routinely omitted.\nThe use of testamentary trusts is becoming an important part of estate planning. As a\nresult, students who want to make a living as probate attorneys will need to know how trusts\nfit into estate planning. In addition, bar examiners realize that it is important for students to\nhave a basic knowledge of trust law. That realization will result in bar examination questions\nviii\n\n\x0cthat test that knowledge. The Law of Trusts is designed for use as a supplementary text for a\ncourse on wills and trusts and the primary text in a seminar or course exploring the law of\ntrusts.\nSince the settlor is dead when the testamentary trust becomes effective, the\ntestamentary trust is an irrevocable trust. The main focus of this book is on that type of\ntrust. However, the revocable inter vivos trusts will be briefly mentioned as it relates to the\ntestamentary trusts. Most of the legal issues surrounding the law of trusts come from\nchallenges to the creation and implementation of the trusts. In addition, even if the\ntestamentary trust is deemed to be valid, the actions of the trustee may lead to litigation. This\nbook is divided into two components to address the issues that arise in those two types of\nlitigation.\nPart I explores the legal issues involved in the creation, modification and\nimplementation of private and charitable trusts. In order to have a trust invalidated, the\nopponent must successfully challenge the capacity of the settlor or the procedure used to\ncreate the trust. Part I contains a chapter that examines the level of mental ability a person\nmust have to create a trust. Other chapters in this part explains the steps that must be taken\nto create, modify and terminate a trust and compares the various types of private trusts.\nPart II discusses the administration of private and charitable trusts. In particular, the\npart focuses upon the numerous duties of the trustee. Trusts are usually created to protect a\nperson who is vulnerable in some way. In a lot of respects, that person is at the mercy of the\ntrustee. Any decision that the trustee makes, good or bad, directly impacts the beneficiary.\nIn order to protect the beneficiary from the actions of the trustee, the law imposes a\nfiduciary duty on the trustee. Chapters in Part II analyze the trustee\xe2\x80\x99s duties and the remedies\navailable to the beneficiary in the event of the trustee\xe2\x80\x99s breach of any of those duties. Part II\nalso includes a discussion of powers of appointments and their relevancy to trusts. This\ndiscussion is necessary because bar examinations frequently contain questions dealing with\npowers of appointment.\nIn additional to cases, the book contains problems, notes and questions. The cases\nare designed to give the student a clear understanding of the law. The problems are included\nto permit the student the opportunity to apply the law. The notes and questions are provided\nso the student will think critically about the policies behind the law and the outcome of the\ncases.\nix\n\n\x0cChapter 1 - The Capacity to Create a\nTestamentary Trust\nThis chapter is divided into two parts. Part I introduces students to the parties that\nare involved in the creation of a trust. Further, that part discusses the function of each of the\nparties. Most trusts are testamentary in nature, so they are created as a part of a will. In order\nfor a testamentary trust to be valid, the testator must be legally capable of executing the trust.\nThus, in Part II of the chapter, I discuss the mental capacity the testator must possess to be\ndeemed competent to create a trust. In addition, the students will be introduced to the other\nlegal theories that may be used to attack the testator\xe2\x80\x99s ability to establish a trust.\nThe primary purpose of a trust is to provide a source of income for a person who is\nnot capable of managing his or her resources. For instance, Barbara\xe2\x80\x99s son, John has a\ngambling problem. Barbara wants to make sure that John always has a place to live. If\nBarbara gives John a house outright, he would probably lose it in a card game. Barbara\ncannot give John the house and forbid him from transferring it because a direct restraint on\nalienation is invalid. Thus, the court would ignore the condition and give John the house\nwithout the restriction. Barbara can give John a life estate in the property, so that he would\nhave a place to live until he died. Granting John a life estate may not be a good idea for\nseveral reasons. A legal life tenant has a duty to pay taxes and to maintain the property in\ngood repair. However, that duty is limited because the life tenant only has to fulfill that\nobligation to the extent the income from the property is sufficient to cover those expenses.\nIt is unlikely that the house will produce any income, so John would not be obligated to pay\nthe property taxes or to keep the house in good repair. Even if John has such a duty, he is\nprobably too irresponsible to do so. Thus, giving John a life estate in the house may cause\nmore problems than it cures. Moreover, if the life tenant accrues debt, that person\xe2\x80\x99s creditor\ncan legally seize the life estate and sell it. The creditor would probably realize very little from\nthe sale. But, the sell of the life estate will defeat Barbara\xe2\x80\x99s purpose of providing John with a\nplace to live. Barbara\xe2\x80\x99s best option is to put the house in trust for John. This means that\nBarbara would give the legal title of the house to a third party. That person would be\nresponsible for maintaining the house for John. As the beneficiary of the trust, John would\nhave equitable title of the house. Since John would not have legal title, he would be unable to\n1\n\n\x0csell or gamble away title to the house. Thus, the creation of a trust would enable Barbara to\nachieve her objectives.\n\n1.1.\n\nParties Involved in a Trust Arrangement\nUsually, at least three parties are involved in the creation of a trust. Those parties are\n\nthe settlor/trustor, the trustee, and one or more beneficiaries. In cases involving\ntestamentary trusts, the settlor is referred to as the testator. Three different individuals do\nnot have to be involved in the transaction in order for a valid trust to be established. For\nexample, one person can serve as the settlor and the trustee. If a self-settled trust is involved,\nit is possible for one person to serve in all three capacities. However, for the trust to be\nvalid, the trustee must owe equitable duties to someone other than herself. Thus, if the\nsettlor is also the trustee, she cannot be the only trust beneficiary. The settlor/trustor is the\nperson who creates the trust. Since she is the person who established the trust, Barbara is the\nsettlor or trustor.\nThe third party who manages the trust is the trustee. The trustee may be an\nindividual or a corporation. The settlor may select one trustee or several trustees to manage\nthe trust. The trustee may be appointed by the trust instrument or by the court. The person\nor entity appointed as trustee must affirmatively accept the role. Once the trustee accepts the\nappointment as trustee, the person can be released of the obligation only with the consent of\nthe beneficiaries or by a court order. The trustee is entitled to receive reasonable\ncompensation. A trust will not fail for lack of a trustee. If the trustee dies and no successor\ntrustee is named in the trust instrument, the court will appoint a successor in trustee.\nHowever, if the trust instrument or other facts indicate that the settlor chose the person to\nact as trustee because of the nature of their relationship, the court may conclude that the\nsettlor would not want the trust to continue without that trustee. As a result, the court may\ndissolve the trust on the death or resignation of the trustee. If the trust is created as a part of\na will, the executor can also serve as the trustee.\nThe trust instrument must give the trustee some active duties to perform. A settlor\nwho gives the trustee no managerial responsibilities creates a dry trust. As a result, the court\nwill not recognize the creation of the trust, and the beneficiary will receive legal title to the\ntrust property. The following example illustrates a dry trust:\n\n2\n\n\x0cExample-Utilizing an instrument entitled \xe2\x80\x9cTrust For the Benefit of Roberto\nand Marianna\xe2\x80\x9d Sophia placed one million dollars in an irrevocable trust for\nher two children, Roberto and Marianna. She selected Vincent to serve as\ntrustee. Under the terms of the trust, $100,000 would be automatically paced\nin the respective bank accounts of Roberto and Marianna each month.\nSophia never informed Vincent that he was to serve as trustee.\nThe above-referenced transaction did not result in a valid trust because the funds were\nautomatically dispensed to Roberto and Marianna. Vincent had no managerial duties. The\nfact that the trust could function without Vincent\xe2\x80\x99s knowledge further indicates that it was a\npassive or dry trust. Consequently, the court would invalidate the trust and Roberto and\nMarianna would have the right to split the million dollars and obtain it without restrictions.\nThe trustee has legal title to the trust property, and the beneficiary has equitable title.\nConsequently, the trustee has the managerial authority over the property. Nevertheless, the\nbeneficiary is the one who suffers the consequences of the trustee\xe2\x80\x99s good or bad decisions.\nIn the example put forth at the beginning of the chapter, the trustee has legal title to the\nhouse and manages it for the benefit of John. Although the trustee has legal title to the\nhouse, a personal creditor of the trustee has no recourse against the house. If the trustee\nacquires an obligation on behalf of the trust, the creditor has recourse against the house, but\nnot against the trustee\xe2\x80\x99s personal property.\nExample 1-Keisha devises Purpleacre in trust to Robert to pay income to\nGary for life and the remainder to LaNitra on Gary\xe2\x80\x99s death. Robert\naccidentally hits April with his car. April files suit against Robert and receives\na judgment for $300,000. Although Robert has legal title to Purpleacre, April\ncannot place a lien on Purpleacre to satisfy her judgment.\nExample2-Gloria devises Blackacre in trust to Tamera to pay income to Ali\nfor life and the remainder to Patrick on Ali\xe2\x80\x99s death. Tamera contracts with\nJason to make repairs to Blackacre. Jason submits a bill to Tamera for\n$40,000. Tamera refuses to pay the bill. Jason can go to court and get a\nmechanic\xe2\x80\x99s lien on Blackacre. However, Jason cannot sue Tamera personally\nfor the debt.\nThe beneficiary of the trust is the person who receives the benefit of the trustee.\nJohn is the beneficiary of the trust because it was created so he would have a place to live.\n3\n\n\x0cJohn has the equitable title to the house. John\xe2\x80\x99s equitable interest entitles him to sue the\ntrustee personally for breach of trust. Moreover, equity gives John, as beneficiary, the right\nto live in the house. Thus, if the trustee wrongfully disposes of the house, John can recover\nthe house unless it has come into the hands of a bona fide purchaser for value. In addition, if\nthe trustee disposes of the house and acquires other property with the proceeds of the sale,\nJohn can enforce the trust on the newly obtained property.\nExample-Ivana devises Brownacre in trust to Jessica for George for life and\nthe remainder to Katherine on George\xe2\x80\x99s death. Jessica sells Brownacre to\nRobin, a BFP, and buys Blueacre. George can sue to receive equitable title to\nBlueacre.\nIn the above example, since Robin, a BFP, acquired legal title to Brownacre, George is\nunable to maintain his equitable interest in the property. George\xe2\x80\x99s remedy is to sue to get\nthe proceeds Jessica received from the sell of Brownacre or to obtain an equitable interest in\nBlueacre.\n\n1.2.\n\nTestamentary Capacity\n1.2.1. Mental Capacity\nIn order to create a testamentary trust the testator must be an adult and must be of\n\nsound mind. A person who is 18 years of age or older is considered to be an adult. It is\ndifficult to determine if the person was \xe2\x80\x9cof sound mind.\xe2\x80\x9d The level of mental ability the\ntestator needs is really low. For instance, a person suffering from dementia or Alzheimer\xe2\x80\x99s\ndisease may be competent to establish a testamentary trust as long as the person has lucid\nmoments. In order to have the necessary mental capacity to create a valid testamentary trust,\nthe testator must know the following: (1) the nature and extent of his property; (2) the\npersons who are the natural objects of his bounty: (3) the disposition he is making; and (4)\nthe manner in which those facts relate so far as to form an orderly plan for the disposition of\nhis property.\nTo be found to be mentally competent, the testator does not have to have actual\nknowledge of every piece of property that will be included in the trust. The testator also does\nnot have to be able to name every relative that may be a beneficiary of the trust.\n\nIn the Matter of the Estate of Gallavan, 89 P. 3d 521\nOpinion by Judge CARPARELLI\n4\n\n\x0cIn this formal testacy proceeding as to the estate of Donna L. Gallavan (decedent),\nJoseph James Verce, Jr. (contestant), as personal representative of decedent\xe2\x80\x99s sister, Carla M.\nVerce, appeals the trial court\xe2\x80\x99s judgment denying his petition for adjudication of intestacy.\nPhillips R. McClendon, as decedent\xe2\x80\x99s personal representative, and Shriners Hospitals for\nChildren, as a devisee, opposed the petition. We affirm.\nDecedent was a protected person under conservatorship when she executed a will\nthat contained a testamentary trust for the benefit of her sister and brother during their lives.\nUpon the death of both beneficiaries, the trust was to terminate, and trust proceeds were to\nbe distributed to Shriner\xe2\x80\x99s Hospitals.\nDecedent died in July 1999. Her personal representative submitted the will to\ninformal probate. Decedent\xe2\x80\x99s sister survived decedent, but died in September 1999. Her\nbrother also survived her but died in October 2011 while the estate was in probate.\nContestant later filed the petition for adjudication of intestacy at issue here, alleging that\ndecedent lacked testamentary capacity to execute the will.\nContestant urges us to conclude that the will is invalid because decedent lacked\ntestamentary capacity. We perceive no basis for such a conclusion.\nA person has testamentary capacity if he or she is an \xe2\x80\x9cindividual eighteen or more\nyears of age who is of sound mind.\xe2\x80\x9d Section 15-11-501, C.R.S. 2003. The soundness of a\ntestator\xe2\x80\x99s mind may be evaluated under either the Cunningham test or the insane delusion test.\nSee Breeden v. Stone, 992 P.2d 1167 (Colo. 2000); Cunningham v. Stender, 127 Colo. 293, 255 P.\n2d 977 (1953).\nUnder the Cunningham test, a person has testamentary capacity when (1) she\nunderstands the nature of her act; (2) she knows the extent of her property; (3) she\nunderstands the proposed testamentary disposition; (4) she knows the natural objects of her\nbounty; and (5) the will represents her wishes. Cunningham v. Stender, supra.\nA.\nContestant contends that the judicial appointment of the conservator establishes that\ndecedent was \xe2\x80\x9cincapacitated\xe2\x80\x9d and, thus, that she lacked testamentary capacity. We are not\npersuaded.\nContestant first points to the language of \xc2\xa7 15-14-401(1)(b), C.R.S. 2003, which\nallows appointment of a conservator for one who is unable to manage property and business\naffairs because of inability \xe2\x80\x9cto effectively receive or evaluate information or both or to make\n5\n\n\x0cor communicate decisions\xe2\x80\x9d affecting her assets. He then points to the statutes that allow\nappointment of a guardian for an \xe2\x80\x9cincapacitated persons,\xe2\x80\x9d defined in \xc2\xa7 15-14-102(5), C.R.S.\n2003, as, in pertinent part, one who is unable \xe2\x80\x9cto satisfy essential requirements for physical\nhealth, safety, or self-care,\xe2\x80\x9d because of inability \xe2\x80\x9cto effectively receive or evaluate\ninformation or both or make or communicate decisions.\xe2\x80\x9d He argues that the provisions\ninclude similar phrases and that, as a result, the appointment of decedent\xe2\x80\x99s conservator\nestablishes that decedent was \xe2\x80\x9cincapacitated\xe2\x80\x9d when she wrote the will. This argument is\ncontrary to the explicit language of the statutes.\nWhen the meaning of a statute is plain and free from ambiguity, we may conclude\nthe legislature made a deliberate choice that was \xe2\x80\x9ccalculated to obtain the result dictated by\nthe plain meaning of the words,\xe2\x80\x9d Hendricks v. People, 10 P.3d 1231, 1238 (Colo. 2000)\n(quoting City & County of Denver v. Gallegos, 916 P.2d 509, 512 (Colo. 1996), and we give\neffect to that meaning without resorting to rules of statutory interpretation. In re Estate of\nDeWitt, 554 P.3d 849 (Colo. 2002).\nSection 15-14-401 pertains to the appointment of a conservator to ensure that assets\na person needs for her own support, care, education, health, and welfare, or for that of\nothers who are entitled to her support, are not wasted or dissipated. The appointment of a\nconservator does not include a finding of \xe2\x80\x9cincapacity.\xe2\x80\x9d In fact, when decedent wrote her\nwill, the version of \xc2\xa7 15-14-408 (6) then in effect provided that \xe2\x80\x9c[a]n order \xe2\x80\xa6determining\nthat a basis for appointment of a conservator\xe2\x80\xa6exists, has no effect on the capacity of the\nprotected person.\xe2\x80\x9d Colo. Sess. Laws 1979, ch, 451, \xc2\xa7 153-5-408(6) at 1626 (repealed effective\nJanuary 1, 20000. Similarly, under the current statute, \xc2\xa7 15-14-409(4), C.R.S. 2003, states that\nappointment of a conservator \xe2\x80\x9cis not a determination of incapacity.\xe2\x80\x9d\nThus, the statute explicitly states that findings that warrant appointment of a\nconservator do not equate to a determination of testamentary incapacity.\nHere, the trial court reached the same conclusion based on the holding in In re Estate\nof McCrone, 106 Colo. 69, 101 P.2d 25 (1940), and contestant argues that reliance was error.\nHowever, contestant also argues that the court should have applied the current statutes.\nBecause we conclude that the court\xe2\x80\x99s ruling was correct under those statutes, we need not\naddress contestant\xe2\x80\x99s argument concerning McCrone. See People v. Gresl, 89 P.3d 499, 2003 WL\n23095411 (Colo. App. No. 00CA1170, Dec. 31, 2003).\nB.\n6\n\n\x0cContestant also asserts that the trial court erred when it held that decedent had\ntestamentary capacity. We disagree.\nFindings of fact will not be set aside unless they are clearly erroneous. C.R.C.P. 52;\nMesa County Valley Sch. Dist. No. 51 v. Kelsey, 8 P.3d 1200 (Colo. 2000); In re Estate of Heyn, 47\nP.3d 724 (Colo. App. 2002); In re Estate of Perry, 33 P.3d 1235 (Colo. App. 2001).\nHere, the trial court applied and made findings appropriate to the Cunningham and\ninsane delusion tests, and there is substantial evidence in the record to support the court\xe2\x80\x99s\nfindings. We perceive no basis for overturning this ruling.\nC.\nContestant also argues that the will or, in the alternative, the trust is invalid because a\nprotected person cannot execute a valid will that includes a trust. Again, we are not\npersuaded.\nWhen a court appoints a conservator, the protected person\xe2\x80\x99s assets are vested in the\nconservator. As a result, the protected person cannot transfer assets to others, including an\ninter vivos trust. See \xc2\xa7 15-14-421, \xc2\xa7 15-14-422, C.R.S. 2003. Here, however, decedent had\ntestamentary capacity and, as a result, could bequeath assets to others, create a testamentary\ntrust, and bequeath some or all of her estate to such a trust. Because she did not transfer any\nassets during her lifetime, the conservatorship was not implicated. Therefore, we conclude\nthat, even if appointment of a conservator prevents a protected person from creating an\ninter vivos trust, it does not prevent a protected person who has testamentary capacity from\ncreating a testamentary trust.\nThe judgment is affirmed.\nNotes, Questions and Problems\n1. In Gallavan, the contestant appeared to want the court to establish a presumption of lack\nof mental capacity based upon the appointment of a conservator. If the court had ruled in\nfavor of the contestant, the decision might have negatively impacted persons with\ndisabilities. For instance, a mentally disabled person who receives SSI has to have a\nrepresentative payee. Should that status be enough for the person to be presumed mentally\nincompetent to execute a will or a testamentary trust? What about persons who have been\ndiagnosed with severe dementia?\n2. The will in Gallavan was submitted to informal probate. An increasing number of states\nhave statutes permitting informal probate. Informal probate allows the personal\n7\n\n\x0crepresentation to administer the decedent\xe2\x80\x99s estate without probate court supervision. The\nestate is closed when the representative files a sworn statement certifying that the decedent\xe2\x80\x99s\ndebts, expenses, and taxes have been paid and distributions have been made to the persons\nentitled to them.\n3. In Gallavan, the Court indicates that a person who is under a conservatorship may not\nhave the capacity to establish an inter vivos trust. Nonetheless, that same person may be\nlegally capable of creating a testamentary trust. What are some arguments that support the\ndifference in treatment?\n4. What are the pros and cons of requiring a testator to be of \xe2\x80\x9csound mind\xe2\x80\x9d? Does the\nGallavan case give any insight into determining when a person is of sound mind?\n5. Problems\nIn which of the following cases may the testator lack mental capacity to execute a will or\ntrust?\na) Sally had two daughters, Grace and Amanda. Sally\xe2\x80\x99s will contained the following language\n\xe2\x80\x9cI leave 80% of my estate in trust for my daughter Grace and the remaining 20% in trust for\nmy step-daughter, Amanda." Both Grace and Amanda were Sally\xe2\x80\x99s biological children.\nb) Frederick executed a will stating \xe2\x80\x9cI leave my entire estate to my three children, Darlene,\nMason and Paul.\xe2\x80\x9d Frederick only had two children, Darlene and Mason. Paul was Frederick\xe2\x80\x99s\npet monkey.\nc) Joshua inherited his family\xe2\x80\x99s farm located at 1120 Gates Mill Road. In 1997, the city seized\nthe farm because Joshua failed to pay the property taxes. Joshua claimed that he had receipts\nshowing that he had paid the taxes. Thus, he filed suit to regained ownership of the farm.\nJoshua lost his case, but vowed to never stop fighting. In 2009, Joshua executed a will\ncontaining the following provision, \xe2\x80\x9cI leave the farm located at 1120 Gates Mill Road to my\nson, Theodore.\xe2\x80\x9d\nd) Elvira was the victim of a scam in which she purchased the Golden Gate Bridge. In her\nwill Elvira stated, \xe2\x80\x9cI leave the Golden Gate Bridge to my son, Huey.\n\n8\n\n\x0c1.2.2. Insane Delusion\nA person may be mentally competent to create a testamentary trust. Nonetheless, the\ntestamentary trust may be invalid because it was the product of an insane delusion. In order\nto convince a court to invalidate a testamentary trust based on the testator\xe2\x80\x99s insane delusion,\nthe contestant must prove (1) the testator was suffering from a delusion that was insane and\n(2) the trust was a consequence of the insane delusion.\nAn insane delusion that may prevent a person from having the capacity to execute a\ntestamentary trust is a false belief based upon incidents that exist solely in the imagination of\nthe person suffering from the delusion. The \xe2\x80\x9cinsane\xe2\x80\x99 in insane delusion does not refer to a\nmedical condition. Thus, the testimony of a psychologist or psychiatrist is not necessary to\nprove it. For instance, one court has stated, \xe2\x80\x9cAn \xe2\x80\x98insane delusion\xe2\x80\x99 or \xe2\x80\x98monomania insanity\xe2\x80\x99 is\nnot a general defect of the mind, for the purposes of determining whether the delusion\noperated to invalidate a will; it is an insanity directed to something specific, that is, a\nparticular person or thing, and the testator can be laboring under the influence of an insane\ndelusion while otherwise acting or appearing competent.\xe2\x80\x9d Dougherty v. Rubenstein, 914 A.2d\n184 (Md. App. 2007). A delusion is insane even if there is some factual basis for the belief if\na rational person in the testator\xe2\x80\x99s position could not have drawn the conclusion the testator\nreached. See Restatement (Third) of Property: Wills and Other Donative Transfers \xc2\xa7 8.1, cmt.\ns. (2003). The testator\xe2\x80\x99s insane delusion must impact the manner in which she distributes her\nproperty. If an insane delusion is shown, but the delusion did not affect the dispositions, the\nwill and the testamentary trust stand.\nConsider the following example. After Maxwell\xe2\x80\x99s wife died in child birth, he believed\nthat the baby girl, Amanda, was the devil incarnate, so he sent her away to boarding school.\nMaxwell\xe2\x80\x99s priest and friends tried to convince him that Amanda was a good, well-behaved\nchild. However, Maxwell held on to his belief that Amanda was evil. Maxwell was delusion\nwith regards to his views about Amanda. That delusion had the potential to impair his\ncapacity to create a testamentary trust. If Maxwell told the lawyer creating his testamentary\ntrust to exclude Amanda as a beneficiary of the trust because Maxwell thought Amanda\nwould use his property to worship the devil, the one Maxwell regarded as Amanda\xe2\x80\x99s true\nfather, a court would probably decide that Maxwell\xe2\x80\x99s testamentary trust was a product of an\ninsane delusion. Thus, it would be invalidated because he lacked the necessary testamentary\n9\n\n\x0ccapacity to establish a trust. However, if Maxwell told the lawyer to exclude Amanda as a\nbeneficiary of the trust because Maxwell had already provide sufficient lifetime support for\nAmanda, the court would probably conclude that Maxwell\xe2\x80\x99s delusion did not influence his\ndecision to exclude Amanda as a beneficiary of the trust. Therefore, the trust would be\ndeclared valid.\nA Mistake vs. An Insane Delusion\nAn insane delusion is different from a mistake. An insane delusion is a belief that is\nnot susceptible to correction by showing the testator evidence indicating that his or her\nbelief is false. A mistake is a belief that is susceptible to correction if the testator is presented\nwith the truth. Courts usually do not reform or invalidate a testamentary trust because of a\nmistake, but courts do invalidate entire trusts or their provisions that result from an insane\ndelusion.\nInsane Delusion: Nicholas believes that his daughter, Taylor, is dead.\nTaylor comes to Nicholas\xe2\x80\x99 house to show him that she is still alive.\nNicholas believes that someone is impersonating Taylor, so he intentionally\nexcludes her as a beneficiary of his testamentary trust.\nMistake: Nicholas believes that his daughter, Taylor, is dead. Taylor is alive,\nbut\nNicholas does not discover that fact. Nicholas intentionally excludes Taylor\nhas a\nbeneficiary of his testamentary trust.\nTaylor will be able to successfully challenge the validity of the trust created as a result\nof the insane delusion. However, the trust created as a result of the mistake will be validated.\n\nIn re Estate of Squire, 6 P.3d 1060\nCARL B. JONES, Chief Judge:\nThis will contest involves a \xe2\x80\x9cpour over\xe2\x80\x9d will and a revocable trust executed by Betty\nLouise Squire six years before her death. The decedent had never married and was childless.\nThe contestants to this will and trust are the decedent\'s first cousins. In 1990, the decedent\nexecuted a living trust naming WestStar Bank of Bartlesville, Oklahoma (Bank) as Trustee\nand leaving the bulk of the decedent\'s residuary estate to three charities: the Washington\nCounty SPCA, the American Diabetes Association and Washington County Elder Care, Inc.\n10\n\n\x0cThe decedent also executed a \xe2\x80\x9cpour over\xe2\x80\x9d will which provided that any assets remaining in\nthe decedent\'s name at death would pass to the Trust for administration and distribution.\nThe first cousins filed a petition for letters of administration and determination of\nheirs asserting that the decedent had died intestate. WestStar filed its objection to the\npetition attacking the will executed by the decedent. The cousins contested the will and\nsought to set aside the Trust, claiming both documents to be the products of undue\ninfluence and an insane delusion. After a two-day trial, the trial court denied the cousins\'\npetition contesting the will and trust. The cousins appeal.\nIssues presented on review are: 1 whether the decedent had testamentary capacity at\nthe time she executed the will and trust; 2) whether the trust and will were a product of\nundue influence; and 3) whether the decedent was acting under an insane delusion at the\ntime she executed the will and trust. Probate proceedings are of equitable cognizance. While\nthe appellate court will study the whole record and weigh the evidence, the trial court\'s\nfindings will not be disturbed on review unless they are clearly against the weight of the\nevidence or some governing principle of law. When a will is offered for probate, the singular\nconcern of the court is: (a) whether the will has been executed with the requisite statutory\nformalities, (b) whether the testatrix was competent to make a will at the time it was made,\nand (c) whether it was the product of undue influence, fraud or duress. The significance of\nthis entire process is to ascertain and effectuate the decedent\'s intentions regarding the\ndisposition of her property. Matter of the Estate of Sneed, 953 P.2d 1111, 1151 (Ok., 1998).\nThe cousins assert that the decedent lacked testamentary capacity at the time she\nexecuted her will and trust. Relying on In re Estate of Lacy, 431 P.2d 366 (Ok. 1967) the\ncousins assert that the decedent made an unnatural disposition as she failed to mention the\n\xe2\x80\x9cobjects of her bounty\xe2\x80\x9d which in this case would have been her cousins. Although Lacy does\nnot hold that this alone is conclusive of no testamentary capacity, the cousins contend that\ncoupled with this failure is the medical evidence introduced that the decedent was a mentally\nill person and had been for many years.\nTestamentary capacity exists when a person has, in a general way, the faculty to\nappreciate the character and extent of the devised property, comprehends the nature of the\nrelationship between themselves and the objects of their bounty and perceives the nature\nand effect of the testamentary act. Whether one possesses testamentary capacity is a question\nof fact. When a person contests a testator\'s soundness of mind, the burden of persuasion\n11\n\n\x0crests upon that person. When a court ascertains a decedent\'s testamentary capacity, it is\nappropriate for it to consider evidence of the testator\'s mental capacity, appearance, conduct,\nhabits and conversation both before and after the will is executed. In re Estate of Lacy, supra.\nThe record reflects that the decedent remained in her family home until\napproximately six months prior to her death. One of the reasons the decedent was able to\nstay in her home was because pursuant to the trust the Bank paid the decedent\'s bills and\narranged for caretakers. She suffered from multiple health problems including diabetes and\npartial blindness. In addition, the decedent was treated for anxiety and depression by a\npsychiatrist in Bartlesville. In the psychiatrist\'s notes, references were made to a \xe2\x80\x9cfalling out\xe2\x80\x9d\nwith the decedent\'s cousins for various reasons during the late \'80s. Approximately one\nmonth before the execution of the will and trust, the decedent was hospitalized for an\ninsulin reaction and was confused. She was discharged to a geriatrics center until she could\nreturn to her home. At the time she executed the will and trust, October 30, 1990, she was\nstill at the geriatrics center. The medical records reflect from October 16, 1990 to November\n17, 1990, that the decedent was alert, oriented and frequently went out of the building for\nsocial activities. The record is devoid of anyone testifying that the decedent did not know\nher relatives, did not understand her property, or in any way appeared incompetent. After a\nreview of the record, we find that the trial court\'s decision that Betty Louise Squire was\npossessed of testamentary capacity at the time she executed her will and trust is not clearly\nagainst the weight of the evidence.\nRelying on In re Estate of Maheras, P.2d 268 (Ok., 1995) and In re Estate of Gerard, 911\nP.2d 266 (Ok., 1995) the cousins assert that they were entitled to a presumption of undue\ninfluence. They contend that the decedent did not have independent advice and that the\ntrust officer from WestStar used her influence over the decedent to benefit the bank. We do\nnot agree. The Oklahoma Supreme Court held in these two cases that a two-prong test must\nbe used to decide whether undue influence has tainted a will. First, there must be a\nrelationship which would induce a reasonably prudent person to repose confidence and trust\nin another. Second, the stronger party in the relationship must have assisted in the\npreparation of the testamentary instrument. It is undisputed that a confidential relationship\nexisted between the trust officer with WestStar and the decedent. However, the\ndistinguishing factor here is that the decedent approached WestStar and requested assistance\nin setting up the appropriate documents to manage her affairs. In fact, the decedent brought\n12\n\n\x0can unsigned will document dated 1987 to WestStar to assist in drafting the trust and will.\nThis unsigned document provided that she wanted to leave the majority of her estate to the\nthree charities. The trust officer opined at trial that the decedent\'s previous attorney had\ndrafted the unsigned will. No contradictory evidence was presented on the authorship of this\nunsigned will. Further, the trust officer testified that the decedent provided all instructions\nregarding the disposition of her assets. As previously stated, this Court will not disturb the\nfactual findings of a trial court unless they are clearly contrary to the weight of the evidence.\nWe find that the trial court correctly found that the will and trust were not the product of\nundue influence.\nFinally, the cousins assert that the decedent suffered from an insane delusion which\nmaterially affected the execution of the will and trust. The cousins contend that the decedent\nbelieved that people were stealing from her and that her cousins were after her money. An\ninsane delusion connotes a belief in things which do not exist and which no rational mind\nwould believe to exist. Winn v. Dolezal, 355 P.2d 859 (Ok., 1960). Such a delusion is a false\nbelief, which would be incredible in the same circumstances to the victim if she were of\nsound mind and from which she cannot be dissuaded by any evidence or argument. We\nmust determine whether the decedent\'s condition at the time of the execution of the will and\ntrust was such to show that the disposition which she made was caused by a delusion and\nbut for the delusion the disposition of the property would have been otherwise. This\ndelusion, if it existed, must have existed at the time of the execution of the will. Lynn v. Ada\nLodge No. 146, 398 P.2d 491, 496 (Ok., 1965)\nThe cousins emphasize that until 1983 the decedent had a very good relationship\nwith her cousins. After the decedent and one of her cousins took a trip together, the\ndecedent began to withdraw from this relative. The discord between this cousin arose from a\nmisunderstanding over the transfer of the decedent\'s funds shortly before the 1983 trip. The\ndecedent discussed this with her psychiatrist who noted that rifts between relatives occur all\nthe time. No notation was found in his notes referring to an insane delusion. None of her\ndoctors ever noted on her charts that she suffered insane delusions. In fact, one doctor in\n1987 specifically stated that while the patient was depressed and anxious, she did not suffer\nfrom hallucinations or insane delusions. We find that the trial court correctly found that the\ndecedent was not suffering from an insane delusion at the time she executed her will and\ntrust. Accordingly, the trial court is affirmed.\n13\n\n\x0cAFFIRMED\nNotes, Questions and Problems\n1. In Squire, the Court stated that the testator\xe2\x80\x99s behavior before and after the execution of the\nwill was relevant to her mental capacity. Why should behavior after the execution of the will\nmatter?\n2. A pour over will is used in conjunction with an inter vivos trust to avoid probate. The\nsettlor creates the trust during her lifetime and places very little assets in it. Then, she\nexecutes a pour over will that bequests money or property to the existing trust. When the\ntestator dies, the money or property from the will pours over into the trust.\n3. If a person executes a will when he is young and healthy, it is difficult for the court to set\nit aside because of an insane delusion. Prior to committing suicide, Roger Bauer wrote a\nletter to his girlfriend containing the following statement, \xe2\x80\x9cMy primary reason for doing this\nis a near complete lack of family love. It is something that will always be missing from my\nlife. I will never be able to compensate for it no matter what.\xe2\x80\x9d In the last sentence of the\nletter Bauer left everything to his girlfriend who submitted the letter for probate as a\nholographic will. Bauer\xe2\x80\x99s sister contested the will claiming that his belief that he lacked the\nlove of his family was an insane delusion. The Court found that Bauer had not suffered from\nan insane delusion. Bauer v. Estate of Bauer, 687 S.W.2d 410. If the Court concluded that\nBauer was suffering from a delusion with respect to his family, would that be sufficient to\ninvalidate the will under the doctrine of insane delusion.\n3. Problems\nIn which of the following cases is the court likely to invalidate the will based upon an insane\ndelusion?\na) Mary heard voices telling her that her son, Billy, was poisoning her.\n\nThus, Mary\n\ndisinherited Billy and left all of her money to charity.\nb) Simon thought that his daughter, Maude, was stealing from him. When Simon confronted\nMaude, she denied the accusations. Simon could not find evidence of Maude\xe2\x80\x99s stealing, but\nhe believed that she was a thief because she had red hair. Simon established a trust on behalf\nof his two other children and excluded Maude as a beneficiary. After Simon died, his\nexecutor discovered that Maude had been stealing from Simon.\nc) Craig and Lucy were married for over 50 years. When Craig suspected that she was having\nan affair, Craig told his friends that he planned to disinherit her. Craig claimed that Lucy was\n14\n\n\x0cslipping men down the chimney and having sex with them in the attic. Lucy was injured in a\ncar accident and received a large case settlement. Then, Craig told his friends that Lucy did\nnot need his money, so he was not going to leave her any thing. Craig also stated that if Lucy\nwas broke he would not leave her a penny of his money to spend on her men.\nd) Rufus had black hair and brown eyes. Rufus married Shelley, who also had black hair and\nbrown eyes. When Shelley gave birth to a little boy, Danny, who had blonde hair and blue\neyes, Rufus was convinced that he was not the father of the child. In order to convince\nRufus that Danny was his son, Shelley went on a talk show and had a DNA test conducted.\nThe DNA test proved that Rufus was Danny\xe2\x80\x99s father. However, Rufus believed that the\nDNA test had been rigged to increase the show\xe2\x80\x99s television ratings. Shelley was never able to\nconvince Rufus that Danny was his child, so the couple divorced. Rufus executed a will\nstating, \xe2\x80\x9cSince I am childless, I leave my entire estate to the Red Cross.\xe2\x80\x9d\n\n1.2.3. Undue Influence\nThe requirements that the testator is mentally competent and not suffering from an\ninsane delusion are designed to insure that the testator\xe2\x80\x99s will or trust is a product of a sound\nmind. However, a person who has a sound mind is still susceptible to being influenced by\nother people. Estate planning is often a family affair. Thus, persons who stand to benefit\nfrom the testator\xe2\x80\x99s actions may intentionally or inadvertently influence the manner in which\nthe testator disposes of her property. The law permits the testator to be influenced by the\nactions and opinions of others. Nonetheless, if that influence causes the testator to make a\ndisposition that the testator would not otherwise have made, the law considers that influence\nto be undue. Courts will strike the terms of a testamentary trust that results from undue\ninfluence, and allow the remaining terms to stand if they can be reasonably separated from\nthe invalid terms without destroying the testator\xe2\x80\x99s intent or interfering with the testamentary\nplan.\nThe test for undue influence is whether someone exercised so much control over the\ntestator\xe2\x80\x99s mind that the person overcame the testator\xe2\x80\x99s free will and caused the testator to do\nwhat he would not have otherwise done but for the person\xe2\x80\x99s influence. The person\ncontesting the testamentary trust has the burden of proving the following: (1) that the\ntestator was susceptible to undue influence or domination by another; (2) that the persons\nalleged to have committed the undue influence had the opportunity to exercise it; (3) that\n15\n\n\x0csuch person had a disposition to influence for the purpose of personal benefit; and (4) that\nthe provisions of the trust appear to be unnatural and the result of such influence. Undue\ninfluence is often difficult to prove. In some cases, the burden of proof shifts to the\nproponent of the testamentary trust. Once the burden shifts, that persons must show a lack\nof undue influence. The factors that cause the burden of proof to shift include (1) the\nexistence of a confidential relationship; (2) a testator with a weakened intellect; and (3) a\ntrust that gives the person with the confidential relationship the bulk of the estate.\nConfidential relationships like attorney-client and caretaker-patient are usually enough to\nshift the burden of proof. In fact, many courts have held that, if an attorney, who is not\nrelated to the testator, benefits from a testamentary trust, a presumption of undue influence\noccurs. The attorney must present clear and convincing evidence to rebut the presumption.\n\nIn re Estate of Johnson, 340 S.W.3d 769\nCATHERINE STONE, Chief Justice.\nAppellants\' motion for rehearing is denied. This court\'s opinion and judgment dated\nDecember 1, 2010 are withdrawn, and this opinion and judgment are substituted. Our prior\nopinion contained an incorrect reference to Laura Johnson serving as co-trustee of a\nfoundation as opposed to Laura Johnson serving as co-trustee of a management trust. We\nsubstitute this opinion to delete the erroneous factual reference which does not affect this\ncourt\'s prior analysis.\nThis appeal arises from a probate proceeding in which a jury found Belton Kleberg\nJohnson (\xe2\x80\x9cB\xe2\x80\x9d) executed certain wills and trusts as a result of undue influence. The trial court\nentered judgment on the verdict, denying probate of certain wills and admitting B\'s 1997 will\nto probate. Additionally, the judgment invalidated certain trust documents. On appeal, the\nindependent executor of B\'s estate, B\'s widow, and a co-trustee of a trust created by B,\nchallenge the sufficiency of the evidence to support the jury\'s finding of undue influence. We\naffirm the trial court\'s judgment.\nBACKGROUND\nA. The Family Members\nB was a descendent of famed King Ranch heritage. He and his first wife, Patsy,\nwhom he divorced in 1987, were the parents of three children: Cecilia McMurrey (\xe2\x80\x9cCeci\xe2\x80\x9d),\nSarah Pitt (\xe2\x80\x9cSarah\xe2\x80\x9d), and Kley Johnson (\xe2\x80\x9cKley\xe2\x80\x9d). Kley, who died in a car accident in 1991,\nwas married to Cecilia Hager (\xe2\x80\x9cHager\xe2\x80\x9d). Alice Truehart Johnson and Henry Kleberg\n16\n\n\x0cJohnson are Kley and Cecilia\'s children. Sarah married Steven Pitt, and Sarah Spohn Kleberg\nPitt, Stephen McCarthy Pitt, Jr., and Allegra Elizabeth McCarthy Pitt are their children. Ceci\nmarried Mark McMurrey, and Harry Bennett McMurrey, Belton Kleberg McMurrey, and\nEstella Lewis McMurrey are their children.\nLynne Johnson was B\'s second wife. They were married in February of 1991, and\nLynne died of cancer in January of 1994.\nLaura Johnson was B\'s third wife. B met Laura in Hong Kong in January of 1994\nwithin days after Lynne\'s death. At the time, Laura was still married to her first husband,\nwho also was her business partner; however, they had been separated for several years.\nLaura\'s divorce from her first husband was final in January or April of 1996, and she married\nB on November 8, 1996.\nB. The Estate Planning Documents\nOver the course of at least four decades, B engaged in extensive estate planning\nactivity with the aid of various professionals. The following individuals were involved at\nvarying times in B\'s estate planning: (1) Ed Copley\xe2\x80\x94an estate planning attorney B hired in\n1991; (2) Robert Phelps\xe2\x80\x94a generational planning specialist with J.P. Morgan who was also\nan attorney; (3) Stacy Eastland\xe2\x80\x94another estate planning attorney B hired in 1997; and (4)\nPeter Milton\xe2\x80\x94a loan officer with J.P. Morgan who subsequently became an investment\nadvisor for B\'s foundation.\nFollowing B\'s death in 2001, Copley obtained an order admitting to probate B\'s 1999\nwill and 2000 Codicil and was named as the independent executor of B\'s estate. B\'s children\nand grandchildren challenged that order in the suit giving rise to this appeal. A review of B\'s\nestate planning documents for the decade preceding his death is helpful to understanding the\nparties\' claims.\nB\'s 1991 will created a life estate for his second wife, Lynne, with the remainder\ngoing into trust for B\'s grandchildren. The 1991 will list three specific charities as contingent\nbeneficiaries in the event all of B\'s descendants predeceased him. B\'s 1993 will was similar to\nhis 1991 will; however, a subsequent codicil changed the remainder beneficiaries from B\'s\ngrandchildren to his children. B\'s 1995 will left $1 million net of tax in trust to each\ngrandchild with the remainder going to five specific charities.\nB\'s 1997 will left his estate to a 1997 Management Trust. In the 1997 Management\nTrust, $1,000,000 net of tax was left in trust for each grandchild. The remainder of the estate\n17\n\n\x0cwas to be held in trust for Laura for her life. Laura had a power of appointment and could\nleave up to one-half of the remaining estate to any or all of B\'s descendants, and the other\none-half of the remaining estate (or the entire remainder if Laura did not exercise the power\nof appointment) was to be distributed to the same five specific charities listed in the 1995\nwill.\nIn 1989, B created Johnson Properties. B was the general partner of Johnson\nProperties, and the trusts of B\'s children were limited partners. Johnson Properties owned a\nlimited partnership interest in SA\xe2\x80\x932000, which owned the Hyatt Hotel on the San Antonio\nRiver Walk. Upon the dissolution of Johnson Properties in 1998, B and the trusts\nindividually owned the partnership interests in SA\xe2\x80\x932000. B formed a new family limited\npartnership, BKJ Interests, to which he transferred his King Ranch royalties and the interest\nin SA\xe2\x80\x932000 which he formerly owned through Johnson Properties. The record is replete\nwith evidence that the effect of the dissolution of Johnson Properties on B\'s estate plan was\nintentionally kept secret from Ceci and Sarah until B\'s death.\nAround the same time as the Johnson Properties dissolution, B created the 1998\nFamily Trust, which eventually obtained a portion of B\'s interest in BKJ Interests. B\'s 1998\nwill left his estate to a 1998 Management Trust. In the 1998 Management Trust, an aggregate\nof $7 million was left in trust for B\'s grandchildren; however, that amount was offset by the\nfair market value of the assets held in the 1998 Family Trust. The remainder of the estate\nwas held in trust for Laura for her life. Laura then had a power of appointment similar to the\npower contained in the 1997 will, except the remaining one-half (or the entire remainder if\nLaura did not exercise the power of appointment) was distributed to the Belton Kleberg\nJohnson Foundation. Although the trust lists some organizations which B desired to be the\nprimary focus of distributions from the foundation, the trustee of the foundation ultimately\ncontrolled the distributions.\nB\'s 1999 will left his estate to the 1998 Management Trust as amended and restated\nin 1999. The 1998 Management Trust as restated no longer mentioned a distribution in trust\nfor the grandchildren. The entire estate is instead held in trust for Laura for her life, and the\nprovisions upon her death regarding the remainder were unchanged from the 1998\nManagement Trust.\nC. The Attorneys and the Claims\nThe Lawter Firm represented the following plaintiffs during the course of the\n18\n\n\x0cunderlying controversy: (1) B\'s daughter Sarah, individually and as a beneficiary of her 1962,\n1970, 1976, and 1990 trusts; (2) B\'s daughter Ceci, individually and as a beneficiary under her\n1962, 1970, 1976, and 1996 trusts; (3) B\'s daughter-in-law Hager, individually, as successorin-interest to Kley, as executrix of Kley\'s estate, as co-trustee of Kley\'s 1970 trust, and as\nbeneficiary of the trusts created under Kley\'s will; (4) B\'s granddaughter Alice, individually\nand as next friend for her brother Henry; (5) Houston Trust Co., as trustee of the 1962\ntrusts of Sarah and Ceci and their descendants, as co-trustee of the 1970 trusts for Sarah and\nCeci and their descendants, and as trustee of the 1990 and 1996 management trusts; and (6)\nCarper Capt, as co-trustee of the 1970 trust for Hager and Kley\'s descendants. The Hartnett\nFirm represented all of B\'s grandchildren with the exception of Alice and Henry.\nEach of the individual plaintiffs and all of the trustee plaintiffs sued B for breach of\nhis fiduciary duties in relation to the children\'s trusts and the dissolution of Johnson\nProperties. Each of the individual plaintiffs also sued B\'s widow Laura for tortiously\ninterfering with their inheritance rights and contested the validity of the will and codicil\nadmitted to probate. They further sought to probate several alternative wills and codicils. B\'s\ngrandchildren also sued J.P. Morgan for breaching its fiduciary duties arising from the 1998\nFamily Trust. Finally, Sarah and Ceci contested the management trusts. All of the plaintiffs\nwill collectively be referred to herein as \xe2\x80\x9cAppellees.\xe2\x80\x9d\nUNDUE INFLUENCE\xe2\x80\x94SUFFICIENCY OF THE EVIDENCE\nA. Law on Undue Influence\n\xe2\x80\x9c[U]ndue influence implies the existence of a testamentary capacity subjected to and\ncontrolled by a dominant influence or power.\xe2\x80\x9d Rothermel v. Duncan, 369 S.W.2d 917, 922\n(Texas 1963). Rothermel [is] the seminal Texas will contest case\xe2\x80\x9d in which the Texas Supreme\nCourt established a three-part test to determine whether undue influence exists. Estate of\nDavis v. Cook, 9 S.W. 3d. 288, 292 (Tex. App.-San Antonio 1999, no pet). To prevail on an\nundue influence claim, the contestant must prove: (1) the existence and exertion of an\ninfluence; (2) the effective operation of such influence so as to subvert or overpower the\nmind of the testator at the time of the execution of the testament; and (3) the execution of a\ntestament which the maker thereof would not have executed but for such influence.\nRothermel, 369 S.W. 2d at 922; Estate of Davis, 9 S.W. 3d at 292-93. The burden of proving\nundue influence is upon the party contesting its execution. Rothermel, 369 S.W.2d at 922;\nEstate of Davis, 9 S.W. 3d.at 293. It is, therefore, necessary for the contestant to introduce\n19\n\n\x0csome tangible and satisfactory proof of the existence of each of the three elements. Rothermel,\n369 S.W.2d at 922; Estate of Davis, 9 S.W. 3d at 293.\nNot every influence exerted by a person on the will of another is undue. Rothermel,\n369 S.W.2d at 922; Estate of Davis, 9 S.W. 3d.at 293. Influence is not undue unless the free\nagency of the testator was destroyed and a testament produced that expresses the will of the\none exerting the influence. Rothermel, 369 S.W.2d at 922; Estate of Davis, 9 S.W. 3d.at 293.\nOne may request or even entreat another to execute a favorable dispositive instrument, but\nunless the entreaties are shown to be so excessive as to subvert the will of the maker, they\nwill not taint the validity of the instrument with undue influence. Rothermel, 369 S.W.2d at\n922. \xe2\x80\x9cInfluence that was or became undue may take the nature of, but is not limited to,\nforce, intimidation, duress, excessive importunity[,] or deception used in an effort to\novercome or subvert the will of the maker of the testament and induce the execution thereof\ncontrary to his will.\xe2\x80\x9d Id.\nThe exertion of undue influence is usually a subtle thing, and by its very nature\nusually involves an extended course of dealings and circumstances. Id. Undue influence may\nbe shown by direct or circumstantial evidence, but will usually be established by the latter.\nId.; Estate of Davis, 9 S.W. 3d.at 293 \xe2\x80\x9c[A]ll of the circumstances shown or established by the\nevidence should be considered; and even though none of the circumstances standing alone\nwould be sufficient to show the elements of undue influence, if when considered together\nthey produce a reasonable belief that an influence was exerted that subverted or\noverpowered the mind of the testator and resulted in the execution of the testament in\ncontroversy, the evidence is sufficient to sustain such conclusion.\xe2\x80\x9d Rothermel, 369 S.W.2d at\n922. Circumstances relied on as establishing the elements of undue influence must be of a\nreasonably satisfactory and convincing character, and they must not be equally consistent\nwith the absence of the exercise of such influence. Id.; Estate of Davis, 9 S.W. 3d.at 293. \xe2\x80\x9cThis\nis so because a solemn testament executed under the formalities required by law by one\nmentally capable of executing it should not be set aside upon a bare suspicion of\nwrongdoing.\xe2\x80\x9d Rothermel, 369 S.W.2d at 922-23.\nB. Evidence on Elements of Undue Influence\nAlthough the parties cite cases in support of their respective positions, no two cases\ninvolving undue influence are alike, and each case must stand or fall depending upon the\nsufficiency of the facts proven. Id at 921. Attempting to analyze each item of evidence relied\n20\n\n\x0cupon by the parties would unnecessarily lengthen an opinion. Id. That is especially true in\nthis case which took four months to try and resulted in a voluminous record. Although we\ndo not attempt to summarize all of the evidence, we discuss at length some of the evidence\nsupporting the jury\'s finding as to each of the three elements necessary to prove undue\ninfluence.\n1. Overpowering the Testator\'s Mind\nWhere there is competent evidence of the existence and exercise of undue influence,\nthe issue as to whether undue influence was effectually exercised necessarily turns the inquiry\nand directs it to the state of the testator\'s mind at the time of the execution of the testament,\nsince the question as to whether free agency is overcome by its very nature comprehends\nsuch an investigation. Id at 923. \xe2\x80\x9cThe establishment of the subversion or overpowering of\nthe will of the testator is generally based upon an inquiry as to the testator\'s mental or\nphysical incapacity to resist or the susceptibility of the testator\'s mind to the type and extent\nof the influence exerted.\xe2\x80\x9d Id. \xe2\x80\x9cWords and acts of the testator may bear upon his mental\nstate.\xe2\x80\x9d Id. \xe2\x80\x9cLikewise, weakness of mind and body, whether produced by infirmities of age or\nby disease or otherwise, may be considered as a material circumstance in establishing this\nelement of undue influence.\xe2\x80\x9d Id.\nConflicting expert testimony was presented regarding B\'s susceptibility to undue\ninfluence. The evidence established that B was an alcoholic, and psychological and medical\ntests showed that the alcohol had an adverse effect on his mental state. Although B received\nboth in-patient and out-patient alcohol rehabilitation services several times before his\nmarriage to Laura, the record contains no evidence that Laura made any effort to stop B\'s\ndrinking, which he admitted was on-going when he was hospitalized in 2000 and diagnosed\nwith pancreatic cancer.\nDr. Christopher Ticknor, a psychiatrist called by the Appellees, met B while Dr.\nTicknor was treating B\'s son, Kley. Ticknor described the medical tests performed on B in\n1990 during one of his rehabilitation efforts. The tests showed organic brain\nsyndrome/memory dysfunction. Hospital records from 1997 showed a history of continued\ndrinking, including a two-week binge just a few days before the hospitalization. The 2000\nmedical records also included evidence of an on-going history of drinking. Although the\npsychiatrist who saw B in 2000 did not recommend in-patient treatment, his notes reflect a\nconcern about B\'s drinking, recommending B stop drinking or seek treatment.\n21\n\n\x0cRichard Coons, another psychiatrist called by the Appellees, testified that B feared\nabandonment, having lost his mother while he was young. Dr. Coons opined that B feared\nabandonment by Laura. Dr. Coons further opined that B\'s permanent cognitive defects,\ncontinued drinking, and personality features caused him to be vulnerable to undue influence.\nFinally, William Dailey, a neuropsychologist called by the Appellees, testified that the\n1990 tests showed B had significant memory deficit. Dailey opined that the testing was valid\nand that the decline in B\'s cognitive function increased his vulnerability to undue influence.\nRichard Fulbright, a clinical neuropsychologist called by the Appellants, did not\nprovide an opinion on undue influence. Edgar Nace, a psychiatrist called to testify by the\nAppellants, testified that B was not unduly influenced. Nace\'s testimony, however, did not\ndifferentiate between an expert medical opinion regarding undue influence and a jury\'s\nfinding of undue influence. An expert\'s medical opinion is based on a person\'s mental\nsusceptibility to undue influence independent of the facts, while a jury\'s finding of undue\ninfluence takes into consideration the actual facts of the case in determining whether a\nperson was, in fact, unduly influenced. Moreover, at his deposition, Nace was asked\nhypothetically whether Laura could have unduly influenced B by putting a gun to his head.\nIn his deposition, Nace responded that he was unsure; however, at trial, Nace testified the\ngun example would be an example of undue influence based on common sense. The jury\ncould consider these conflicts in Nace\'s testimony in weighing his credibility.\nThe jury was required to weigh the foregoing expert testimony and determine the\ncredibility of the testimony based on the experts\' challenges to each others\' opinions and\nextensive cross-examination challenging each expert\'s opinion. See City of Keller, 168 S.W. 3d\nat 819 (jurors may choose to believe one witness and not another and determine the weight\nto be given the evidence). Based on the expert testimony, the jury could have found that B\nwas susceptible to undue influence, and given his on-going history of alcoholism, ample\nopportunity existed to unduly influence B while he was drinking.\n2. Existence & Exertion of an Influence\n\xe2\x80\x9c[T]he establishment of the existence of an influence that was undue is based upon\nan inquiry as to the nature and type of relationship existing between the testator, the\ncontestants[,] and the party accused of exerting [the] influence.\xe2\x80\x9d Rothermel, 369 S.W.2d at 923.\nSimilarly, establishment of the exertion of such influence is generally predicated upon an\ninquiry about the \xe2\x80\x9copportunities existing for the exertion of the type of influence or\n22\n\n\x0cdeception possessed or employed, the circumstances surrounding the drafting and execution\nof the testament, the existence of a fraudulent motive, and whether there has been an\nhabitual subjection of the testator to the control of another.\xe2\x80\x9d Id.\nAlthough several business associates testified that B made his own decisions and\ncould not be controlled, the vast majority of those business associates testified that B either\nnever drank or was never intoxicated in their presence. As a result, these associates were\nunaware of how B would respond to influence exercised while he was drinking or\nintoxicated. The jury would have the right to consider whether in a period of intoxication B\'s\notherwise strong intellect yielded to unduly exerted importunities. See Craycroft v. Crawford,\n285 S.W. 275, 278 (Tex. 1926).\nEvidence was presented that B drank alcoholic beverages during his taped interviews\nwith Martin Booth, who was writing a book about B\'s life. In one interview excerpt in which\nthe jury could infer B was intoxicated, the following exchange occurred:\nMARTIN BOOTH: You were officially engaged in the eyes of the world. Everybody\nknew about it.\nLAURA JOHNSON: A tiny\xe2\x80\x94tiny, tiny diamond, as you can see.\nMARTIN BOOTH: Yes, a minute diamond. And then you set a wedding date,\npresumably.\nLAURA JOHNSON: Yes.\nMARTIN BOOTH: Which was when?\nLAURA JOHNSON: Which was the 8th of November, with 8 being the lucky\nChinese number, 8th of November, nineteen ninety\xe2\x80\x94what year, Darling?\nB JOHNSON: What\xe2\x80\x94when was it?\nLAURA JOHNSON: When was it Darling?\nB JOHNSON: I don\'t\xe2\x80\x94\nLAURA JOHNSON: You have two strikes and you\'re out.\nB JOHNSON: It was three\xe2\x80\x94three from \'97, wasn\'t it?\nLAURA JOHNSON: No. Two strikes and you\'re out.\nB JOHNSON: \'96\nLAURA JOHNSON: Oh, good boy, you can stay in the game. You can come home\nwith me.\nAt trial, this clip was played for Howard Nolan, the president of United Way of San\n23\n\n\x0cAntonio at the time B was asked to serve as chair of the United Way campaign. Nolan stated\nthat he was uncertain if B was drinking during the taping, but it did not sound like the B he\nknew. The jury was free to conclude from this taped excerpt that B was intoxicated.\nSeveral of the employees who worked in B\'s office, including Rita Sullivan and\nMadeleine Sandefur, testified regarding B\'s on-going drinking, as did his daughters and sonsin-law. Ceci testified that B would disappear for weeks when he was on a binge and could\nwind up in a different county, state, or country. Testimony was introduced that any flight B\nchartered was stocked with vodka, and in a nine-month period in 1999, B spent almost\n$7,000 on liquor and wine. Evidence was also introduced about B\'s mental abilities while\nintoxicated. For example, several witnesses testified that B would call late at night or early in\nthe morning after he had been drinking and want to have long, rambling conversations. Rita\nSullivan testified that B called her at 2:00 a.m. to ask her how to use the remote control to\nthe television. Sullivan also called B\'s attorney for advice when B called Sullivan while\nintoxicated to obtain a $200,000 nonrefundable check to purchase a house. Martin Booth\ntestified that B called him one night while intoxicated to report an improvement in his health\nand then called again the following day and repeated his report. Ceci testified that following\nhis drinking binges, B would be depressed and contrite. The book written by Booth stated\nthat B\'s drinking caused him problems, recounting that his fellow directors on AT & T\'s\nboard of directors became concerned about his drinking, and B missed a party in his honor\nafter he became intoxicated while drinking on a train on his way to the party. One time B\nordered an employee to purchase tickets to Santiago, Chile, but when the employee called B\nabout going to the airport, B had no recollection of requesting the trip. In contrast to this\nevidence of B\'s significant drinking and its effect on his conduct, Laura denied that B had a\ndrinking problem or was ever intoxicated in her presence.\nCeci also testified that before B married Laura the family was traditionally informed\nof B\'s estate planning. Ceci testified that B did not keep his estate plan a secret, and they\napproached the plan as a team. After B met Laura, however, the evidence established that a\ndecision was made during the course of the estate planning meetings not to tell Ceci and\nSarah about the dissolution of Johnson Properties or the formation of the 1998 Family\nTrust. Notes from estate planning meetings and telephone conferences contained numerous\nstatements by the estate planning professionals reassuring and encouraging B not to disclose\nthe estate plan to Ceci and Sarah.\n24\n\n\x0cEvidence was admitted that when Stacy Eastland was first considering the family\nlimited partnership structure for the estate, the children were included in the partnership.\nHowever, in mid-July of 1997, the estate planning notes reflect that Ceci and Sarah were to\nbe left out because they were \xe2\x80\x9cturning against\xe2\x80\x9d B. B was admitted to a hospital in Hong\nKong on July 23, 1997. The hospital records reflect that B had been on a two-week drinking\nbinge only days before his admission into the hospital. Around this same time, Eastland\ntestified that B\'s comments during a telephone conference were not ordinary, and he could\nhave been intoxicated, so they decided to re-do the phone call. Peter Milton from J.P.\nMorgan previously had told Eastland to call B in the morning because of his excessive\ndrinking.\nAppellees contend the evidence also established a habitual subjection of B to Laura\'s\ncontrol. Although B had a prenuptial agreement with his second wife, Lynne, Laura refused\nto consider a prenuptial agreement, and B expressed concern that his insistence on a\npremarital agreement would seriously interfere with their relationship. B discussed his estate\nplan with Laura prior to their marriage, and Laura attended numerous estate planning\nmeetings. Although Laura testified that she did not pay attention and was not engaged\nduring the meetings, other estate planning professionals at the meetings testified that Laura\nwas attentive and made comments.\nLaura also tried to suggest to the jury that she was not a businesswoman as a reason\nfor her lack of involvement, but several witnesses who were B\'s business associates testified\nthat she was a smart businesswoman. Laura owned or co-owned several businesses in Hong\nKong before she met B, and she helped run those businesses. One of those businesses was a\npub called Mad Dogs. B invested with Laura to open a Mad Dogs at the Hyatt in San\nAntonio, and B loaned the business $1.4 million. After B died, a settlement was reached in\nwhich B\'s estate was paid only approximately $.50 for each dollar loaned and B\'s estate\nrelinquished the ownership interest B had in the business. While negotiating the settlement,\nMilton sent an email noting the loan was unsecured. In the email, Milton stated, \xe2\x80\x9cBelieve me\nB Johnson screwed this up to a fair-thee-well as we used to say up east.\xe2\x80\x9d In another email,\nMilton commented, \xe2\x80\x9cI am a little annoyed that I didn\'t know how well financed Mad Dogs\nwas. On the other hand I think that we have done more than B Johnson would have done to\nprotect his assets; he was not good about separating his love from his assets. That is a direct\nquote from him.\xe2\x80\x9d Although Laura denied negotiating the compromise with regard to Mad\n25\n\n\x0cDogs, another email from Milton to Copley discussing the negotiation of the compromise\nrefers to a meeting with Laura and another person. In the email, Milton stated, \xe2\x80\x9cB should\nnever have given this kind of money to Mad Dogs of San Antonio. I think it was love not\nsense.\xe2\x80\x9d\nPrior to B and Laura\'s marriage, one note by Copley stated that Laura wanted to\nknow what the children were getting under the estate plan. One letter summarizing certain\nestate planning documents had writing in the brown felt tip pen B traditionally used, but also\nhad writing in a red pen. The jury could infer from the evidence and testimony that Laura\nhad reviewed the document and made comments.\nOn a few occasions, B requested that Copley investigate whether the King Ranch\nroyalties and a house in Cabo San Lucas could be left to his children, but subsequently called\nand stated that he changed his mind. The jury could infer that B changed his mind after\ndiscussions with Laura. With regard to the house in Cabo San Lucas, Laura testified that B\nimmediately rejected Sarah\'s request that the house be left to the daughters/grandchildren\nfor tax reasons; however, the evidence established that B asked Copley to research the issue\nand had not made an immediate decision. With regard to the King Ranch royalties, evidence\nwas presented that B stated in a conversation with his children in 1999 that the King Ranch\nroyalties were to be kept in the family, and that Laura, who overheard the discussion, stated\nshe would never take a family heirloom. By 1999, however, the King Ranch royalties had\nbeen transferred to BKJ Interests, and under the estate plan, the King Ranch royalties would\nnot remain in the family but would eventually be controlled by the foundation. Evidence was\npresented that in 2000 B again broached Copley with the idea of leaving the King Ranch\nroyalties to the children. Copley sent an email regarding his conversation with B about this\nrequest in which Copley stated leaving the King Ranch royalties to the children \xe2\x80\x9cwould\nrequire an audit of his estate, whereas, at the present time, it is a non-audit.\xe2\x80\x9d At trial,\nhowever, Copley stated that a \xe2\x80\x9cslight chance\xe2\x80\x9d existed that leaving the King Ranch royalties\nto the children would enhance \xe2\x80\x9cthe possibility of an audit.\xe2\x80\x9d Moreover, in his letter to B\nregarding the manner in which such a transaction could be structured, Copley spent\nconsiderable time discussing the tremendous tax consequences of the transaction and\nconcluded, \xe2\x80\x9cthe tax cost is heavy.\xe2\x80\x9d When Eastland was asked, however, whether there would\nhave been \xe2\x80\x9ctax efficient ways\xe2\x80\x9d to transfer the King Ranch royalties to the children, he\nresponded that there were, and he would never have told B not to leave the King Ranch\n26\n\n\x0croyalties to the children. Moreover, evidence was presented from which the jury could find\nthat Copley represented Laura on several legal matters and could have a conflict of interest\nin providing advice that would result in assets being left to the children, thereby diminishing\nthe assets in the life estate left to Laura.\nLaura also retained the family scrapbooks and photo albums, claiming that B did not\nwant Ceci and Sarah to have them until after Patsy died; however, the evidence established\nthat Laura did not return the family scrapbooks and photo albums even after Patsy died, but\nkept possession of them for the duration of the trial. Evidence also was presented that Laura\nrefused to give B\'s granddaughter, Alice, a silver spoon set that B wanted her to have.\nAlthough Laura testified that the attorneys had told her not to give away any of the estate\nassets because of the pending litigation, evidence established that she gave items belonging\nto the estate to other non-family members.\nPrior to meeting Laura, B was an avid hunter and often hunted with his children and\ngrandchildren. As the book on B\'s life stated, \xe2\x80\x9cB lived to hunt.\xe2\x80\x9d After meeting Laura, B\nrarely hunted. In one of his notes to his employee Madeleine Sandefur, B stated that dove\nhunting continued to be a problem for Laura. B was scheduled to hunt on property\nbelonging to his ranch manager, Claude Johnson; however, the hunt did not occur after\nClaude expressed his concerns about offending Laura. Although B issued a press release and\nwas quoted in a newspaper saying that he purchased Black Creek Ranch intending to\ncontinue its commercial hunting operations, to continue the tradition of South Texas\nhunting, and to hunt with his grandchildren, no hunting was permitted on Black Creek after\nthe first year\'s commercial commitments were fulfilled. Although Laura testified that B and\nshe agreed before Black Creek was purchased to end the hunting, Laura\'s testimony was\ninconsistent with the newspaper accounts of B\'s remarks. Moreover, a passage in the book\nabout B\'s life also states Laura put an end to the hunting.\nB had expressed to Ceci that he was glad Laura was older and would not want\nchildren. The record contains evidence that B underwent sperm testing in 1995 prior to his\nmarriage to Laura. Laura subsequently underwent in vitro fertilization. The evidence was\nconflicting as to whether at some point Laura became pregnant. Laura testified that home\npregnancy tests taken in November of 1998 showed that she was pregnant. Although Laura\nsubsequently went to a hospital to be checked, the testing did not show anything in her\nuterus, but a hormone that becomes elevated during pregnancy was in fact elevated. There\n27\n\n\x0cwas some suggestion, however, that the elevated level could have been caused by the in vitro\nprocedure. When B called Ceci and Sarah to tell them they lost a baby, Ceci and Sarah were\nshocked and reacted negatively. Ceci sent a letter apologizing, which Ceci testified would\nnormally reopen communications. The evidence contained a letter that B had drafted\naccepting the apology; however, the letter that was actually sent did not accept the apology.\nOnly after a letter was written specifically apologizing to Laura was communication\nreopened. Sarah testified that when she met B in his office after this incident, B told her that\nhe did not want to have a child, but Laura insisted.\nOne expert testified that relationship poisoning can be a tool to unduly influence a\nperson, including making negative remarks about a person\'s children and re-interpreting\nhistorical events in a negative manner. Although several people were interviewed for the\nbook about B\'s life, Ceci, Sarah, and Hager were not interviewed. Instead, Laura was\nextensively interviewed about events that occurred before she met B. The book contained a\nsuggestion that Kley had committed suicide based on Booth\'s interview of Laura; however,\nLaura had no proof that Kley committed suicide, and other evidence established that he was\nkilled in a car accident, likely driving while intoxicated. In the early 1990\'s, before B met\nLaura, B was having financial trouble; B and Laura\'s interviews for the book conflict as to\nwhether Ceci and Sarah knew of the extent of the financial trouble. Laura said they did; B\nsaid they did not. B sold the Chaparrosa ranch to alleviate the financial trouble. The\nchildren\xe2\x80\x99s\' trusts, which also owned an interest in the ranch, sued B because the sales\nagreement had money going to J.P. Morgan before the trusts, and the trustees did not\nbelieve the trusts were receiving the amount they were entitled to receive from the sale.\nLaura stated in an interview that Ceci and Sarah filed the lawsuit to bury B financially;\nhowever, B had stated Ceci and Sarah did not know the extent of his financial trouble. The\njury could consider Laura\'s reinterpretation of these historical events in a negative manner as\nevidence of relationship poisoning.\nThe jury also heard evidence that Laura made negative remarks about Ceci and\nSarah. Laura\'s friend, Reverend Zbinden, was interviewed by Booth and stated Laura had\ntold him that Ceci and Sarah were greedy and ungrateful. During his deposition, Reverend\nZbinden testified it was not unusual for Laura to speak negatively of Ceci and Sarah. Laura\ntold Copley in a telephone conversation that Sarah was vile, not smart, and had the attention\nspan of a gnat. Based on the evidence presented, the jury could infer that Laura also spoke\n28\n\n\x0cnegatively of Ceci and Sarah to B.\nHaving reviewed the record, we conclude the evidence is legally and factually\nsufficient to support a finding that undue influence existed and was exerted.\n3. No Execution \xe2\x80\x9cBut For\xe2\x80\x9d the Influence\n\xe2\x80\x9cFinally, the establishment of the fact that the testament executed would not have\nbeen executed but for such influence is generally predicated upon a consideration of whether\nthe testament executed is unnatural in its terms of disposition of property.\xe2\x80\x9d Rothermel, 369\nS.W. 2d at 923. During oral argument, the Appellants placed great emphasis on one sentence\nin this court\'s decision in Estate of Davis v. Cook, 9 S.W.3d 288 (Tex. App.-San Anonio 1999,\nno. pet). In that case, when describing a jury\'s consideration of unnatural disposition, we\nstated, \xe2\x80\x9cIn this respect, only where all reasonable explanation for the devise is lacking may the trier\nof facts consider the disposition as evidence of disorder or lapsed mentality.\xe2\x80\x9d Id. at 294.\n(emphasis added). Based on the italicized portion of this statement, the Appellants argued\nthat the standard of review for no-evidence claims in undue influence cases is different than\nin other types of cases. In short, Appellants contend the evidence could not support a\nfinding of undue influence because evidence was presented establishing a reasonable\nexplanation for B\'s disposition of his estate. We cannot accept Appellants\' interpretation of\nthe quoted portion of the Davis opinion because it ignores the standard of review established\nby the Supreme Court in City of Keller v. Wilson, 168 S.W. 3d 802, 827-30 (Tex. 2005), and\nestablishes a totally different standard of review in undue influence cases. Tracing the source\nfor the statement made in Davis reveals the fallacy of Appellants\' position. The source for the\nstatement in question is Craycroft v. Crawford, 285 S.W. 275, 278-79 (Tex. 1926), in which the\ncourt stated, \xe2\x80\x9cIf all explanation be lacking, the trier of fact may take the circumstance as a\nbadge of disordered or lapsed mentality or of its subjugation; if some explanation be\nadvanced, the jury may pass upon its adequacy and attribute to the circumstance and its\nexplanation such weight as may be thought proper, having in view all other relevant\nevidence.\xe2\x80\x9d Accordingly, evidence of a reasonable explanation for an unnatural disposition\ndoes not prevent a jury from finding undue influence. Instead, where such evidence is\npreferred, the jury must determine which explanation should be given more weight and\nwhich explanation is more credible. In this case, the jury disbelieved the explanation\nproffered by the Appellants in finding undue influence.\nConsidering whether the disposition was unnatural, we must consider evidence of\n29\n\n\x0cB\'s stated desires and actions. The evidence established that B made several comments about\nthe interest in the Hyatt being passed to the children/grandchildren. Similarly, evidence\nestablished that B was very proud of his heritage and wanted his descendants to inherit the\nKing Ranch royalties. The majority interest in both of those assets, however, was not\ninherited by the grandchildren. Instead, Laura initially would benefit from the income from\nthose assets during her life, and the interest would then pass to the foundation. Although the\nAppellants contend Laura did not receive any greater interest in B\'s estate than B\'s prior\nwives, the inclusion of the majority interest in these two assets in Laura\'s life estate greatly\nincreased its value and was contrary to evidence that B wanted his descendants to inherit\nthose assets. All of the estate planning documents that the jury found were the result of\nundue influence were executed after the dissolution of Johnson Properties and in connection\nwith the creation of BKJ Interests.\nPerhaps more importantly, the 1997 Management Trust expressly lists five charities\nas the remainder beneficiary after Laura\'s life estate consistent with the charities B had listed\nin his prior documents, which included: (1) United Way of San Antonio & Bexar County; (2)\nCornell University; (3) National Cowboy Hall of Fame; (4) Trinity University; and (5)\nTrustees of Deerfield Academy. The evidence established that B had strong ties with these\nfive charities. The documents found to be the product of undue influence eliminate a\nmandatory distribution to these favored charities. Instead, the remainder beneficiary after\nLaura\'s life estate became a perpetual foundation. Although the trust document listed\ncharities that B wanted to be the primary focus of distributions from the foundation, the\ntrustee of the foundation had complete control over the selection of the charities that would\nbenefit from foundation distributions. In addition, the list excluded the National Cowboy\nHall of Fame with which B had strong ties, but included a foundation with which B had no\nties and which Eastland admitted was mistakenly included. Finally, the list included \xe2\x80\x9c[a]ny\nother organization benefiting conservation, environmental causes, protection of animals,\n[and] protection of nature or the environment,\xe2\x80\x9d which described causes supported by Laura,\nnot B. Similarly, the remainder beneficiary of the grandchildren\'s trust under the 1997 trust\ndocument are the five charities B selected, as opposed to the foundation which was the\nremainder beneficiary in the 1998 trust documents.\nThe evidence presented was legally and factually sufficient to support a finding that\nthe wills and trusts rejected by the jury would not have been executed but for the undue\n30\n\n\x0cinfluence.\nCONCLUSION\nAfter full consideration of the Appellants\' claims, we conclude the record supports the\njury\'s finding that Belton Kleberg Johnson executed certain wills and trusts as a result of\nundue influence. Accordingly, we affirm the judgment of the trial court.\n\nWright v. Roberts, 797 So.2d 992\nCOBB, Justice, for the Court:\n\xc2\xb6 1. In December of 1995, attorney Armon Lee prepared wills, a deed, and powers of\nattorney for Emma Jane Wright and her husband, Homan Wright. Homan signed his will\nand power of attorney on December 28, 1995, at Lee\'s law office. Emma Jane signed the\ndeed, her will, and her power of attorney on January 2, 1996, while on her eventual death\nbed.\n\xc2\xb6 2. The deed conveyed, to the exclusion of her husband Homan, Emma Jane\'s twothirds interest in 200 acres of timber in fee simple to Mamie Roberts, a cousin by marriage,\nand reserved a life estate in a house and one acre of land surrounding the house for Emma\nJane and Homan. Emma Jane\'s will conveyed all of her remaining property to Roberts, in\ntrust for the care of Homan, then to Roberts and to Roberts\'s children upon Homan\'s death.\nHoman\'s will had parallel provisions. The attorney was not present when Emma Jane signed\nthe instruments. One of the attesting witnesses to Emma Jane\'s will was the attorney\'s\nsecretary. The other attesting witness noted on her affidavit that neither the secretary nor\nEmma Jane identified the document she signed as a will, rather it was referred to as \xe2\x80\x9cpapers\nto take care of Homan Wright\xe2\x80\x9d. She also marked through on the affidavit the part which\nsaid \xe2\x80\x9cEmma Jane was of sound and disposing mind.\xe2\x80\x9d\n\xc2\xb6 3. The powers of attorney gave Roberts complete power to run the Wrights\' affairs.\nAttorney Lee had been Roberts\'s attorney over the years, having done extensive land\ntransaction work for Roberts and her son. Attorney Lee predeceased Emma Jane.\n\xc2\xb6 4. Emma Jane died on January 22, 1996, and a week later, Homan filed suit to set\naside the deed and to contest the will which Emma Jane executed. On May 27, 1997,\nRoberts presented the will for probate and the cases were later consolidated The matter was\ncontinued twice because Roberts was hospitalized, and it eventually was heard in August of\n1998.\n\xc2\xb6 5. The Chancellor issued his opinion on December 30, 1998, finding the following:\n31\n\n\x0c1. A confidential relationship did not exist between Roberts and the Wrights.\n2. Even if a confidential relationship existed, Roberts\'s action of taking all of Emma Jane\'s\nreal property did not over-reach or abuse her authority as the dominant party to the\nrelationship.\n3. Although Emma Jane stated specific items which were inconsistent with the instruments\nwhich were executed, she knew the objects of her bounty and the quantity of her estate\nand had testamentary capacity.\n4. Although Dr. Coghlan examined Emma Jane shortly before the execution of the\ndocuments and stated her condition at that time as \xe2\x80\x9csenile\xe2\x80\x9d and suffering from other\nailments, such did not meet the legal criteria of lack of capacity.\n5. There were no suspicious circumstances surrounding the execution of the documents.\nAggrieved, Homan Wright brings this appeal raising the following six issues:\nI. The Chancery Court manifestly erred in not finding specifically that a fiduciary or\nconfidential relationship existed between Emma Jane and Homan Wright and Mamie\nRoberts and that powers of attorney signed by them interposed no confidential\nrelationship because they were set up only to protect the attorney in fact, Mamie Roberts.\nII. The Chancery Court manifestly erred in failing to apply the correct standard, in that the\nexistence of a confidential relationship required independent counseling for both Homan\nWright and Emma Jane Wright.\nIII. The Chancery Court manifestly erred in finding that Mamie Roberts did not overreach\nor abuse her authority and that the only things done were for Emma Jane\xe2\x80\x99s benefit.\nIV. The Chancery Court manifestly erred in finding that no \xe2\x80\x9csuspicious\xe2\x80\x99 facts exist\nsurrounding the execution of the documents.\nV. The Chancery Court manifestly erred in finding that the only evidence of lack of\ncapacity was the testimony of Dr. Coughlan and that did not rise to the requisite level of\nproof.\nVI. The Chancery Court manifestly erred in finding that Emma Jane knew the quantity of\nher estate.\n\xc2\xb6 6. Because we determine that the chancellor abused his discretion and committed\nmanifest error, we reverse and render in part and remand in part.\n\nFACTS\n\xc2\xb6 7. Emma Jane and Homan Wright lived in an old frame house which she had\n32\n\n\x0cinherited from her father. They did not have the amenities of an air-conditioner, hot water,\ntelephone or bathroom (only an outhouse). They had married late in life and had no\nchildren. Emma Jane managed their finances. At her death, they had been married for\ntwenty-four years. Homan is a retired saw mill and chicken farm worker. He had only\nattended a few days of school in the first grade, and his literacy was limited to signing his\nname.\n\xc2\xb6 8. Mamie Roberts was married to one of Emma Jane\'s cousins and had known\nEmma Jane for fifty-eight years. When Emma Jane\'s health declined, Roberts provided her\nwith transportation to the doctor and helped her in other ways. On December 9, 1995, when\nEmma Jane\'s medical condition worsened, Roberts took Emma Jane to the hospital where\nshe was admitted. By that time Roberts had begun assisting Emma Jane in paying bills.\n\xc2\xb6 9. Armon Lee, the attorney who prepared the documents, had done extensive work\nfor Roberts and her son. Roberts stated in her deposition that she had chosen Armon Lee to\nprepare the power of attorney because he was a good attorney. In court she refuted that she\nhad selected the attorney, but stated that she had driven Homan to Armon Lee\'s office on\nDecember 28, 1995 where he signed his power of attorney. Roberts\'s son was present at the\nattorney\'s office when Roberts and Homan arrived. Roberts\'s son testified that his presence\nwas just a coincidence. Homan was never consulted regarding his wishes. No one identified\nthe instrument as a broad power of attorney, and Homan thought he was signing something\nwhich would allow Roberts to take care of his mail. Homan testified that he would not have\nsigned otherwise. Roberts testified that she requested that the Wrights execute powers of\nattorney in her favor to facilitate her helping them with their affairs and to protect herself.\n\xc2\xb6 10. Roberts testified that her son was fairly sophisticated concerning real estate and\nthat he had \xe2\x80\x9cowned a good bit, and his dad before him owned a good bit.\xe2\x80\x9d When asked if\nher son had ever met with Armon Lee to discuss how the documents were to be prepared,\nRoberts replied, \xe2\x80\x9cNot about that, I don\'t think. But now he was with Mr. Lee. He\'s, he\'s a\nbusy man, and Mr. Lee did his work.\xe2\x80\x9d\n\xc2\xb6 11. Roberts conceded that Lee was an attorney with whom Emma Jane had never\nhad prior dealings. She asserts that Armon Lee first came into contact with Emma Jane\nwhen he brought a deed unconnected with the Wrights\' property to the hospital for Roberts\nto sign when she was visiting Emma Jane.\n\xc2\xb6 12. Roberts\'s brief states \xe2\x80\x9c[i]t was Emma Jane who talked to Attorney Lee about\n33\n\n\x0cthe deed, and it was Emma Jane who was in contact with Attorney Lee by phone as to the\nother instruments.\xe2\x80\x9d Yet Roberts testified that within a few days of having the power of\nattorney drafted, she had the deed and will made in her favor. It is undisputed that the\npowers of attorney, the deed and wills were prepared at the same time.\n\xc2\xb6 13. Emma Jane, already very ill, had a particularly bad night of January 1, 1996.\nAround noon the next day, Roberts visited Emma Jane and Homan at the hospital. During\nthat visit, Roberts called Lee\'s secretary to ask if the documents were ready and to request\nthat someone bring them to the hospital because Emma Jane was \xe2\x80\x9cready to sign her papers.\xe2\x80\x9d\nAlthough Lee was at lunch, his secretary brought the documents immediately. Five or six\nrelatives, including Roberts, were in Emma Jane\'s hospital room when the secretary arrived.\nThere was testimony of a general confusion in the room and that Roberts was telling jokes.\nThere was conflicting testimony concerning whether the documents were actually read word\nfor word. After approximately one and one half hours of coaxing Emma Jane signed the\ninstruments. There was testimony that she was confused during the process, apparently\nthinking she was writing a check and that she had asked for, but was not given her glasses.\nAfter executing the documents, Emma Jane told the secretary of several bequests that she\nwould like for her will to contain. These bequests included a gift of the one-half acre of land\nthat she had just deeded to Roberts and Roberts\'s son. None of the requested changes were\nmade prior to her death three weeks later.\n\nSTANDARD OF REVIEW\n\xc2\xb6 14. A chancellor\'s findings of fact will not be disturbed unless they are manifestly\nwrong or clearly erroneous, or unless the chancellor applied an erroneous legal standard. If\nthe Chancellor\'s findings are supported by substantial, credible evidence in the record, this\nCourt will not reverse. In re Estate of Grantham, 609 So.2d 1220, 1223 (Miss. 1992).\n\xc2\xb6 15. Homan Wright\'s six assignments of error in essence claim that the chancery\ncourt committed manifest error by not finding that Mamie Roberts and Emma Jane had a\nconfidential relationship and that Roberts exerted undue influence over Emma Jane through\nthis confidential relationship. Because of this alleged undue influence, Homan argues that\nboth the will and deed in question must be voided.\n\xc2\xb6 16. The law in this state on fiduciary or confidential relationships and undue\ninfluence is well settled. Its application has been made to both inter vivos and testamentary\ntransactions. Murray v. Laird, 446 So.2d 575, 578 (Miss. 1984). With both gifts testamentary\n34\n\n\x0cand gifts inter vivos, once the presumption of undue influence has been established, the\nburden of proof shifts to the beneficiary/grantee to show by clear and convincing evidence\nthat the gift was not the product of undue influence. In re Estate of Dabney, 740 So.2d 915,\n921 (Miss. 1999).\nI. Did a Confidential Relationship Exist Between Emma Jane and Roberts?\n\xc2\xb6 17. This Court has long held that a confidential relationship does not have to be a\nlegal one, but the relation may be moral, domestic, or personal. The confidential relationship\narises when a dominant, over-mastering influence controls over a dependent person or trust,\njustifiably reposed. Murray v. Laird, 446 So.2d at 578. Whenever there is a relation between\ntwo people in which one person is in a position to exercise a dominant influence upon the\nother because of the latter\'s dependency upon the former, arising either from weakness of\nmind or body, or through trust, the law does not hesitate to characterize such relationship as\nfiduciary in character. Madden v. Rhodes, 626 So.2d 608, 617 (Miss. 1993).\n\xc2\xb6 18. This Court has enumerated several factors to consider in determining whether a\nconfidential relationship exists: (1) whether one person has to be taken care of by others, (2)\nwhether one person maintains a close relationship with another, (3) whether one person is\nprovided transportation and has their medical care provided for by another, (4) whether one\nperson maintains joint accounts with another, (5) whether one is physically or mentally weak,\n(6) whether one is of advanced age or poor health, and (7) whether there existed a power of\nattorney between the one and another. Dabney, 740 So.2d. at 919.\n\xc2\xb6 19. Emma Jane and Roberts\'s relationship had become confidential in nature even\nbefore the powers of attorney were signed. Emma Jane had relied on Roberts\'s son for\nadvice regarding the sale of timber off her land. He had negotiated oil leases for her. He had\nalso arranged for repairs and maintenance on the Wrights\' home. When Emma Jane became\nill in 1995, Roberts began taking her to the doctor. Roberts admitted her to the hospital in\nDecember of 1995. By that time, Emma Jane had entrusted her purse to Roberts who\nassisted the Wrights in paying their bills. This arrangement continued throughout Emma\nJane\'s hospitalization.\n\xc2\xb6 20. Clearly, Emma Jane was of advanced age, in poor health, physically and\nmentally weak and was dependent on Roberts for transportation and medical care. They\nwere related by marriage and had been friends for fifty-eight years. Considering the Dabney\nfactors, Homan proved by clear and convincing evidence that Roberts had a confidential\n35\n\n\x0crelationship with Emma Jane.\nII. Did Roberts Abuse Her Confidential Relationship with Emma Jane?\n\xc2\xb6 21. Having ascertained that a confidential relationship existed between Roberts and\nEmma Jane, the next inquiry is whether Roberts abused that relationship. With regard to the\ndeed, there is a presumption that it is a product of undue influence, which Roberts must\nrebut by clear and convincing evidence. With regard to the will, additional proof is required\nin order to raise the presumption of undue influence and shift the burden of proof to\nRoberts.\n[A]lthough the mere existence of confidential relations between a testator and a\nbeneficiary under his will does not raise a presumption that the beneficiary exercised undue\ninfluence over the testator, as it does with gifts inter vivos, such consequence follows where\nthe beneficiary \xe2\x80\x98has been actively concerned in some way with the preparation or execution\nof the will, or where the relationship is coupled with some suspicious circumstances, such as\nmental infirmity of the testator;\xe2\x80\x99 or where the beneficiary in the confidential relation was\nactive directly in preparing the will or procuring its execution, and obtained under it a\nsubstantial benefit.\nCroft v. Alder, 237 Miss. 713, 723-24, 115 So.2d 683, 686 (1959).\nWhen there is a fiduciary or confidential relation, and there is a gift or conveyance of\ndubious consideration from the subservient to the dominant party, it is presumed void. This\nis not because it is certain the transaction was unfair; to the contrary, it is because the Court\ncannot be certain it was fair. Estate of McRae, 522 So.2d 731, 737 (Miss. 1988). Given the\nfinding that a confidential relationship does exist between beneficiary and the testatrix and\nthat the beneficiary has been actively concerned in some way with the preparation or\nexecution of the will, the law raises a presumption that the beneficiary exercised undue\ninfluence over the testatrix, and casts upon the beneficiary the burden of disproving undue\ninfluence by clear and convincing evidence. Dabney, 740 So.2d. at 920.\n\xc2\xb6 22. While Emma Jane was in the hospital, Roberts took Homan to the law office of\nArmon Lee. Neither Emma Jane nor Homan had any prior dealings with Armon Lee, nor\nhad Homan ever met him prior to this time. Further, Homan did not ask to be taken to Lee.\nRoberts conceded that she selected Armon Lee to prepare the powers of attorney, the deed\nand the wills. Roberts\'s son was meeting with Lee when Mamie Roberts and Homan arrived\nat Lee\'s office. After Roberts\'s son left, Homan was asked to sign \xe2\x80\x9ca paper\xe2\x80\x9d which he\n36\n\n\x0cbelieved would only allow Roberts to take care of his mail. Instead, the instrument was a\nbroad power of attorney for Roberts to conduct all of Homan\'s affairs. Further, Lee\'s\nsecretary testified that she had first learned about someone wanting these documents\nprepared from Mamie Roberts.\n\xc2\xb6 23. There is substantial evidence in the record to demonstrate that the beneficiary\nof the will, Mamie Roberts, had been actively involved with both the preparation and\nexecution of the will. Therefore, there is a presumption that Roberts exercised undue\ninfluence over Emma Jane, and the burden of proof shifts to Roberts to rebut.\n[Once] the circumstances give rise to a presumption of undue influence, then the\nburden of going forward with the proof shifts to the grantee/beneficiary to prove by clear\nand convincing evidence of: (1) good faith on the part of the grantee/beneficiary; (2)\ngrantor\'s[/testator\'s] full knowledge and deliberation of his actions and their consequences;\nand (3) [independent consent and action by the grantor/testator]. Murray, 446 So.2d at 578.\nIII. Did Roberts Rebut the Presumption of Undue Influence by Clear and\nConvincing Evidence?\nA. Did Roberts prove she exercised good faith by clear and convincing evidence?\n\xc2\xb6 24. This Court has previously stated that the important factors for the appellate\ncourt to consider in determining whether the grantee/beneficiary used good faith are:\n\xe2\x80\x9c(a) the determination of the identity of the initiating party in seeking preparation\nof the instrument, (b) the place of the execution of the instrument and in whose\npresence, (c) what consideration and fee were paid, if any, and (d) by whom paid,\nand (e) the secrecy or openness given the execution of an instrument.\xe2\x80\x9d Id.\n\xc2\xb6 25. Roberts and her son had both tried to buy Emma Jane\'s land on several\noccasions. With Emma Jane\'s permission, Roberts\'s son had put a cabin built by their\ngrandfathers on the land in the 1970\'s. He stated that it was his desire that the property with\nwhich he had been familiar all his life, and on which he had hunted over the years, remain in\nhis family. He testified that he offered to buy the land from Emma Jane, but that she\n\xe2\x80\x9cdefinitely\xe2\x80\x9d did not want to sell it. He later testified that he never \xe2\x80\x9ctried to buy Mrs. Wright\'s\npart,\xe2\x80\x9d rather the remaining one-third interest owned by Emma Jane\'s closest blood relatives\nin Birmingham, Alabama. Roberts herself testified: \xe2\x80\x9cI went out there, and it was hot, it was\nhot as it could be. And I said, \xe2\x80\x98Emma, why don\'t you sell me this land and let me help you\nget somebody to put you in a bathroom and things that you need and an air conditioner.\xe2\x80\x99 \xe2\x80\x9d\n37\n\n\x0cHoman testified, regarding the land, that \xe2\x80\x9c[e]ver time, Mrs. Mamie Roberts tried to buy it.\xe2\x80\x9d\n\xc2\xb6 26. Roberts stated that she did not consider Homan capable of caring for himself\nand that she had arranged for him to be admitted to a personal care home while Emma Jane\nwas in the hospital. Yet at the time of trial (three years later) Homan was still living\nindependently ... even gardening.\n\xc2\xb6 27. Emma Jane\'s primary concern was that Homan was cared for after her death.\nRegarding her power of attorney over the Wrights\' affairs, Roberts testified that she had\nbelieved she \xe2\x80\x9cmight have to sell some of the timber to take care of Homan, because he\nneeded eye surgery.\xe2\x80\x9d Nevertheless, her attorney prepared documents giving her Emma Jane\'s\ntimber. In her brief she stated: \xe2\x80\x9cThere was no need for either of them, especially Homan, to\nown any land beyond the reserved life interest.\xe2\x80\x9d Additionally, Lee was never paid for his\nservices, nor was anyone ever billed.\n\xc2\xb6 28. Roberts\'s only evidence of good faith was her testimony that she intended only\nto do what was in Homan\'s best interest, since she had promised Emma Jane she would take\ncare of Homan for the rest of his life. This testimony is insufficient to rebut the undisputed\nevidence to the contrary.\n\xc2\xb6 29. Roberts selected the attorney, arranged for the preparation of the documents in\nwhich she was a beneficiary, and attended their signing. Emma Jane was presented the\ndocuments while lying sick in her hospital bed. Any consideration given by Roberts was\ndubious, at best, consisting primarily of an illusory promise to take care of Homan in the\nfuture.\n\xc2\xb6 30. Roberts has failed to prove by clear and convincing evidence that she acted in\ngood faith in her dealings with Emma Jane.\nB. Did Roberts prove Emma Jane had full knowledge and deliberation of her actions and their consequences\nby clear and convincing evidence?\n\xc2\xb6 31. This Court has not hesitated to set aside instruments where there were\nsuspicious circumstances regarding their execution. In one such case involving an elderly\ncouple, no consideration was given for a deed, the grantors thought they were signing a will,\nthe wife was physically exhausted by caring for her husband, both lacked mental capacity,\nand one thought they could still sell the property. Ladner v. Schindler, 457 So.2d 1339 (Miss.\n1984). This Court has stated:\nFactors important to address the grantor/testator\'s knowledge, at the time of\n38\n\n\x0cexecution of any instrument are (a) his awareness of his total assets and their\ngeneral value, (b) an understanding by him of the persons who would be the\nnatural inheritors of his bounty under the laws of descent and distribution or\nunder a prior will and how the proposed change would legally affect that\nprior will or natural distribution, (c) whether non-relative beneficiaries would\nbe excluded or included and, (d) knowledge of who controls his finances and\nbusiness and by what method, and if controlled by another, how dependent\nis the grantor/testator on him and how susceptible to his influence. Murray,\n446 So.2d at 578.\n\xc2\xb632. Emma Jane\'s physician, Dr. Coghlan, had seen her near the time she signed the\ndocuments. He testified: (1) Because she was in congestive heart failure she might not have\nbeen getting adequate oxygen to her brain, and it may have affected her mental ability some;\n(2) She would not take the oxygen which would affect her ability to remain conscious to a\ncertain extent; (3) In noting that he would not rely on her ability to understand the effect of\nsigning a deed conveying real property on that date, he stated, \xe2\x80\x9c... if I were dealing in some\nkind of business deal with her, I would not have thought she was competent to make the\nbusiness arrangement ... I had a problem with the decisions that she made in regard not to\neat, not to take her medication, and not to do anything along that line that would have been\ncontributing to her health.\xe2\x80\x9d\n\xc2\xb633. During that period of time, Dr. Coghlan noted that she was probably unable to\nconcentrate due to the state of her health. It was his impression that Emma Jane was senile\nprior to and including the time during which she signed the documents.\n\xc2\xb6 34. In addition to Dr. Coghlan\'s testimony, there was other evidence of Emma\nJane\'s lack of capacity. Testimony by Roberts and the lawyer\'s secretary showed lack of\ncapacity. Roberts conceded Emma Jane seemed confused and believed that she was writing a\ncheck for legal services. The lawyer\'s secretary testified that after signing away her real\nproperty by deed, Emma Jane then attempted to convey by will land which she had just\ndeeded away.\n\xc2\xb635. Roberts also admitted that Emma Jane asked for, but was not given, her glasses.\nRegarding the documents, Roberts stated, \xe2\x80\x9cShe couldn\'t read \xe2\x80\x98em very well. She wanted her\nglasses.... They were in the drawer right there by her, in her bed, in the stand....\xe2\x80\x9d Emma\nJane\'s confusion at the time of signing clearly created doubt as to whether she knew the\n39\n\n\x0cquantity of her estate.\n\xc2\xb6 36. Roberts has failed to present clear and convincing proof that Emma Jane\nexhibited full knowledge and deliberation of her actions.\nC. Did Roberts prove Emma Jane had independent consent and action?\n\xc2\xb6 37. We have previously stated that \xe2\x80\x9c[t]he participation of the beneficiary/grantee,\nor someone closely related to the beneficiary, arouses suspicious circumstances that negate\nindependent action. Harris v. Sellers, 446 So.2d 1012, 1015 (Miss. 1984).\n\xc2\xb6 38. This third prong of the Murray test for rebutting the presumption of undue\ninfluence, was formerly stated by this Court as, \xe2\x80\x9cAdvice of (a) competent person, (b)\ndisconnected from the grantee and (c) devoted wholly to the grantor/testator\'s interest.\xe2\x80\x9d\nMurray, 446 So.2d at 578. However, three years later this Court revised the third prong,\nstating:\nThe independent advice prong of Murray has been read too strictly. Considering\nthe heavy burden placed upon one seeking to overcome the presumption of\nundue influence, we find it necessary to redefine the third prong of the Murray\ntest. This we do to the end that the power our law vest in property owners to\nmake bona fide inter vivos gifts not be practically thwarted by often impossible\nevidentiary encumbrances. We declare that the appropriate third prong of the\ntest is a requirement that the grantee/beneficiary prove by clear and convincing\nevidence that the grantor/testator exhibited independent consent and action.\nMullins v. Ratcliff, 515 So.2d at 1193.\n\xc2\xb6 39. There is no proof that Emma Jane or Homan spoke with any other attorney\nindependent of Armon Lee, the Roberts\'s attorney, before or after signing the documents.\nWhen Roberts was asked if she were aware of whether Emma Jane or Homan had ever\ntalked to any attorney other than Armon Lee regarding the documents, she stated that she\nwas not. Roberts and her son used Armon Lee extensively as their attorney. Roberts testified\nthat neither Emma Jane nor Homan had ever contacted Armon Lee to perform legal\nservices.\n\xc2\xb6 40. Roberts in one instance stated that she procured the preparation of the\ndocuments, but in another she denied this. It appears that the documents were prepared\nbefore the Wrights were consulted, because Lee\'s secretary, based upon personal knowledge,\nbelieved that Homan could not write his name and had typed spaces for his mark to be\n40\n\n\x0cattested by witnesses. It was Roberts\'s son who brought to the secretary\'s attention the fact\nthat Homan could sign his name. If the Wrights had, in fact, consulted the lawyer, he would\nhave likely determined such information. Furthermore, the documents were prepared in\nearly December, and some were not signed until the next month. Lee\'s secretary testified\nthat Emma Jane was hesitant in signing the will. Even Roberts stated: \xe2\x80\x9cI didn\'t know\nwhether she was [going to sign] or not. She wanted to think about it, and she wanted to\nthink about selling the place....\xe2\x80\x9d Roberts told Emma Jane that if they kept the secretary too\nlong, it would cost them money. In an attempt to convince Emma Jane to sign, Roberts told\nher that if she did not sign, her property would go to the state and the lawyers. Roberts\'s\nbrief unconvincingly states that this was not an effort to coax Emma Jane, rather, merely an\n\xe2\x80\x9cexpression of frustration.\xe2\x80\x9d\n\xc2\xb641. It is clear from the record that Roberts failed to prove by clear and convincing\nevidence that Emma Jane exhibited independent consent and action.\n\nCONCLUSION\n\xc2\xb642. Homan showed by clear and convincing evidence that a confidential\nrelationship existed between Emma Jane and Roberts, thereby creating a presumption that\nthe deed was the product of undue influence. Homan has further shown that Roberts abused\nthat confidential relationship by being involved in the preparation and execution of Emma\nJane\'s will, under which Roberts was the main beneficiary, raising a presumption that the will\nwas the product of undue influence. In order to rebut this presumption of undue influence,\nRoberts had to prove by clear and convincing evidence (1) good faith on her part, (2) full\nknowledge and deliberation of her actions and their consequences on the part of Emma\nJane, and (3) independent consent and action by Emma Jane. Not only did Roberts fail to\nprove each and every element as required by Mississippi law, she failed to prove even one of\nthe three elements.\n\xc2\xb643. The chancellor was manifestly in error in his decision. For the reasons set forth\nherein, this Court reverses and renders with regard to the validity of the will and deed\nexecuted by Emma Jane Wright, which are void. We remand this case to the chancery court\nfor further action, consistent with this opinion, with regard to administration of the estate of\nEmma Jane Wright in the absence of the will.\n\xc2\xb644. Reversed and remanded; remanded in part.\nNotes, Questions and Problems\n41\n\n\x0c1. In the Wright case, the court emphasized that a confidential relationship was created when\nRoberts started doing things like taking Emma Jane to the doctors. As a society, we want to\nencourage people to help the elderly and the disabled. Will people be discouraged from\nassisting persons in those populations if that assistance may lead to a fiduciary duty? When a\nperson with a confidential relationship receives a bequest from the person they are helping,\nthere is a presumption of undue influence. The purpose of that presumption is to protect\nvulnerable people from being taken advantage of by their caregivers. However, people often\ndevelop friendships with the persons who take care of them. This is especially true if they are\nneglected by their relatives. Is it fair to invalidate gifts to caregivers, and give the property to\nrelatives who did not bother to assist the testator?\n2. When deciding whether to invalid a testamentary distribution based upon undue influence,\nthe court starts by focusing upon the testator\xe2\x80\x99s state of mind and not on the actions of the\nperson who received the contested bequest. A person may go to great lengths to influence\nthe testator. However, if the testator\xe2\x80\x99s will was not a result of the influence, the will is valid.\nThus, the first thing to determine is whether the testator was susceptible to being influence.\nA person\xe2\x80\x99s age, mental capacity, and health are usually factors the court considers when\nresolving this issue.\n3. Problems\nIn which of the following situations is the court likely to conclude that the person was\nsusceptible to undue influence?\na) An 85 year old man becomes severely depressed after his wife of 57 years dies.\nb) A 45 year old attorney is addicted to alcohol and prescription drugs.\nc) A 37 year old woman is suffering from brain cancer.\nd) A 27 year old man is permanently disabled after he is injured in a motor cycle accident.\ne) A 55 year old woman with low self-esteem who desires to please people, so she can have\nfriends.\n4. Another factor the courts consider to be relevant is the opportunity that the alleged\ninfluencer had to influence the testator. In determining whether or not someone had the\nopportunity to exert undue influence, the courts evaluate the relationship that existed\nbetween that person and the testator. The existence of a special or confidential relationship\nindicates that the person had the chance to exert undue influence.\n5. Problems\n42\n\n\x0cIn which of the following situations is the court likely to conclude that a confidential\nrelationship existed?\na) Allie took her grandmother, the testator, to pay her bills once a month and to buy\ngroceries once a week.\nb) Shepherd mowed his seventy-eight year old neighbor, the testator\xe2\x80\x99s yard for free.\nc) Tyler was the pastor of the church that the testator attended.\nd) William was the testator\xe2\x80\x99s law school professor.\n\n1.2.4. Fraud and Duress\nCourts will invalid a provision of a testamentary trust that is obtained by fraud. The\nother terms of the trust will be enforced unless the fraud pervades the entire trust instrument\nor the provisions nullified by fraud are indivisible from the valid parts. In order to proof\nfraud sufficient to invalidate a trust, the contestant must show that a person made a\nmisrepresentation with the intent to deceive the testator for the purpose of influencing the\ntestamentary disposition. The two types of fraud are fraud in the inducement and fraud in\nthe execution. Fraud in the inducement occurs when a person\xe2\x80\x99s misrepresentation causes the\ntestator to make a disposition he would not have made if he had not been deceived. The\nperson making the misrepresentation must intend to deceive the testator. Fraud in the\nexecution happens when a person deliberately causes the testator to sign a testamentary\ninstrument that does not achieve the testator\xe2\x80\x99s intent. See the following examples:\nExample: Cory omits his son, Benjamin as a beneficiary of his testamentary\ntrust because his daughter, Diane, tells him that Benjamin has taken a vow of\npoverty. At that time, Diane knows that her statement is untrue, but she\nwants to receive a larger portion of her father\xe2\x80\x99s estate. This is fraud in the\ninducement because Diane\xe2\x80\x99s misrepresentation caused Cory to remove\nBenjamin as a beneficiary of the trust. If Cory knew that Diane\xe2\x80\x99s statement\nwas false, he would have not omitted Benjamin. However, if Diane\nmistakenly thought that Benjamin had taken a vow of poverty, no fraud\nwould be involved because she did not have an intent to deceive.\nExample: Whitney was seventy years old, illiterate and the mother of four\nsons. Whitney had her son Juan bring her the document prepared for her as a\ntestamentary trust for her four sons so that she could sign it. Without\n43\n\n\x0cWhitney\xe2\x80\x99s knowledge, Juan inserted a clause in the trust giving himself half of\nthe proceeds of the trust. Whitney signed the trust document believing that it\ncontained the provision she had discussed with her attorney. This is fraud in\nthe execution because Juan\xe2\x80\x99s deception caused Whitney to sign a document\nthat did not carry out her intent.\nDuress is the equivalent to aggressive undue influence. In order to insure that the\ntestamentary follows his wishes, the culprit uses severe physical or emotional pressure. The\ntest for duress is whether the wrongdoer threatened to perform or performed a wrongful act\nthat coerced the testator into making a disposition that the testator would not otherwise\nhave made. Testamentary trusts that are the product of duress of invalid. See the following\nexamples:\nExample: Eighty-five year old Elvira had three children. Elvira lived with\nher daughter, Barbara. Elvira\xe2\x80\x99s late husband Joseph left her a substantial\nestate. Elvira created a testamentary trust for the benefit of her three\nchildren. Barbara thought that she deserved to receive a bigger portion of the\ntrust than her siblings. Thus, Barbara told Elvira that if she did not amend\nthe trust instrument and grant Barbara a 50% interest in the trust, Barbara\nwould have her put in a nursing home. Elvira was terrified of going to a\nnursing home, so she complied with Barbara\xe2\x80\x99s demands. The terms of the\ntrust granting Barbara a 50% interest should be invalidated because they are\nthe product of duress.\nClass Discussion Tool I.\nNova wanted to establish a trust for the benefit of his children, Nicole and Jeremy.\nJeremy convinced Nova that Nicole was abusing drugs. Nova confronted Nicole and\ninsisted that she enter a rehabilitation program. Nova told her that if she did not obey his\ncommand, he would disinherit her. Nicole did not have a drug problem, so she refused to\nenter a rehabilitation program. Thus, Nova executed a will stating, \xe2\x80\x9cI leave my entire estate\nin trust for my son, Jeremy. I am disinheriting Nicole because she refuses to give up the\ndrugs.\xe2\x80\x9d Based upon the facts, what legal arguments could Nicole make to get the trust\ninvalidated?\nClass Discussion Tool II.\n\n44\n\n\x0cAnna was diagnosed with breast cancer. Her doctor treated the cancer with radiation\nand chemotherapy. In order to combat the side effects of the treatment, Anna got a\nprescription for medical marijuana. Anna smoked three joints a day to alleviate her pain and\nnausea. Anna moved in with her only child, Jean, so she could take care of her. Jean believed\nin natural healing, so she put Anna on a regiment of organic food, herbal supplements and\nyoga. Maggie, Anna\xe2\x80\x99s best friend, told Anna that Dr. Oz said that some herbal supplements\nincreased the growth of cancer cells. In fact, Dr. Oz stated that some herbal supplements\nmight decrease the growth of cancer cells. On the day she watched the show, Maggie was\nhaving trouble with her hearing aide. Anna refused to take the herbal supplements. Jean got\ntired of fighting with Maggie over the supplements, so she started slipping them into her\nfood. One day, Anna saw Jean open up a capsule and sprinkle it over her pasta. After that,\nAnna became convinced that Jean was poisoning her. Anna shared her concerns with\nMaggie. Maggie told her pastor, Donald, that Anna was in danger. Maggie took Anna to the\nchurch to meet with Donald. After the meeting, Anna was so grateful that she gave the\nchurch a $500 donation. When he discovered that she had money, Donald convinced Anna\nto move into an apartment complex owned by his church. Donald and the other members of\nthe church prevented Jean from visiting Anna. Eventually, Donald took Anna to the\nchurch\xe2\x80\x99s attorney and had her create a testamentary trust leaving all of her money in trust for\nthe benefit of the church. A few months later, Anna read in a magazine that Dr. Oz stated\nthat some herbal supplements might decrease the growth of cancer cells. Consequently,\nAnna told Donald that she was wrong about Jean. Anna told him that she planned to return\nhome to Jean and to modify her testamentary trust to leave her entire estate in trust for the\nbenefit of Jean. In response, David placed guards, so that Anna could not leave the\napartment. One night, Maggie helped Anna escape from the apartment and reunite with\nJean. Anna died a few days later before she could amend her testamentary trust. Jean plans\nto challenge the validity of the trust. What are her strongest arguments?\n\n45\n\n\x0cChapter 2 - Creation of a Private\nTrust\nThe two major categories of trusts are private trusts and charitable trusts. This\nchapter set forth the elements necessary to create a valid private trust. The creation of\ncharitable trusts will be discussed in Chapter Eight. There are no magic words that the\nsettlor has to use in order to establish a trust. If it looks like a trust and functions like a trust,\nit is a trust regardless of what the testator calls it. First, the testator must manifest the intent\nto create a trust by vesting the beneficial ownership of property in a third party or in the\nsettlor for the benefit of another. Second, the trust instrument must name ascertainable\nbeneficiaries. The class of beneficiaries must be so described that some person might\nreasonably be said to answer the description. Third, the trust must be funded with property.\nThere must be an identifiable trust res or corpus. Any form of property, including stocks,\nreal property, mortgage securities, easements, causes of actions, can be the corpus of a trust\nas long as the settlor has an interest in the object. In general, a trust does not have to be in\nwriting to be valid. Thus, the settlor can create an oral trust. However, the Wills Act\nmandates that a testamentary trust be in writing, and the Statutes of Fraud requires an inter\nvivos trust of land to be in writing. As a result, the only trust that can be oral is a trust that\ndisposes of personal property. Proving the existence of such a trust is difficult because the\nparole evidence rule limits the extrinsic evidence that can be admitted to prove the terms of\nthe trust.\n\n1.2\n\nIntent to Create a Trust\nIt is not enough just for the settlor to use the word trust. The test is whether the\n\nsettlor indicated that she intended to establish a trust relationship. Consider the following\nillustrations.\n(a) \xe2\x80\x9cI leave my lake cabin to Tresmal in trust provided that he pays his brother, Alonzo,\n$50,000.\xe2\x80\x9d The testator has not established a trust. He has created an equitable charge. If a\ntestator grants property to a person, subject to the payment of a specific sum of money to a\nthird party, the testator has created an equitable charge. An equitable charge is similar to a\ntrust in that in each case the legal title to the property is vested in one person and the other\n46\n\n\x0cpersons has an equitable interest in the property. However, the equitable imcumbrancer has\nonly a security interest in the property; the beneficiary of a trust is the equitable owner of the\nproperty. Further, the holder of the equitable charge does not owe a fiduciary duty to the\nthird party. In the trust situation, the trustee owes such a duty. The relationship between the\nholder of the equitable charge and the beneficiary is more in the nature of a debtor and\nsecured creditor. In this case, Tresmal is not holding the lake cabin or the $50,000 for the\nbenefit of Alonzo. Alonzo has a security interest of $50,000 in the lake cabin. Thus, if\nTresmal fails to pay Alonzo the $50,000, Alonzo can file suit to force Tresmal to sell the lake\ncabin to get the money to pay him the $50,000. If a trust was created, Alonzo\xe2\x80\x99s remedy\nwould be to sue Tresmal for a breach of his fiduciary duty.\n(b) \xe2\x80\x9cI leave my house located at 215 Chestnut Street in trust to LaNitra with the hope that\nshe will provide her sister, Kaylan, with a place to live during her lifetime.\xe2\x80\x9d The testator has\nnot established a trust. The testator lacked the intent to create a trust because she did not\nimpose legally enforceable duties on LaNitra. She has made an outright gift of the house to\nLaNitra. Kaylan has no interest in the house. This is not a legally valid trust because the\nlanguage \xe2\x80\x9cwith the hope\xe2\x80\x9d is precatory language which creates a presumption that the testator\nintended to imposed only an unenforceable moral obligation on LaNitra. Kaylan can\novercome the presumption by presenting clear and convincing evidence that the testator\nintended for LaNitra to have a legal obligation to let Kaylan live in the house. Courts have\nheld that words like hope, wish and desire are precatory words.\n(c) \xe2\x80\x9cI leave $400,000 to Emma in trust provided that she repays me in two years.\xe2\x80\x9d The\ntestator has not established a trust. Her intent was to create a debtor-creditor relationship\nbetween herself and Emma. A trustee is obligated to hold specifically defined property for\nthe benefit of a third party. The trust property must be kept separate from the trustee\xe2\x80\x99s own\nfunds. A debt involves a personal obligation to pay a sum of money to another. The crucial\nfactor in distinguishing between a trust relationship and an ordinary debt is whether the\nrecipient of the assets is entitled to use the property as his own and to comingle the property\nwith his own assets. In this case, Emma has no obligation to use the money for the benefit\nof a third party. Her only obligation is to repay the money. Thus, instead of owing a fiduciary\nduty to a third party, Emma\xe2\x80\x99s sole duty is to repay the testator.\n(d) \xe2\x80\x9cI leave $300,000 in trust to Bernie to pay the income to Jeremy for life and upon\nJeremy\xe2\x80\x99s death to divide the principle between Jeremy\xe2\x80\x99s surviving children.\xe2\x80\x9d Testator has\n47\n\n\x0cestablished a trust. Bernie is not permitted to use the money and repay it. Thus, this is not an\nequitable charge or a debt. Moreover, Bernie has a mandated duty to abide by the terms of\nthe trust with regards to Jeremy and Jeremy\xe2\x80\x99s children. It is clear that the testator intended\nBernie to manage the trust funds for the benefit of those persons.\n\nMarzahl v. Colonia Bank and Trust Company, 364 A.2d 173\nBOGDANSKI, Associate Justice.\nThis appeal arises from an action brought by the plaintiff against the defendant bank\nas executor of the estate of the plaintiff\'s deceased mother. The plaintiff sought damages\nalleged to have resulted from the mother\'s failure to distribute to the plaintiff a portion of\nthe income received by the mother from a testamentary trust established in the will of the\nplaintiff\'s father. On motion by the defendant, and after having considered an affidavit and a\ncounter-affidavit filed by the parties, the court granted summary judgment for the defendant.\nFrom that judgment, the plaintiff has appealed, claiming that the court erred in concluding\nthat the fourth article in the will did not require the decedent mother to disburse portions of\nthe trust income received by her for the plaintiff\'s maintenance, health and comfort.\nThe affidavits submitted by the parties to the trial court revealed that no material\nfacts were in issue. See Rathkopf v. Pearson, 148 Conn. 260, 170 A.2d 135. W. Marnahl, the\nplaintiff\'s father, died on July 8, 1967, leaving a will in the fourth article of which he created a\ntrust from which the income and principal were to be disposed of as follows: \xe2\x80\x98My Trustees\nshall pay in income to my wife, Margaret, during her lifetime in quarter annual payments or\nin more frequent payments in the discretion of my Trustees, together with such sums out or\n(sic) principal as my Trustees in their sole discretion shall deem proper from time to time for\nher suitable maintenance, health and comfort and for the suitable maintenance, health and\ncomfort of my daughter, Anne.\xe2\x80\x99\nThe plaintiff contends that article four of the will established the mother as a trustee\nof a portion of the income received by her, and subjected her to a fiduciary duty to use that\nportion for the maintenance, health and comfort of the plaintiff. She argues that the\ncircumstances surrounding the testator when the will was executed evidenced his intent to\ncreate such a trust; that that intent would become manifest in the language of the fourth\narticle if a comma were to be inserted after the phrase \xe2\x80\x98from time to time\xe2\x80\x99; and that such a\ncomma should have been supplied by the court since punctuation should not be allowed to\nobscure the true intent of a testator.\n48\n\n\x0cOne of the basic elements necessary for the creation of a trust is a manifestation of\nintention to create it. Effect must be given to that intent which finds expression in the\nlanguage used. Fidelity Title & Trust Co. v. Clyde, 143 Conn. 247, 253, 121 A.2d 625; Conway v.\nEmeny, 139 Conn. 612, 618, 96 A.2d 221. In Peyton v. Wehrahane, 125 Conn. 420, 425, 6 A.2d\n313, 315, citing Loomis Institute v. Healy, 98 Conn. 102, 114, 119 A. 31, we stated: \xe2\x80\x98(W) hen\nproperty is given absolutely and without restriction, a trust is not lightly to be imposed, upon\nmere words of recommendation or confidence.\xe2\x80\x99 The plain and unambiguous language used\nby the testator in the fourth article of his will does not give the slightest indication that he\nintended that his wife be subjected to a fiduciary duty to share the trust income with her\ndaughter. The plaintiff is mentioned only with respect to the provision for payment of\nprincipal.\nMoreover, even if we assume, arguendo, that the insertion of a comma after the\nphrase \xe2\x80\x98from time to time\xe2\x80\x99 would render the provision susceptible to the interpretation urged\nby the plaintiff, the circumstances surrounding the testator at the time the will was executed,\nas disclosed by the plaintiff\'s counter-affidavit, afford no basis for making such an insertion.\nPunctuation may be inserted or deleted where a provision does not lend itself to a clear\ninterpretation of the testator\'s intent and when \xe2\x80\x98the result would be a clear and sensible\nstatement, not out of accord with other provisions of the instrument and the testator\'s intent\nthereby manifested.\xe2\x80\x99 Simmons v. Simmons, 99 Conn. 562, 568, 121 A. 819, 821. The counteraffidavit points out that when the will was executed, the father knew that the plaintiff was\nalmost destitute, and that he also knew that his wife was well provided for. In his will the\ntestator provided for the plaintiff during the lifetime of her mother by allowing the trustees\nthe discretion to provide portions of the principal of the trust for the maintenance, health\nand comfort of the plaintiff. It appears, however, that the plaintiff never requested the\ntrustees to pay over any of the principal. Upon her mother\'s death, the entire principal was\nto be given to the plaintiff free from any trust. The will further provided that all property\nwould go to the plaintiff in the event her mother predeceased her father. Article four lends\nitself to a clear interpretation of the testator\'s intent with respect to the method of providing\nfor his wife and daughter after his death. Nothing suggested by the plaintiff\'s affidavit is\ninconsistent with that expressed intention.\nIf a comma were to be inserted, the result would not be a \xe2\x80\x98clear and sensible\nstatement\xe2\x80\x99 and would be \xe2\x80\x98out of accord with other provisions of the instrument.\xe2\x80\x99 Simmons v.\n49\n\n\x0cSimmons, supra. The clarity which pervades this will would be muddled by the question of\nwhether the phrase \xe2\x80\x98for the suitable maintenance, health and comfort of my daughter, Anne\xe2\x80\x99\nreferred to the income as well as to the principal of the trust. Moreover, the sixth article of\nthe will nominates two named trustees \xe2\x80\x98as Trustees of the trust herein created.\xe2\x80\x99 To hold that\nthe testator intended to create still another trust and to nominate another trustee would be\ncompletely out of accord with that provision.\nThe trial court\'s conclusion that the fourth article of the will could not be construed as\nestablishing the decedent mother as the trustee of a trust for the benefit of the plaintiff\ncannot be disturbed.\nThere is no error.\n\nIn re Estate of Brooks, 579 P.2d 1351.\nDORE, Judge.\nThis is an appeal from a King County Superior Court ruling that certain language in a\nwill created a trust.\nEloise Brooks, a divorced woman, died September 21, 1974, survived by her two\nminor children. She left a will dated March 14, 1974 which named her sister, Sharon Morton,\nas executrix. The will left certain specific property to her two children and appointed Sharon\nMorton to be guardian and have actual custody of the children. Paragraph VI of the will\nprovided:\nI hereby give, devise, and bequeath unto my sister, Sharon Nelson Morton, all the\nrest, residue and the remainder of my estate, for her to use in her own discretion and\nin whatever manner she deems appropriate for the benefit of my children.\nThe will was admitted to probate October 11, 1974 and proceedings ensued normally\nuntil August 19, 1976 when the natural father moved, on behalf of the children, for an\naccounting of a trust allegedly created by paragraph VI. Although Sharon Morton contended\nthat no trust had been created the court found that all property passing under paragraph VI\nof (the will) is held in trust for the benefit of said minor children and further that there is a\nconflict of interest for the Executrix to serve also as Trustee . . . Thereupon the court\nappointed a new trustee and ordered him to make an accounting.\nIt is well established that in construing a will a court must attempt to give effect to\nthe intent of the testator. Matter of Griffen\xe2\x80\x99s Estate, 86 Wash.2d 223, 543 P.2d 245 (1975). The\nwill should be construed as a whole. In re Estate of Price, 75 Wash.2d 884, 454 P.2d 411\n50\n\n\x0c(1969). Where there is room for construction, that meaning will be adopted which favors\nthose who would inherit under the laws of intestacy, In re Estate of Price, supra; In re Lambell\xe2\x80\x99s\nEstate, 200 Wash. 200, 226, 93 P.2d 352 (1943), and a sole surviving natural heir who is a\nminor is favored. Cotton v. Bank of California, 145 Wash. 503, 216 P. 104 (1927).\nBefore a trust will be found to exist, there must be a clear manifestation of an intent\nto create a trust and not to do something else. Hoffman v. Tieton Methodist Church, 33 Wash. 2d\n716, 207 P.2d 699 (1949). A testamentary trust will not be declared, unless such a trust is\nclearly intended by the testator. In re King\xe2\x80\x99s Estate, 144 Wash. 281, 257 P.848 (1927). It has\ngenerally been held that an imperative command to dispose of the property for the benefit\nof another is required to create a testamentary trust. In re Morton\xe2\x80\x99s Estate, 188 Wash. 206, 61\nP.2d 1306. Precatory words are not enough to create a trust and if the grantee has discretion\nto use the property for herself the court will not find a trust. Lanigan v. Miles, 102 Wash.82,\n172 P. 894 (1918).\nThe issue is whether Eloise Brooks manifested an intention to impose duties upon\nSharon Morton which are enforceable in the courts. See Rest. (Second) Trusts, s 25. If so,\nthere is a trust.\nThe language of paragraph VI which conveyed the estate to Sharon Morton \xe2\x80\x9cfor her\nto use . . . for the benefit of my children\xe2\x80\x9d is strongly suggestive of a trust. Other language in\nthe clause, however, suggests that Sharon Morton was to hold the property free and clear\nwith the option to comply with the wish of the testator only if she desired to do so. When\nnecessary, extrinsic circumstances may be considered as an aid in determining intention. In re\nMac Adam\xe2\x80\x99s Estate, 545 Wash.2d 527, 531, 276 P.2d 729 (1954). In re Quick\xe2\x80\x99s Estate, 33\nWash.2d 568, 573, 206 P.2d 489 (1949). Restatement Second, Trusts s25, comment b sets\nforth circumstances pertinent to this inquiry:\nIn determining the intention of the settlor the following circumstances\namong others are considered: (1) the imperative or precatory character of the\nwords used; (2) the definiteness or indefiniteness of the property; (3) the\ndefiniteness or indefiniteness of the beneficiaries or of the extent of their\ninterests; (4) the relations between the parties; (5) the financial situation of\nthe parties; (6) the motives which may reasonably be supposed to have\ninfluenced the settlor in making the disposition; (7) whether the result\nreached by construing the transaction as a trust or not a trust would be such\n51\n\n\x0cas a person in the situation of the settlor would naturally desire to produce.\nIn re Mac Adam\'s Estate, supra; In re Quick\'s Estate, supra.\nConsidering these circumstances along with the language of the will we believe that a\ntrust was intended. The language \xe2\x80\x9cfor her to use . . . for the benefit of my children\xe2\x80\x9d is more\nimperative than precatory. Although Morton was given apparent uncontrolled discretion in\nusing the funds for the benefit of the children, this fact neither defeats the trust nor gives\nMorton unlimited power. See Rest. Second Trusts, s 187, comment j.; In re Sullivan\xe2\x80\x99s Will, 144\nNeb. 36, 12 N.W.2d 148, 150-1 (1943). Other considerations control. The property and\nbeneficiaries are definite. See In re Hochbrunn\xe2\x80\x99s Estate, 138 Wash. 415, 244 P. 698 (1926). Most\nsignificant is the readily ascertainable motive of Eloise Brooks. By her will she was providing\nfor the welfare of her children, not for her sister. Sharon Morton was given the property of\nthe estate, not for her own use, but to use in raising the two children. It is inconceivable that\nthe testator intended Sharon Morton\'s discretion to include the discretion not to use the\nproperty to benefit the children. We therefore adopt the construction most favorable to the\nchildren, In re Estate of Price, supra; In re Lambell\'s Estate, supra; Cotton v. Bank of California, supra,\nand concludes there was a trust. Cf. Rest. Trust Second s 25, comment Illustration 6. Duties\nwere imposed on Sharon Morton which are enforceable in the courts.\nHowever, we feel that the trial court erred in removing Sharon Morton as trustee.\nThere is no doubt that Brooks intended Morton, who was to be physically raising the\nchildren, to use the money as she saw fit to benefit the family unit of Morton and the two\nchildren. Absent a showing of an abuse of discretion or a breach of fiduciary duty we hold it\nwas error to remove Sharon Morton as trustee and we reverse the order of the trial court\ninsofar as it removed Sharon Morton as trustee.\nAffirmed in part; reversed in part.\nNotes, Questions and Problem\n1. In order to ascertain the testator\xe2\x80\x99s intent with regards to the creation of a trust, courts\noften look to the plain language of the testamentary instrument. Although it is not necessary\nfor the testator to use the word trust, the use of that word usually leads to the conclusion\nthat the testator intended to create a trust. If the language of the testamentary instrument is\nunhelpful, courts will admit extrinsic evidence to determine the testator\xe2\x80\x99s intent. That\nevidence frequently includes the testimony of disinterested parties.\n2. It has been noted that the use of precatory rather than mandatory language does not\n52\n\n\x0ccreate a trust. Nonetheless, that is not the end of the story. The court may permit a trust to\nbe established from precatory language if the words taken in connection with other portions\nof the will and in light of all the circumstances indicate that the testator intended to place a\nlegal obligation on the potential trustee. What factors should be considered to determine if a\nprecatory trust was intended?\n3. Problems.\nIn which of the following circumstances did the testator intend to create a trust.\na). Geoff had two children, Alice and Denise. Denise was permanently disabled. Geoff\xe2\x80\x99s will\ncontained the following provision: \xe2\x80\x9cI leave half of my estate to my daughter Alice. I leave\nthe other half in trust for the benefit of my daughter, Denise. Alice can serve as trustee if she\npromises to take care of her sister.\xe2\x80\x9d\nb). When he was a young man, Steven inherited a house from his grandfather. Steven wanted\nto make sure that the house remained in his family. Steven\xe2\x80\x99s will contain the following\nlanguage: \xe2\x80\x9cI leave my grandfather\xe2\x80\x99s house to my son, John in trust for himself and my two\nother children, Nancy and Peter, provided that John promises to pay $4,000 a year to the city\nproperty tax department.\xe2\x80\x9d\nc). Angela had seven minor children. In her will, Angela stated, \xe2\x80\x9cI leave my entire estate to\nmy oldest son, Benjamin in trust in exchange for his promise to take care of his younger\nsiblings.\xe2\x80\x9d\nd). Greta did not have any children, but she was close to her nieces and nephews. In her will,\nGreta stated, \xe2\x80\x9cI leave my entire estate to my sister, Brenda, in trust provided that she pays\neach one of my living nieces and nephews $400 per month.\xe2\x80\x9d\ne). Brian and Cynthia were best friends. Brian was the Godfather to Cynthia\xe2\x80\x99s daughter\nBriana. In his will, Brian stated, \xe2\x80\x9cI leave the residuary of my estate to Cynthia in trust for my\nGoddaughter, Briana. Before she assumes the role as trustee, Cynthia should repay the\n$100,000 that she owes me.\xe2\x80\x9d\n\n2.2\n\nRequirement of Trust Property\nA valid trust cannot be created without trust property which is referred to as res. If\n\nthe trust is created using a deed of trust, the property must be delivered to the trustee. Any\ninterest in property can serve as the res of a trust. Consider the following examples.\n53\n\n\x0ca) On the beneficiary designation on her pension plan Carmen wrote \xe2\x80\x9cTo Rodney Gates, in\ntrust, for my children, Peter, Paul, and Mary.\xe2\x80\x9d This transaction creates a trust because any\nright to receive benefits under a pension plan can serve as trust property.\nb) Stephanie created a trust for the benefit of her minor child, Yasmine. The trust consisted\nof a house Stephanie will inherit under her father, Clinton\xe2\x80\x99s will and the profits she\nanticipates earning next month when she sells her antique bedroom set. This transaction\ncreates a valid trust because the profits Stephanie anticipates making can serve as trust\nproperty because she actually owns the antique bedroom set. However, the house cannot\nserve as trust property because she does not yet have an interest in it. She only has an\nexpectancy because Clinton can change his will at any time.\n\nEdwards v. Edwards, 459 P.2d 422\nPEARSON, Judge.\nPlaintiff appeals from a dismissal of a declaratory judgment action in which he\nsought to invalidate the trust provision of the last will and testament of Lonnie Leota\nEdwards, deceased.\nThe facts were not disputed. The matter was brought to issue by plaintiff\'s motion\nfor summary judgment. Both counsel agreed that only issues of law were involved.\nLonnie Leota Edwards died testate in Tacoma, Washington on February 26, 1963.\nHer husband, Leon R. Edwards, was appointed executor of her estate. Paragraphs 3 and 4 of\nher will, which are here under attack, provided:\nI give, devise and bequeath to my husband, Leon R. Edwards, a life estate in\nall the rest, residue and remainder of my estate, subject to the conditions and\nlimitations set forth herein, of every kind, nature and description and\nwheresoever situated, or which I may die seized, for his own use during his\nlife without bond and without liability for impeachment for waste, provided,\nhowever, that in the event he is unwilling or physically unable to manage and\nadminister said estate, then and in that event it is my desire and intent that all\nof my estate then in his possession shall be placed in trust with the Puget\nSound National Bank * * *\nIn the event my husband, Leon R. Edwards, should perish with me in a\ncommon disaster or as the result of a common disaster or should die within\nsix months following my death, or upon the subsequent death of my\n54\n\n\x0chusband, I give, devise and bequeath all the rest, residue and remainder of\nmy estate not specifically devised herein to the PUGET SOUND\nNATIONAL BANK, Tacoma, Washington, TRUST DEPARTMENT, to be\nheld in trust for the benefit of my grandchildren, SHARON EDWARDS\nKNAPP,\n\nSt.\n\nHelens,\n\nOregon,\n\nGRETCHEN\n\nEDWARDS,\n\nJANE\n\nEDWARDS, and WENDY SUE EDWARDS, of Bellevue, Washington, and\nmy son, MARION C. EDWARDS, for the following uses and purposes and\nupon the following terms and conditions.\nThe plaintiff, Marion C. Edwards, is the son of he deceased, Lonnie Leota Edwards,\nand brought this action individually and as guardian ad litem for his children, all of whom\nare beneficiaries of the aforementioned trust. The named defendants were Leon R. Edwards,\nindividually and as executor, and the Puget Sound National Bank, named trustee in the will.\nPlaintiff claims that no valid trust was created by the provisions of this will because\nthe trust would not come into existence until the life tenant died or became \xe2\x80\x98unwilling or\nphysically unable to manage and administer (the) estate.\xe2\x80\x99\nPlaintiff asserts that a trust is not and cannot be created without the actual transfer\nof legal title to the trustee as of the date of death of the trustor. He seeks to have the trust\nprovisions invalidated, so that the remainder after the life estate passes by intestacy.\nThe trial court denied this relief, upheld the trust, dismissed the action, and allowed\nboth defendants\' costs and attorney\'s fees.\nTo simplify the first legal problem presented by the appeal, we state the issue: Where\nA devises her estate to B for life, with power to consume and at his death the remainder to C\nin trust for D, is a valid trust of that remainder established?\nPlaintiff contends that it is invalid because (1) title to the remainder does not reach\nthe trustee at the time of testator\'s death but is postponed until the intermediate estate\nterminates, and (2) the power to consume in the life tenant and the words, \xe2\x80\x98all of my estate\nthen in his possession\xe2\x80\x99 makes the trust res so uncertain and indefinite as to render the trust\ninvalid.\nTo understand the first contention is to reject it. We are told, in effect, that if testator\nhad used these words: To C in trust for D, subject to a life estate in B, the trust would stand,\nbut because she used these words: To B for life and at his death to C in trust for D, the trust\nis invalid.\n55\n\n\x0cWe are told that the reason for this distinction is that in the former case legal title\nreposes immediately in the trustee while in the latter it awaits the termination of the\nintermediate estate. Thus, testator has not made a present and unequivocal disposition of\nboth legal and equitable ownership at her death, which is one of the requirements of an\nexpress trust.\nThe rule relied upon by plaintiff is stated in 54 Am.Jur. Trusts s 34 (1966) at 45:\nIt is essential to the creation of an express trust that the settlor presently and\nunequivocally make a disposition of property by which he divests himself of\nthe full legal and equitable ownership thereof. He may make himself the\ntrustee or one of the trustees, thus retaining the legal title in whole or part, or\nby making himself the beneficiary or one of the beneficiaries of the trust, he\nmay retain the equitable ownership in whole or part, but he cannot retain the\nfull legal and equitable ownership. The legal title must be definitely reposed\nin the trustee, whether he is the trustor or another. Such present and\nunequivocal disposition of the property in trust must constitute an actual\ncarrying out and execution of the settlor\'s intention to create a trust by some\nproper transaction or mode, and it does not suffice to create a trust that he\nmerely intends or manifests an intention to create a trust in the future or\nconditionally directs or gratuitously promises a disposition of property in\ntrust in the future.\nThis rule and the cases cited as authority for it involve inter vivos trusts. The issue in\nmany of them was whether or not the trust should fail as an attempted testamentary\ndisposition, without compliance with the statute of wills. Others were cases where the settlor\nhad declared a trust but had conveyed no property to the trustee on which a trust could\noperate. A testamentary trust is distinguishable. Such a trust looks to the future and does\nnot, as of the time of its execution, divest the trustor of his property or any interest therein\nor vest a present property interest in the beneficiaries. Johnson v. Weldy, 79 N.D. 80, 54\nN.W.2d 829 (1952).\nWe believe that plaintiff\'s attempted application of that rule to a testamentary trust\nand to the trust in question is erroneous.\nAssuming arguendo that a valid testamentary trust must At death divest the trustor\nof full \xe2\x80\x98legal and equitable ownership,\xe2\x80\x99 it is our view that testatrix intended to and did\n56\n\n\x0caccomplish that end in this case. To ascertain the type of interests which came into being at\nher death, we look to the law of future interests.\nIn the case of In re Estate of Gochnour, 192 Wash. 92, 93, 72 P.2d 1027 (1937) the will\nunder consideration provided:\n\xe2\x80\x98I give, devise and bequeath all my property, owned by me at the time of my\ndeath, both real and personal * * * to my husband, Jacob B. Gochnour, * * *\nwith full power to alienate the same for his use and benefit during his natural\nlife, and I direct that at the death of my said husband, Jacob B. Gochnour, all\nof my said property, real and personal, or the proceeds thereof, then\nremaining, go and be distributed to my nieces and sister * * *.\xe2\x80\x99\nAt 93, 72 P.2d 1027 the court stated:\nBy the terms of the will, under the great weight of authority, Jacob B.\nGochnour takes a life estate, with vested remainder to the decedent\'s sister\nand nieces, notwithstanding his absolute power of disposal during his\nlifetime.\nAdmittedly the remainder given in that case was not placed in trust. However, the\ninterest created in the remaindermen is identical with the interest placed in trust in the case\nat bar. Accordingly, we hold that testatrix created a life estate and a future interest\ndenominated a vested remainder, both interests of which came into being at the time of her\ndeath.\nIn Shufeldt v. Shufeldt, 130 Wash. 253, 227 P. 6 (1924), at 262 P. at 9 the court stated:\nIf the postponement of the payment of the legacy or the enjoyment of the\ndevise is for the purpose of letting in intermediate estates only, then the\nremainder shall be deemed vested at the death of the testator and the legatees\nand devisees are to be determined as of that date, for under those\ncircumstances no futurity is annexed to the substance of the conveyance, but\nonly to the time of its enjoyment.\nThis interpretation is consistent with Restatement (Second), Trusts s 77 (1959),\nwhere Illustration 4 at 198 provides:\n4. A, the owner of Blackacre, transfers Blackacre to B for life, remainder to C\nand his heirs and directs that C hold his interest in trust for D. C holds a\nvested remainder in trust for D.\n57\n\n\x0cPlaintiff next contends that the trust should fail because the trust res is too indefinite\nand uncertain.\nThe creation of a valid testamentary trust requires (1) the intention by the testator by\nwill to create a trust, (2) designation of the trust property, and (3) the designation of\nbeneficiaries, and the terms on which the trust is to operate.\nPlaintiff contends that the second element of a valid trust is not satisfied because the\nterm \xe2\x80\x98all of my estate then in his (Leon R. Edwards\') possession\xe2\x80\x99 is too uncertain a\ndesignation of the trust res. Furthermore, where there is no \xe2\x80\x98liability for impeachment for\nwaste\xe2\x80\x99 it is uncertain that there will ever be a trust estate. Therefore, the trust should be held\ninvalid. We reject this argument.\n1 G. Bogert, Trusts and Trustees s 112 (2d ed. 1965), at 571 describes the following\nas proper subject matter of trust estates:\nThe trust property may consist of an interest which is absolutely vested, or\none which is vested but subject to being divested, as in the case of gifts on\ncondition subsequent or determinable interests. It may be a contingent\ninterest which is not to vest until the happening of a condition precedent or\nis uncertain as to the person to take.\nThe res may be a present estate or interest, or one entitling the trustee to\npossession and enjoyment at a future date, as in the case of reversions and\nremainders.\nOn this point, we find in 1 A. Scott on Trusts s 74.1 (3d ed. 1967) at 679:\nWhatever may be the subject of an executed gift may be given in trust; and a\nperson can declare himself trustee of whatever he can give to another in\ntrust. Whatever interest he can devise or bequeath, he can devise or bequeath\nin trust. See also United States Trust Co. of N.Y. v. Commissioner of Int. Rev., 296\nU.S. 481, 56 S.Ct. 329, 80 L.Ed. 340 (1936).\nAgain, in Scott on Trusts, Supra, s 76 at 685:\nA trust can be created although the parties do not know precisely what the\nsubject of the trust is, if it can be ascertained from circumstances existing at\nthe time of the creation of the trust. Thus a trust created by will of the\nresidue of the testator\'s estate is of course valid although the amount of the\nresidue cannot be ascertained until the amount of his assets and of his\n58\n\n\x0cliabilities has been determined.\nSpeaking of the uncertainty created by the power to consume by a life beneficiary,\nScott states:\nA trust does not fail for uncertainty of the subject matter even though the life\nbeneficiary is entitled to receive so much of the principal as he may demand\nand it is therefore uncertain how much will be left for the remainderman.\nScott on Trust, Supra, s 76 at 686.\nRestatement (Second) Trusts, s. 77 (1959) at 197 provides:\nAn interest in a thing may be held in trust although the interest is not the\ncomplete property in the thing.\nc. Future Interests. The interest may be a future interest either vested or\ncontingent. * * * The interest may be contingent as to its extent.\nPlaintiff relies on Wilce v. Van Anden, 249 Ill. 358, 360, 94 N.E. 42, 43 (1911).. In that\ncase the \xe2\x80\x98entire part or portion of my estate remaining after the death or remarriage of my\nsaid wife * * *\xe2\x80\x99 was placed in trust. The court apparently held that the power to consume by\nthe wife (life tenant) rendered the bequest void for uncertainty as to subject matter.\nHowever, we note that two later Illinois cases, if not expressly overruling that\ndecision, did so by implication. In Burke v. Burke, 259 Ill. 262, 267, 102 N.E. 293 (1913) the\nwife was given a life estate with the power to sell any of the estate in order to supply her\ncomforts and necessities. The remainder over was placed in trust. In upholding the validity\nof that trust, the court distinguished the Wilce case by commenting that it was not the\nuncertainty created by the power to consume which rendered the trust void, but another\nprovision of the trust which placed discretion in the trustees \xe2\x80\x98to give to the brothers and\nsisters of the testator such portion of the trust fund as they might think best and devote the\nrest to charity.\xe2\x80\x99\nThe same distinction is made in Dean v. Northern Trust Co., 266 Ill. 205, 107 N.E. 186\n(1914) where the court upheld the validity of a trust of a remainder following a life estate\nwith power to consume in the life tenant.\nThe case of Burke, supra, gives the rationale which we believe should control the case\nbefore us, 259 Ill. at 268, 102 N.E. at 295:\nEvery kind of vested right which the law recognizes as valuable may be\ntransferred in trust. Perry on Trusts, ss 67, 68. The law is well settled that an estate\n59\n\n\x0cmay be given to a person for life, with power to sell and convey the fee, and that\na remainder may in such case be limited in fee after the termination of the life\nestate. * * * A remainder so limited is vested, though subject to be defeated by\nthe exercise of the power by the life tenant. The uncertainty as to the amount of\nthe reduction because of the disposition of the estate, or a part of it, for the\ncomfort or necessities of the life tenant, and the consequent uncertainty as to the\namount of the estate which may be undisposed of, does not render the\nremainder contingent. * * *\nWe consider this rule applicable to the case at bar.\nThis precise issue has not been decided by the Supreme Court of this state. We\nbelieve, however, that our determination of the validity of the trust is consistent with\npreviously enunciated principles of future interest in property. In re Estate of Gochnour, Supra.\nIn the case of In re Estate of Ivy, 4 Wash. 2d 1, 3, 101 P.2d 1074, 1075 (1940) the court\nwas also faced with a community estate placed in trust for the surviving spouse with the\npower to consume as much of the corpus as \xe2\x80\x98the trustors saw fit to withdraw\xe2\x80\x99 together with\nthe right to amend or revoke the trust agreement. Upon the death of the survivor, the estate\nwas to be distributed to the remaindermen. Subsequent to the husband\'s death, the surviving\ntrustor amended the trust by eliminating the remaindermen and making herself the sole\nbeneficiary of the trust.\nIn determining that the power to consume and revoke did not change the character\nof the remainder so as to save the remaindermen from the inheritance tax laws, the court\nstated at 8, 101 P.2d at 1077.\nWhile there is confusion among the authorities in drawing a distinction between a\nvested remainder and a contingent remainder, the rule is settled in this state that a life estate,\nwith the right to invade the principal, and remainder over, creates a vested remainder and\nnot a contingent remainder.\nWhile it is not essential to characterize the type of estates created by testator\'s will, it\nseems clear that she created a life estate in her husband of all of her estate with the power to\nconsume and the remainder to the Puget Sound National Bank in trust for her son and\ngrandchildren.\nUnder the rationale of the foregoing decisions, she granted to the trustee a vested\nremainder, notwithstanding the power to consume. Shufeldt v. Shufeldt, Supra; In re Estate of Ivy,\n60\n\n\x0cSupra.\nWe believe that such a future interest is and should be the proper subject matter of a\ntestamentary trust.\nIn considering instruments creating trusts, the sole object of the courts is to ascertain\nthe purpose of the settlor and to effectuate the purpose insofar as it is consistent with rules\nof law. Old Nat\xe2\x80\x99l Bank & Union Trust Co. etc. v. Hughes, 16 Wash. 2d 584, 134 P.2d 63 (1943);\nSeattle First Nat\xe2\x80\x99l Bank v. Crosby, 42 Wash.2d 234, 254 P. 2d. 732 (1953)..\nIn the case at bar, the intentions of the testator are clear. To declare an intestacy\nunder these circumstances solely because the extent of the trust res is uncertain is in our\njudgment unsound. It may be that no assets will be available to make the trust operative. We\ndo not deem this obstacle of sufficient importance that we should frustrate the testator\'s\nintention as to the remainder, if any, by declaring an intestacy. The presumption against\nintestacy is particularly strong where the subject of the gift is the residuary estate. In re Estate\nof Quick, 33 Wash.2d 568, 206 P.2d 489 (1949).\nPlaintiff also seeks to have the trust invalidated by urging that several of its\nprovisions relating to the administration and distribution are vague and ambiguous. We have\nreviewed the will in its entirety and agree with the defendant executor that the terms of the\ntrust are workable. In any event, if the trustee finds it necessary, it may at any time apply to\nthe court for assistance. Old Nat\'l Bank & Union Trust Co. etc. v. Hughes, Supra.\nPlaintiff also complains of the award of $150 as attorney\'s fees to the defendant,\nPuget Sound National Bank, but does not complain of the award in favor of the executor.\nWe believe the award to the defendant bank was within the discretion of the trial court. This\ncase was in the nature of a will contest.\nRCW 11.24.050 provides that reasonable attorney\'s fees may be assessed against the\ncontestant where the will is upheld, unless the contestant acted with probable cause and in\ngood faith.\nThe trial court undoubtedly reasoned that since the defendant, Puget Sound\nNational Bank, had not accepted its trust duties, and would not be required to do so until\nthe intermediate estate terminated, it was not a necessary party to the litigation.\nConsequently, the plaintiff did not act with probable cause and in good faith in its action\nagainst the bank. We are unable to say that the trial court abused its discretion in awarding\nattorney\'s fees under these circumstances.\n61\n\n\x0cAccordingly, the judgment of the trial court is affirmed, with costs on appeal\nawarded to respondent\nNotes, Questions, and Problems\n1. The property used to fund a trust must be in existence or ascertainable at the time that the\ntrust is created. More specifically, the testator\xe2\x80\x99s interest in the property must be in existence\nor ascertainable when he attempts to create the trust.\n2. A will does not speak until death. Thus, at the time the will is executed that testator does\nnot have to own the property he or she seeks to devise in the will unless he or she intends\nthat property to be the corpus of a testamentary trust. For example, at the time she executes\nher will, Betty anticipates inheriting a house from her mother. Betty can devise that house in\nher will to Veronica. If Betty has not inherited her mother\xe2\x80\x99s house when she dies or if she\ninherits the house and sells it before she dies, the house does not become a part of her\nestate. Thus, under the doctrine of ademption by extinction, Veronica would not inherit the\nhouse. However, the devise would not invalidate Betty\xe2\x80\x99s will. Since a testamentary trust is\nnot intended to take effect until the testator\xe2\x80\x99s death, why should the law mandate that such a\ntrust contain property in order to be valid? Should the trust be valid when created and fail\nfor lack of property at the time that it comes into existence?\n3. A testator does not have a property interest in a life insurance policy because the proceeds\nare not payable until the testator\xe2\x80\x99s death. Thus, life insurance proceeds cannot be the res of a\ntestamentary trust. Nonetheless, those proceeds can be the property of an inter vivos trust.\nAll the testator has to do is to create a revocable inter vivos trust and name that trust as the\nbeneficiary on the life insurance policy. A life insurance policy can be the res of an inter\nvivos trust even though the insured person reserves the right to change the beneficiary on\nthe policy.\n4. Problems\nIn which of the following cases is there a valid trust res?\na). George was diagnosed with cancer. The doctor told him that the treatment would make\nhim sterile. Since he wanted children, George stored some of his sperm in the Fertility\nSperm Bank. While he was under going treatment, George executed a will that stated, \xe2\x80\x9cI\nleave my sperm to the Fertility Sperm Bank in trust for my girlfriend, Kayla.\xe2\x80\x9d\nb). While he was riding his bicycle, Peter was hit by a car driven by Jenny. As result, Peter\nsuffered severe injuries. Peter filed a lawsuit against Jenny. While the suit was pending, Peter\n62\n\n\x0cexecuted a will that contained the following language: \xe2\x80\x9cI leave any monetary judgment I\nreceive from my lawsuit against Jenny Armstrong to my brother, Marshall, in trust for my\nson, Jacob.\xe2\x80\x9d\nc). Jack, a compulsive gambler, is convinced that he is going to some day win the lottery.\nWhen the mega million lottery reached four hundred million dollars, Jack purchased $10,000\nworth of lottery tickets. The day before the lottery drawing Jack executed a will containing\nthe following provision: \xe2\x80\x9cI leave my lottery tickets purchased on June 7, 2011 to my Aunt\nJean in trust for my cousin, Timothy.\xe2\x80\x9d\nd). Patrick accepted a job at a large retail store. As a part of his benefit package, Patrick will\nreceive stock options after he has worked at the store for ninety days. A month after he\nstarted working at the store, Patrick executed a will stating \xe2\x80\x9cI leave my stock options to\nStephanie in trust for Trenton.\xe2\x80\x9d\n\n2.3\n\nNecessity of Trust Beneficiaries\nThere must be ascertainable beneficiaries who have the authority to enforce the\n\nterms of the trust by suing the trustee if he violates any of the fiduciary duties. The\nbeneficiaries do not have to be specifically enumerated in the trust instrument, but they must\nbe readily identifiable. In some cases, the beneficiaries may be persons who are not yet born.\nThere must be a beneficiary or a class of beneficiaries indicated in the trust that is able to\ncome into court and claim the benefit of the bequest. Consider the following examples.\na) \xe2\x80\x9cI leave $150,000 in trust to Carlos for the benefit of any of my friends who Carlos thinks\nis worthy to have the money.\xe2\x80\x9d The testator has not created a valid trust because Carlos is\ngiven too much discretion to choose the beneficiaries of the trust. Even if the trust had\nobligated Carlo to hold the money for the benefit of the testator\xe2\x80\x99s friends, the trust would\nstill fail because the term \xe2\x80\x9cfriends\xe2\x80\x9d is too broad. Carlos is not given enough guidance to\nidentify testator\xe2\x80\x99s friends. Thus, the trust does not have ascertainable beneficiaries.\nb) \xe2\x80\x9cI leave $35,000 in trust to Ronnie for the benefit of my snake, Jake.\xe2\x80\x9d The testator has not\ncreated a valid trust. The trust has an ascertainable beneficiary, Jake. Nonetheless, Jake does\nnot have the ability to hold the trustee accountable. The main reason the law requires a trust\nis to have beneficiaries is to ensure that there is someone to whom the trustee owes fiduciary\nduties. In this case, if Ronnie misappropriates the money, he has no consequence. Since this\nis a testamentary trust, the settlor will be dead when the trust takes effect. Thus, the only one\n63\n\n\x0cwho could hold Ronnie accountable is Jake, and he is unable to file a lawsuit. In Chapter\nThree, we will discuss the options available to the testator if she wants to make sure that Jake\nis protected.\nc) \xe2\x80\x9cI leave $375,000 in trust to Paul for the benefit of the members of my church choir.\xe2\x80\x9d\nThe testator has not created a valid trust. Whenever there is a transfer in trust for members\nof an indefinite class of persons, no enforceable trust is created. In this case, the class,\n\xe2\x80\x9cmembers of my church choir\xe2\x80\x9d is too indefinite because membership in the choir changes.\nThis is different from leaving money in trust for a class that consists of \xe2\x80\x9csisters\xe2\x80\x9d because that\ntitle refers to a finite class of people.\nd) \xe2\x80\x9cI leave $50,000 in trust to Anne for the benefit of my nieces and nephews. The testator\nhas created a valid trust because the class of nieces and nephews is readily identifiable.\nRegardless of the number of persons that may answer to the description, the trustee has a\nway of determining if the person has the correct blood relationship to the testator.\xe2\x80\x9d\n\nIn the Matter Estate of Boyer, 868 P.2d 1299\nOPINION\nDONNELLY Judge.\nAppellants, George A. Morrison, Roger Brastrup, and Lyle Speer, appeal from a\njudgment determining certain provisions of the Last Will and Testament of A. James Boyer,\ndeceased, were without legal effect, and ordering that Morrison be removed as personal\nrepresentative of the decedent\'s estate. We discuss whether the trial court erred in\ndetermining that the provisions of the decedent\'s will were insufficient to create a\ntestamentary trust.\nFACTS\nThe decedent died on September 23, 1991, at the age of ninety-one years. On\nSeptember 7, 1991, sixteen days before his death, he executed a last will and testament (the\nwill). An order approving Morrison\'s petition for admission of the will to informal,\nunsupervised probate was entered on October 3, 1991, and Morrison, an attorney and\npersonal friend of the decedent, was appointed as personal representative of the decedent\'s\nestate pursuant to the provisions of the will. The 1991 will of the decedent expressly revoked\nall prior wills made by him, including a will executed in 1977.\nOn November 20, 1991, the decedent\'s intestate heirs, Edward G. Boyer, John R.\nBoyer, and Mildred B. Harbaugh (Appellees), filed a petition to set aside the will, alleging\n64\n\n\x0cthat it was the product of undue influence and fraud; that the will and purported\ntestamentary trust provisions were invalid; and that Morrison\'s act of preparing the will and\ndesignating himself as both a trustee and beneficiary violated rules governing the practice of\nlaw. Appellees\' petition requested that the trial court declare the decedent\'s will to be void,\nthat they be declared the decedent\'s intestate heirs, and that they be awarded attorney fees.\nAppellees subsequently moved for summary judgment, asserting that the distributory\nprovisions of the will were legally insufficient, and that the Second and Third Articles of the\nwill were invalid. These Articles stated:\nSECOND: I give, devise and bequeath all of my estate and property, real, personal\nand mixed, wheresoever situated, of which I may be possessed, or to which I may be\nentitled at the time of my death, to my Trustee, George A. Morrison, in Trust.\nTHIRD: I direct my Trustee to distribute all of my estate according to my\ninstructions which I may give to him from time to time in my own handwriting or\notherwise, but nonetheless signed or initialed by me. In the event, by whatever\ncircumstance, I fail to leave such instructions to my Trustee, then I direct my Trustee\nto distribute my estate according to his discretion, bearing in mind the many\nconversations we have had together in which I have named those who are the\nobjects of my generosity.\nThe motion for summary judgment was accompanied by Appellants\' response to\nAppellees\' request for admissions. The response admitted that the decedent was a client of\nMorrison\'s and that Morrison had drafted the decedent\'s will; that apart from the will itself,\n\xe2\x80\x9cno written trust agreement executed by [the decedent] ... nam[es] ... Morrison as trustee\xe2\x80\x9d;\nand that there are no written instructions from the decedent to Morrison \xe2\x80\x9cof the kind\nreferred to in the [Third] Article of the last Will,\xe2\x80\x9d except for the will itself. Morrison\'s\nresponse to the request for admissions also stated that \xe2\x80\x9cI do have notes and notes of Donald\nHardesty regarding [the decedent\'s] wishes as to who is to receive his estate.\xe2\x80\x9d\nAppellants\' response to the motion for summary judgment contended that the trust\ncreated by the will and the will itself were valid because the beneficiaries were ascertainable;\nthat the will was sufficient to give Morrison a power of appointment, thus permitting him to\nselect the persons who should be the beneficiaries of the decedent\'s estate; that the persons\nto be eligible beneficiaries of the testamentary trust were capable of being ascertained; that\nthe testamentary trust did not violate the rule against perpetuities; and that Morrison\'s\n65\n\n\x0cpreparation of the will and his agreement to serve as trustee of the testamentary trust did not\nviolate any rules governing the practice of law. Appellants also denied that Morrison was a\ndevisee under the will.\nShortly after the filing of Appellees\' motion for summary judgment, Morrison filed a\nproposed schedule of distribution pursuant to his claim that the Third Article of the\ndecedent\'s will created a valid power of appointment. The schedule named the individuals\nthat he had selected as beneficiaries of the decedent\'s testamentary trust.\nA hearing on the motion for summary judgment was held on February 28, 1992. At\nthe hearing on their motion for summary judgment, Appellees abandoned that portion of\ntheir motion which sought to have the trial court declare the decedent\'s will void in its\nentirety. Instead, Appellees argued that the trial court should invalidate only those portions\nof the will that attempted to create a testamentary trust, or that purportedly gave Morrison a\npower of appointment.\nOn March 19, 1992, the trial court entered a judgment disposing of Appellees\'\nmotion for summary judgment, and ordered that the provisions of the decedent\'s \xe2\x80\x9cWill so\nfar as they attempt to set up a trust or to create a power of appointment are insufficient as a\nmatter of law\xe2\x80\x9d; that \xe2\x80\x9cthe Second and Third Articles of [the decedent\'s will] ... are ...\ninsufficient as a matter of law to create a trust, to establish a power of appointment or\notherwise to provide for the distribution of the Estate of the decedent[,] and ... the Estate\nshould be distributed as subsequently determined by this Court[.]\xe2\x80\x9d The judgment also\nprovided that Morrison should be removed as the personal representative of the decedent\'s\nestate.\nAppellants\' motion for reconsideration was denied on April 10, 1992.\nVALIDITY OF TESTAMENTARY TRUST\nThe judgment entered below found, among other things, \xe2\x80\x9cthat the provisions of [the\ndecedent\'s 1991] Will so far as they attempt to set up a trust or to create a power of\nappointment are insufficient as a matter of law[.]\xe2\x80\x9d\nAppellants argue that the trial court erred in determining that the provisions of the\nSecond and Third Articles of the decedent\'s will were insufficient to create a testamentary\ntrust. Appellants contend that a testamentary trust can be valid even though the beneficiaries\nwere not named in the will itself, and that the provisions of our Probate Code do not limit\ntestamentary trusts \xe2\x80\x9cto those which name the beneficiary [or beneficiaries] on the face of the\n66\n\n\x0cwill[.]\xe2\x80\x9d\nIt is undisputed that, apart from the language of the will itself, the decedent left no\nwritten or initialed instructions describing his intended beneficiaries. Moreover, the\nprovisions of the will are devoid of any language that would permit the trial court to\nascertain with any degree of reasonable certainty the prospective beneficiaries of the\nattempted testamentary trust. Under these circumstances we conclude that the trial court\ncorrectly determined that a valid testamentary trust did not exist.\nThe elements of a valid trust include a competent settlor and trustee, intent by the\nsettlor to create a trust, ascertainable trust res, a sufficiently ascertainable beneficiary or\nbeneficiaries, a legal purpose, and a legal term. (citations omitted) Because the identity of the\npersons intended to be \xe2\x80\x9cthe objects of [the decedent\'s] generosity\xe2\x80\x9d are not capable of\nreasonably being ascertained, we agree with the trial court that the provisions of the\ndecedent\'s will attempting to create a testamentary trust were not effective to establish an\nexpress trust. See In re Estate of Liginger, 14 Wis.2d 577, 111 N.W.2d 407, 409 (1961) (will\nleaving money to executor and directing executor to pay sums in his sole discretion to\npersons whom the decedent had previously indicated created a trust; however, trust failed\nbecause oral declarations of the decedent could not be admitted); see also Restatement\n(Second) of Trusts \xc2\xa7\xc2\xa7 112, 122 (1959) [hereinafter Restatement of Trusts]; 2 Austin W. Scott\n& William F. Fratcher, The Law of Trusts \xc2\xa7122 (4th ed. 1987); see also In re Will of Coe, 113\nN.M. at 360, 826 P.2d at 581 (elements of a valid trust include sufficiently ascertainable\nbeneficiary or beneficiaries); In re Estate of Kradwell, 44 Wis.2d 40, 170 N.W.2d 773, 774\n(1969) ( trust held not to have been created where uncertainty existed as to identity of\nbeneficiaries and no one was in position to enforce trust). See generally George E. Palmer, The\nEffect of Indefiniteness on the Validity of Trusts and Powers of Appointment, 10 UCLA L.Rev. 241,\n280-81 (1963); B.P. de R. O\'Byrne, Annotation, Disposition of Property of Inter Vivos Trust Falling\nin After Death of Settlor, Who Left Will Making No Express Disposition of the Trust Property, 30\nA.L.R.3d 1318 (1970).\nIn evaluating the arguments of Appellees that the attempted testamentary trust failed\nto identify the decedent\'s intended beneficiaries, we also find the reasoning of Restatement\nof Trusts, supra. Section 122 comment a, persuasive. Comment a notes:\nWhen class is indefinite. A class of persons is indefinite within the meaning of the\nrule stated in this Section if the identity of all the individuals comprising its\n67\n\n\x0cmembership is not ascertainable. The class may be such that it is possible to\ndetermine that certain persons fall within it and that other persons do not fall\nwithin it.... Thus, the \xe2\x80\x9cfriends\xe2\x80\x9d of the settlor or of another person constitute an\nindefinite class. So also, the class is indefinite where it includes any natural\nperson other than the transferee himself or his estate.\nThe provisions of the Second and Third Articles of the decedent\'s will specified that\nthe beneficiaries of his estate were to be selected by Morrison. However, the identity of the\nindividuals eligible to be selected as beneficiaries were not capable of being drawn from any\nspecifically identifiable class or category specified by the decedent. Under this posture the\nattempted trust was unenforceable.\nAppellants, relying in part upon Granado v. Granado, 107 N.M. 456, 760 P.2d 148\n(1988), and In re Estate of Shadden, 93 N.M. 274, 599 P.2d 1071 (Ct. App.), certs. denied, 93\nN.M. 172, 598 P.2d 215 (1979), also argue that the trial court erred in not permitting them to\nintroduce extrinsic evidence to clarify the decedent\'s intended trust beneficiaries. The record,\nhowever, fails to reflect that Appellants pursued this contention at the hearing on Appellees\'\nmotion for summary judgment. Nor do we find either Granado or In re Estate of Shadden\ndispositive here.\nGranado dealt with an order finding that the circumstances of that case were\nsufficient to give rise to the creation of an equitable trust, not an express trust. 107 N.M. at\n459, 760 P.2d at 151. Although the court in In re Estate of Shadden held that extrinsic evidence\nmay be admissible under certain circumstances to clarify an ambiguity in a will, that decision\ndoes not aid Appellants here. 93 N.M. at 278-79, 599 P.2d at 1075-76. Since it is undisputed\nthat the decedent failed to leave written, signed instructions identifying his intended\nbeneficiaries, extrinsic, oral testimony was not admissible to rectify defects in the will itself\nor to overcome the decedent\'s failure to leave proper written instructions concerning his\nbeneficiaries. Cf. Portales Nat\xe2\x80\x99l Bank v. Bellin, 98 N.M. 113, 117, 645 P.2d 986, 990 (Ct. App.\n1982) (unless will itself is ambiguous, extrinsic evidence is not admissible to supplement\nlanguage of will); NMSA 1978, \xc2\xa7 45-2-510 (Repl.Pamp.1989) (\xe2\x80\x9cAny writing in existence\nwhen a will is executed may be incorporated by reference if the language of the will\nmanifests this intent and describes the writing sufficiently to permit its identification.\xe2\x80\x9d);\nNMSA 1978, \xc2\xa7 45-2-513\n\n(Repl.Pamp.1989) (permitting testator to dispose of tangible\n\npersonal property, other than money, by reference in will to written statement or list, if\n68\n\n\x0cstatement or list is signed by testator and describes items and devisees with reasonable\ncertainty).\nAppellants\' brief-in-chief appears to also argue that in the event the provisions of the\ndecedent\'s will are insufficient to establish a valid testamentary trust, this Court should\ndetermine whether a resulting or constructive trust should be imposed. We need not\nconsider this argument because the questions of how the decedent\'s estate should be\ndistributed or the determination of the decedent\'s heirs at law, have not yet been addressed\nby the trial court.\nCONCLUSION\nThe order of the trial court granting Appellees\' motion for summary judgment and\nholding that the Second and Third Articles of the decedent\'s 1991 will are insufficient to\ncreate a trust or establish a power of appointment is affirmed.\nIT IS SO ORDERED.\nNotes, Questions and Problems\n1. It makes sense that a trust cannot be valid without beneficiaries. From a practicable\nperspective, the purpose of a private trust is to benefit a particular person or class of\npersons. Without beneficiaries, the trustee has no role to play. Thus, the creation of a trust is\nunnecessary. As the next part of the book will indicate, the trustee has to fulfill numerous\nduties. At the time the trustee accepts his role, the testator is deceased. Thus, the only person\nthat can hold the trustee accountable is the beneficiary. Thus, the trust instrument must\nname someone who has the authority to ensure that the trustee is abiding by the terms of the\ntrust. Problems arise in two situations. First, the testator names beneficiaries whose identities\ncannot be determined. This is especially true when the beneficiaries are a part of a class\nwithout a defined membership. Second, the testator identifies the beneficiaries, but they are\nnot capable of enforcing the trust.\n2. If it is clear that the testator meant to create a trust and a class is named in the trust,\nshould extrinsic evidence be presented to prove the members of the class? Instead of taking\na \xe2\x80\x9cone size fits all\xe2\x80\x9d approach, should the courts evaluate the existence of the beneficiaries on\na case by case basis? For instance, if the testator leaves money in trust for her best friends.\nMight it be easy to ascertain the names of the persons who fit that description?\n3. Problems\n69\n\n\x0cIn which of the following situations might the trust fail for lack of beneficiaries?\na). Roger executed a will stating, \xe2\x80\x9cI leave my house to Alexander in trust for my favorite\nnephew.\xe2\x80\x9d\nb). Alicia executed a will stating, \xe2\x80\x9cI leave the residuary of my state to Shannon in trust for\nthe man I have been dating for the last ten years.\xe2\x80\x9d\nc). Mesha executed a will stating, \xe2\x80\x9cI leave my apartment complex to Keisha in trust for the\nbenefit of the nonprofit corporation she plans to establish.\xe2\x80\x9d\nd). Melanie executed a will stating, \xe2\x80\x9cI leave my entire estate in trust to Feed The Children for\nthe benefit of the two little girls I started sponsoring on March 7, 2011.\xe2\x80\x9d\nClass Discussion Tool\nGloria was a third grade teacher. Gloria was childless and had never married. Nonetheless,\nshe constantly referred to the students in her class as her foster kids. At the beginning and\nend of every school year, Gloria gave gifts to all of the children in her third grade class.\nGloria made a good salary, so she annually placed 10% of her salary into a 401k account. As\nwith most retirement accounts, some of the money Gloria placed in her 401k account was\ninvested in the stock market. In 1998, Gloria executed a will containing the following\nprovision: \xe2\x80\x9cI leave the profits I will make on my 401k in 1999 to my sister, Delores in trust\nfor my foster children that are enrolled in my class during the 2000-2000 academic year.\nAfter I die, it is my hope that Delores will do the right thing and take care of the kids.\xe2\x80\x9d Has\nGloria created a valid testamentary trust? If not, create a valid trust that achieves Gloria\xe2\x80\x99s\nobjectives.\n\n70\n\n\x0cChapter 3 - Categories of Private\nTrusts\nTrusts fall in to two broad categories\xe2\x80\x94private and charitable. The creation of\ncharitable trusts will be discussed in Chapter Eight. The focus of this chapter is upon the\ndifferent types of private trusts. This chapter is divided into two parts. Part I introduces\nexpressed trusts. These are trusts that are expressly created by the settlor in a written\ninstrument. In this part, two types of private expressed trusts will be compared\xe2\x80\x94inter vivos\ntrusts and testamentary trusts. Inter vivos trusts are established during the settlor\xe2\x80\x99s lifetime,\nand are a part of the nonprobate system. To the contrary, a testamentary trust is created by\nwill. The testamentary trust does not come into existence until the will is probated. Part II\nconsists of a discussion of trusts that are created by operation of law. These are really\nimplied trusts that are established by courts. Therefore, those trusts do not have to conform\nto the requirements needed to create valid trusts. The implied trusts that will be discussed\nare the constructive trust, resulting trust, and the honorary trust.\n\n3.1.\n\nPrivate Expressed Trusts\n3.1.1. Inter vivos Trusts vs. Testamentary Trusts\nThe focus of this book is on testamentary trusts. Thus, the manner in which\n\ntestamentary trusts are created was discussed in Chapter Two. A basic knowledge of the law\ngoverning inter vivos trusts is helpful because those types of trusts are one of the most\ncommonly used will substitutes. The property in both the inter vivos and the testamentary\ntrusts is not distributed to the third party beneficiary until after the settlor\xe2\x80\x99s death. Inter\nvivos trusts are created during the settlor\xe2\x80\x99s lifetime. They can be revocable or irrevocable. If\nthe inter vivos trust does not involve an interest in real property, it may be created orally.\nThe testamentary trust can only be created by a written instrument that satisfies the Wills\nAct. The moment the inter vivos trust is created the beneficiaries become equitable owners\nof the trust corpus. The beneficiaries of the testamentary trust do not receive any interest in\nthe trust property until after the death of the settlor. An inter vivos trust may be created by a\ndeclaration of trust or a deed of trust. In order to create the inter vivos trust by a declaration\nof trust, the settlor must declare that he holds certain property in trust and manifest an intent\n71\n\n\x0cto hold the property as such. When creating a trust by declaration, the settlor declares that\nshe is the trustee of the property for the benefit of herself during her lifetime and that the\nremainder of the trust property will be distributed to a third party when she dies. The third\nparty will be receiving property from the trust and not the will. While she is alive, the settlor\nhas the power to revoke the trust and the right to the trust income. Since the settlor is also\nthe trustee, she has the right to manage the trust property. The beneficiary receives a vested\ninterest in the trust property until it is revoked. In some cases, the settlor gives up her\ncontrol and makes the inter vivos trust irrevocable. An irrevocable inter vivos trusts looks a\nlot like a testamentary trust. The testamentary trust is revocable until the testator dies. The\nsettlor may also establish an inter vivos trust by a deed of trust. A deed of trust transaction\ninvolves three parties\xe2\x80\x94the settlor, the trustee, and the beneficiary. The settlor transfers the\nproperty to be held in trust to a third party who is to act as the trustee. When the settlor dies,\nthe trustee distributes the property to the beneficiaries or hold it in further trust. While the\nsettlor is alive, she is the only person that is reaping the benefits of the trust. One of the\nmost litigated issues is the nature of the interest that the beneficiary has in a revocable inter\nvivos trust.\n\nCate \xe2\x80\x93Schweyen v. Cate, 15 P.3d 467\nJustice JAMES C. NELSON delivered the Opinion of the Court.\n\xc2\xb6 1 This is an appeal from an Order and Rationale entered by the Eleventh District\nCourt, Flathead County, on December 14, 1998, denying Personal Representative JoAnn\nCate\'s (JoAnn) motion for summary judgment and granting a motion for summary judgment\nin favor of Shannon Cate Schweyen, individually, and as Conservator of Sara Cate, a minor\n(collectively referred to herein as Shannon). The Order provided that JoAnn would convey\nvarious assets to Shannon and take other actions with respect thereto, and also awarded\nShannon her costs.\n\xc2\xb6 2 We reverse and remand for further proceedings consistent with this opinion.\n\xc2\xb6 3 On appeal, JoAnn raises the following issues:\n1. Whether the District Court erred in finding that the 1988 document represents a\ntestamentary trust as opposed to an inter vivos trust which failed for lack of delivery of the\ndocument or the trust property to the trustee.\n2. Whether the District Court erred in finding that a testamentary trust is not subject to the\nhomestead allowance, exempt property, family allowance, rights of creditors, elective share\n72\n\n\x0cof the surviving spouse, and to expenses of administration.\nWe conclude that the first issue is dispositive, and therefore decline to address the\nsecond issue.\nFACTUAL AND PROCEDURAL BACKGROUND\n\xc2\xb6 4 The focus of this controversy is a handwritten document drafted by Jerome J.\nCate (Jerry), a practicing attorney in Montana for nearly 30 years and now deceased, entitled\n\xe2\x80\x9cIrrevocable Trust Reserving Income For Life.\xe2\x80\x9d The document was signed by Jerry and\ndated January 2, 1988. Jerry died intestate on April 4, 1995.\n\xc2\xb6 5 The trust document purported to \xe2\x80\x9csell, assign and convey\xe2\x80\x9d various mineral\ninterests, which Jerry had inherited from his mother and her brother, to a trust for the\nbenefit of his daughters from his first marriage, Shannon, Kristin, and Sara, with Shannon\nserving as trustee. Jerry reserved a life interest for himself, and then, upon his death, the\nthree daughters would receive a term of years interest for 20 years, and then the corpus\nwould be distributed outright to the daughters or their heirs pursuant to a \xe2\x80\x9cper stirpes\xe2\x80\x9d\ndeclaration. The trust document apparently was drafted by Jerry in anticipation of his\nremarriage to the Appellant, JoAnn, in February of 1988. The document reflects this,\nproviding that \xe2\x80\x9cbearing in mind specifically that I intend to marry again on the 14th of\nFebruary, 1988, [I] do hereby sell, assign and convey ...\xe2\x80\x9d The undisputed facts show that\nJerry never transferred or conveyed the named mineral interests to the trust or otherwise\ndelivered the trust property to Shannon, the named trustee.\n\xc2\xb6 6 At the time of his death, JoAnn, in her capacity as personal representative of\nJerry\'s estate, refused to convey the alleged trust property upon the request of the daughters.\nConsequently, Shannon, acting individually and as conservator for her youngest sister, Sara,\nfiled a petition in September of 1997, requesting that the District Court declare that either an\nexpress or resulting trust in the mineral interests existed. (The eldest daughter, Kristin, is not\na party to this action.) At that time, the handwritten document had not been located; rather,\na 1993 bill of sale document executed by Jerry indicated the existence of the trust.\n\xc2\xb6 7 The 1993 bill of sale was executed to convey Jerry\'s assets to a \xe2\x80\x9cjoint revocable\ninter vivos trust\xe2\x80\x9d which he drafted in 1990. The bill of sale provided: \xe2\x80\x9cThis Bill of Sale and\nAssignment does not include any mineral interests owned by Jerome J. Cate, a/k/a Jerry\nJoseph Cate, which have heretofore been placed in trust for the benefit of Shannon and Sara\nCate.\xe2\x80\x9d Kristin\'s name was apparently omitted from this reference due to a rift between her\n73\n\n\x0cand Jerry. Thus, Shannon pursued the legal theory that the referenced trust was testamentary\nin nature, and therefore JoAnn, as personal representative of Shannon\'s father\'s estate, must\nfund the testamentary trust with the mineral interests owned by Jerry at the time of his\ndeath.\n\xc2\xb6 8 Once the 1988 trust document was found, Shannon did not alter her legal theory,\nmaintaining that the handwritten trust document was testamentary as well.\n\xc2\xb6 9 In response to Shannon\'s petition, JoAnn contended that the handwritten\ndocument was not a valid testamentary trust. She argued that the document intended to\ncreate an inter vivos trust, which Jerry never executed by conveying or otherwise transferring\nthe interests to the trust or Shannon. Therefore, according to JoAnn, the handwritten trust\ndocument is unenforceable, and the identified mineral interests should be included within\nJerry\'s estate.\n\xc2\xb6 10 Both parties moved for summary judgment. Following a July 29, 1998 hearing,\nthe District Court denied JoAnn\'s motion for summary judgment and granted summary\njudgment in favor of Shannon.\n\xc2\xb6 11 The District Court concluded that to qualify as a testamentary disposition, the\ndocument need only comply with Montana\'s statutory requirements for a will. The court\nconcluded that the handwritten trust document was testamentary. The court stated that\n\xe2\x80\x9c[t]he fact that Decedent chose to reserve income for life when he created the trust is not\ninconsistent with an intention to create a testamentary disposition.\xe2\x80\x9d The court further\nconcluded that the \xe2\x80\x9cevidence is clear, convincing and overwhelming that the intent of\nDecedent Jerome J. Cate was to establish a testamentary trust with his daughters to be the\nbeneficiaries thereof.\xe2\x80\x9d The court also ruled that \xe2\x80\x9cRespondent\'s contention that the\ninstrument is a failed attempt to create an inter vivos transfer of the property is belied by the\nholographic nature of the instrument.\xe2\x80\x9d\n\xc2\xb6 12 JoAnn filed a motion to amend the order so that it would reflect that the subject\ntrust properties, if indeed testamentary, should first be subject to probate, meaning the\nproperty potentially would be reduced by various statutory allowances and exemptions. This\nmotion was deemed denied.\n\xc2\xb6 13 JoAnn appealed.\nSTANDARD OF REVIEW\n\xc2\xb6 14 This Court reviews an order granting summary judgment de novo, using the same\n74\n\n\x0crule 56, M.R. Civ. P., criteria applied by the district court. Se Calcaterra v. Montana Resources,\n1998 MT 187, \xc2\xb69, 289 Mont. 424, \xc2\xb69, 962 P.2d 590, \xc2\xb69. This Court looks to the pleadings,\ndepositions, answers to interrogatories, admissions on file, and affidavits to determine the\nexistence or nonexistence of a genuine issue of material fact. See Erker v. Kester, 1999 MT\n231, \xc2\xb617, 286 Mont. 123, \xc2\xb617, 988 P.2d 1221, \xc2\xb617.\n\xc2\xb6 15 Here, no material facts remain in dispute. Rather, both parties contend that\nthey are, respectively, entitled to judgment as a matter of law, in light of the District Court\'s\nconclusion that the trust document in question was testamentary, rather than inter vivos. As\nwith the judicial interpretation and construction of any instrument, the question of whether\nany particular language creates an express trust, given the circumstances under which the\ntrust was executed, is a question of law for the court to decide. See Estate of Bolinger (1997),\n284 Mont. 114, 118, 943 P.2d 981, 983 (citation omitted). Thus, accepting the facts found by\nthe District Court, we will proceed to determine if either party was entitled to judgment as a\nmatter of law.\nDISCUSSION\nWhether the District Court erred in finding that the 1988 document represents a\ntestamentary trust as opposed to an inter vivos trust which failed for lack of delivery of the\ndocument of the trust property to the trustee.\n\xc2\xb6 16 JoAnn argues that the trust document in dispute is inter vivos, rather than\ntestamentary, and is therefore unenforceable because no property was ever transferred or\nconveyed to it by her deceased husband, Jerry, as required by law. Thus, the named trust\nproperty should remain in Jerry\'s estate, and she should be entitled to judgment as a matter\nof law.\n\xc2\xb6 17 Shannon contends that the District Court\'s conclusion that the trust document\nwas testamentary is correct, and therefore the trust is valid because her father intended that\nthe trust would remain \xe2\x80\x9cdry\xe2\x80\x9d until his death at which time his estate would transfer the\nmineral interests. Alternatively, Shannon argues that even if an express trust technically\ncannot be enforced, then an involuntary trust should be imposed to achieve an equitable\nresult based on her father\'s clear intent expressed in the document.\n\xc2\xb6 18 The theories set forth by both parties comport with statutory law governing\ncreation of trusts in Montana. Under \xc2\xa772-33-203, MCA, a trust is created \xe2\x80\x9conly if there is\ntrust property .\xe2\x80\x9d Under \xc2\xa772-33-201(2), MCA, a valid inter vivos trust requires that the owner\n75\n\n\x0ctransfer the subject property to a trustee during the owner\'s lifetime. In contrast, under\nsubsection (3), a valid trust may be created when the property is identified as a \xe2\x80\x9ctestamentary\ntransfer\xe2\x80\x9d to a trustee. Under \xc2\xa772-33-216, MCA, a court may exercise its equitable powers\nand impose a \xe2\x80\x9cresulting trust\xe2\x80\x9d to fulfill the manifest intent of the trustor if the trust fails to\nfulfill this intent.\n\xc2\xb6 19 Further, Montana\'s statutory requirements generally comport with the\nRestatement (Second) of Trusts (1959), which often has been relied on by this Court, and\nhas been presented as persuasive authority by the parties here. See, e.g., McCormick v. Brevig,\n1999 MT 86, \xc2\xb6 63, 294 Mont. 144, \xc2\xb6 63, 980 P.2d 603, \xc2\xb6 63. See also \xc2\xa772-33-201, MCA,\nOfficial Comments; Restatement (Second) of Trusts \xc2\xa7 17 (identifying five methods of\ncreating trusts similar to subsection (1) through (5) under \xc2\xa772-33-201, MCA).\n\xc2\xb6 20 As a preliminary matter, we shall first dispense with the fundamentally flawed\nargument that the trust document at issue was testamentary. We conclude that as a matter of\nlaw the trust document clearly and convincingly expresses an intent to create an inter vivos\ntrust that would take effect during Jerry\'s lifetime, notwithstanding whatever alleged\nmisunderstandings or intentions the he may have expressed or exercised at a later date.\n\xc2\xb6 21 Our examination of the construction of the trust in question here is guided by\nseveral steadfast rules that were recently consolidated in this Court\'s decision in Estate of\nBolinger (1997), 284 Mont. 114, 120-22, 943 P.2d 981, 985. First, we must seek out the\ntrustor\'s \xe2\x80\x9cintent,\xe2\x80\x9d so far as possible. Second, we must look to the language of the trust\nagreement itself to ascertain this intent. Third, the words used in the instrument are to be\ntaken in their ordinary and grammatical sense unless a clear intention to use them in another\nsense can be ascertained. Finally, the burden of proof to establish the existence of a trust-or\nin this case a particular \xe2\x80\x9ckind\xe2\x80\x9d of trust-is upon the party who claims it, and must be founded\non evidence which is unmistakable, clear, satisfactory, and convincing. See Bolinger (1997), 284\nMont. at 120-22, 943 P.2d at 985. (citations and internal quotations omitted).\n\xc2\xb6 22 Removing superfluous verbiage, the handwritten document, identified as an\n\xe2\x80\x9cIrrevocable Trust Reserving Income For Life\xe2\x80\x9d provides:\nI Jerome J. Cate ... do hereby sell, assign and convey all of my oil gas and\nmineral interests ... to my daughter, Shannon Cate, to hold in trust for her\nbenefit and the benefit of her sister Kristin Cate and her sister Sara Cate, as\nShannon in her sole discretion shall see fit, for a period of time twenty years\n76\n\n\x0csubsequent to the date of my death, at which time she shall distribute those\nmineral interests in equal shares ... reserving, however, to myself the income\nfrom this trust for my lifetime.\n\xc2\xb6 23 Shannon argues at length that the foregoing writing technically satisfies statutory\nrequirements for a holographic will, and is therefore \xe2\x80\x9ctestamentary.\xe2\x80\x9d See \xc2\xa7\xc2\xa772-2-522 and 531,\nMCA (providing rules for holographic wills and testamentary additions to trusts).\n\xc2\xb6 24 A testamentary trust, however, not only must comply with the statutory\nrequirements for a will, but also must take effect \xe2\x80\x9conly upon the testator\'s death.\xe2\x80\x9d See Black\'s\nLaw Dictionary at 1475 (6th ed.1990); Restatement (Second) of Trusts \xc2\xa7 26, Comment a.,\nand \xc2\xa7 56, Comment b. (stating that in order for a disposition to be \xe2\x80\x9ctestamentary,\xe2\x80\x9d the\nowner of property who transfers property or deed of conveyance to trustee inter vivos must\nmanifest an intention that the conveyance shall not be effective until his death). Further, in\norder for a document to be deemed \xe2\x80\x9ctestamentary,\xe2\x80\x9d generally, it also must be revocable, and\nthe settlor or trustor must retain the property under his control during his life. See Black\'s\nLaw Dictionary at 1474 (6th ed.1990). Although disputed by Shannon, these general\ndefinitions actually concur with the Restatement definition which she recites in her brief: \xe2\x80\x9c[a]\ntestamentary disposition of property is a disposition to take effect upon the death of the\nperson making the disposition and as to which he has substantially entire control until his\ndeath.\xe2\x80\x9d Restatement (Second) of Trusts \xc2\xa7 53, Comment a. This Restatement section adds\nthat such a disposition is testamentary \xe2\x80\x9cwhether made by a will or a document which\npurports to be a will or made by a transaction inter vivos, as by a deed, unsealed writing or\nparole declaration or transfer.\xe2\x80\x9d\n\xc2\xb6 25 Thus, in order to be construed as \xe2\x80\x9ctestamentary,\xe2\x80\x9d a trust document must first\nand foremost express a clear and unmistakable intent that the trust will not take effect until\nthe testator\'s death. Following this rule generally requires that the trustor retains the power\nof revocation, and expresses no intention to pass a present interest. See In re Gasparovich\xe2\x80\x99s\nEstate (1971(, 158 Mont. 21, 23-24, 487 P.2d 1148, 1150 stating \xe2\x80\x9ccommon sense\xe2\x80\x9d rule that\nthe true test of the character of an instrument is not the testator\'s realization that it is a will,\nbut his intention to create a revocable disposition of his property, to accrue and take effect\nonly upon his death, and passing no present interest). Therefore, a \xe2\x80\x9ctestamentary\xe2\x80\x9d\ndisposition is usually incompatible with a trust established by a trustor who retains a life\ninterest, as a beneficiary of the trust, although a new beneficiary or beneficiaries acquire an\n77\n\n\x0cinterest upon the trustor\'s death. See generally Restatement (Second) of Trusts \xc2\xa7\xc2\xa7 56,\nComment f. and 57; 76 Am. Jur. 2d \xc2\xa7\xc2\xa7 33 and 88 (1992) (stating that a \xe2\x80\x9c reservation of a life\nestate or interest does not make a disposition in trust a testamentary disposition\xe2\x80\x9d).\n\xc2\xb6 26 Suffice to say, to construe the foregoing document as \xe2\x80\x9ctestamentary\xe2\x80\x9d would\nrequire an alchemist\'s crucible. While not nimbly drafted, the document nevertheless\nexpresses a clear and convincing intent that it would take effect inter vivos, or during Jerry\'s\nlifetime. Rather than anticipating a future testamentary transfer by such common language as\n\xe2\x80\x9cgive, devise, and bequeath,\xe2\x80\x9d the transfer is that of an ordinary, present conveyance: \xe2\x80\x9cI ... do\nhereby sell, assign and convey ...\xe2\x80\x9d Further, there is no preceding or subsequent qualification\nof this transfer language by other language such as \xe2\x80\x9cupon my death\xe2\x80\x9d or \xe2\x80\x9cwhen I die\xe2\x80\x9d or \xe2\x80\x9cin\nthe event of my death.\xe2\x80\x9d Rather, the \xe2\x80\x9ctwenty years subsequent to the date of my death\xe2\x80\x9d\nlanguage which appears later merely serves as a fixed termination date-rather than a\ncommencement date-for the trust itself. Although Jerry did in fact retain legal title over the\ntrust property, he did not name himself as trustee; rather, this duty is expressly accorded to\nhis daughter, Shannon, meaning the document expresses a clear intent that Jerry planned to\ndivest himself of legal title over the named trust property and thereby transfer a present\ninterest. In turn, the \xe2\x80\x9cincome from this trust for my lifetime\xe2\x80\x9d language indicates that the\ntrust would come into existence during Jerry\'s lifetime, and he would become the trust\'s first\nbeneficiary. Finally, the document itself is identified as \xe2\x80\x9cirrevocable,\xe2\x80\x9d which in light of the\naccompanying language indicates an unmistakable intent to pass legal title to the trust during\nJerry\'s lifetime, and thereby remove the property from his estate.\n\xc2\xb6 27 Taken as a whole, the evidence that the trust document is testamentary does not\nrise to the level of being unmistakable, clear, satisfactory, or convincing. Rather, the opposite\nis true: the trust document convincingly displays all the attributes of an inter vivos transaction\nthat the trustor intended would take place at the time the document was drafted or soon\nthereafter. We therefore hold that the District Court erred in concluding that Jerry Cate\'s\nhandwritten trust document was testamentary.\n\xc2\xb6 28 Pursuant to JoAnn\'s summary judgment argument that was denied by the\nDistrict Court, we next turn to the issue of \xe2\x80\x9cdelivery\xe2\x80\x9d to determine whether the trust in\nquestion was ever made legally effective, or instead remained a \xe2\x80\x9cphantom\xe2\x80\x9d or \xe2\x80\x9cdry\xe2\x80\x9d trust and\ntherefore unenforceable. See generally McCormick v. Brevig, 1999 MT 86, 294 Mont. 144, 980\nP.2d 603.\n78\n\n\x0c\xc2\xb6 29 This Court has concluded that, under the common law, in order to establish an\ninter vivos trust, there must be a transfer of property. McCormick, \xc2\xb6 63 (quoting Restatement\n(Second) of Trusts \xc2\xa7 17 and 32). We quoted from the Restatement of Trusts that \xe2\x80\x9cif the\nowner of property makes a conveyance inter vivos of the property to another person to be\nheld by him in trust for a third person and the conveyance is not effective to transfer the\nproperty, no trust of the property is created.\xe2\x80\x9d McCormick, \xc2\xb6 63 (quoting \xc2\xa732). See also Am. Jur.\n2d \xc2\xa7 49 (1992) (stating general rule that a separation of legal title and equitable ownership of\nthe trust property is necessary to the formation of an express trust); Am. Jur. 2d \xc2\xa7 52 (1992)\n(stating general rule that in order to create a valid trust, there must be an actual conveyance\nor transfer of property).\n\xc2\xb6 30 The undisputed facts clearly reveal that Jerry never delivered, or conveyed, or\notherwise attempted to transfer the identified trust property to the named trustee, his\ndaughter Shannon, or to the trust itself with or without her knowledge.\n\xc2\xb6 31 Further, the trust document itself is insufficient to serve as an instrument of\nconveyance. Although the property is clearly identified in the handwritten document, we\nconcluded under the similar circumstances described in McCormick that in order for a trust\ndocument to serve as an instrument of conveyance, the person executing the trust document\nmust subsequently redeliver, confirm, ratify, or adopt the transfer. See McCormick, \xc2\xb6 66\n(requiring \xe2\x80\x9csome further indication of the grantor\'s intent to divest himself of valuable real\nproperty\xe2\x80\x9d and concluding that express trust was invalid as a matter of law because there was\n\xe2\x80\x9cno proper conveyance into the trust of trust property\xe2\x80\x9d).\n\xc2\xb6 32 The reasons for Jerry\'s omissions, as JoAnn indicates in her brief, are known\nonly to Jerry. That the undisputed facts clearly show that Jerry intended to create some form\nof a trust that would benefit only his three daughters unfortunately does not alter the fact\nthat he never took the affirmative legal steps necessary for the trust to become enforceable\nas either a testamentary or inter vivos trust.\n\xc2\xb6 33 Thus, we have two options, pursuant to our de novo review: to either agree with\nJoAnn and conclude that no trust existed, and therefore the property should remain in\nJerry\'s estate, or that an involuntary or \xe2\x80\x9cresulting\xe2\x80\x9d trust, one that would carry out Jerry\'s\nintent, should be enforced, which Shannon argues would achieve a correct, equitable result.\nWe conclude, however, that the underlying \xe2\x80\x9cresulting trust\xe2\x80\x9d equitable doctrine is entirely\nincongruous with the factual circumstances presented here.\n79\n\n\x0c\xc2\xb6 34 An involuntary trust is a creature of equity, where a court imposes or creates a\ntrust to work an equitable result. See Eckart v. Hubbard (1979), 184 Mont. 320, 326, 602 P.2d\n988, 991. Under \xc2\xa772-33-216, MCA, a court may exercise its equitable powers and impose a\n\xe2\x80\x9cresulting trust\xe2\x80\x9d to fulfill the manifest intent of the trustor if the trust fails to fulfill this\nintent. However, as a matter of law, such a \xe2\x80\x9cresulting trust\xe2\x80\x9d creates an equitable reversionary\ninterest whereby the original transferor or his heirs become the beneficiary of the trust. See\nEckart v. Hubbard (1979), 184 Mont. at 327, 602 P.2d at 992. See also Restatement (Second) of\nTrusts \xc2\xa7 404 and Chapter 12 Introductory Note (stating that the beneficial interest \xe2\x80\x9csprings\nback or results to the person who made the disposition or to his estate, and the person\nholding the property holds it upon a resulting trust for him or his estate\xe2\x80\x9d). To illustrate, Jerry\ncould have created a trust as specified in his handwritten document and properly transferred\nthe property. Upon his death, if the beneficiaries did not survive him and left no issue, the\ntrust would have \xe2\x80\x9cfailed\xe2\x80\x9d pursuant to its own terms because no subsequent beneficiaries\nwere named. See \xc2\xa772-33-216, MCA,. As an equitable remedy, the \xe2\x80\x9cresulting\xe2\x80\x9d remainder\nwould revert to Jerry\'s estate, although this specific transfer of interest was not expressed in\nthe trust document.\n\xc2\xb6 35 Thus, even if we were to impose a resulting trust, as Shannon argues, the\nproperty would nevertheless revert to Jerry\'s estate. This result is no different, therefore,\nthan if we concluded that no trust exists. See Eckart v. Hubbard (1979), 184 Mont. at 328, 602\nP.2d at 992 (describing identical circumstances and concluding that trust property must be\nreturned to trustor\'s estate).\n\xc2\xb6 36 The other type of a involuntary trust, the constructive trust, which is based on\nthe equitable remedy of unjust enrichment-i.e., the plaintiff brings a suit to enforce a\nconstructive trust seeking to recover specific property-was not argued by Shannon, and is\ntherefore not available as an equitable remedy. See \xc2\xa772-33-219, MCA (providing that a\nconstructive trust arises when a person holding title to property is subject to an equitable\nduty to convey it to another on the ground that the person holding title would be unjustly\nenriched if he were permitted to retain it).\n\xc2\xb6 37 Accordingly, we conclude that the inter vivos trust document at issue failed due to\nthe lack of a transfer of property to the trust during Jerry Cate\'s lifetime, and therefore no\nenforceable trust existed. Based on this conclusion, we hold that the District Court erred\nwhen it determined that Shannon was entitled to judgment as a matter of law, and denied\n80\n\n\x0cJoAnn\'s motion for summary judgment.\n\xc2\xb6 38 This matter is reversed and remanded for further proceedings consistent with\nthis opinion.\nChief Justice J.A. TURNAGE, dissenting.\n\xc2\xb6 39 I respectfully dissent from the majority opinion.\n\xc2\xb6 40 The District Court concluded that the handwritten trust document executed by\nJerome Cate met the requirements of the Montana Statute of Wills and would be valid as a\nholographic will. It further concluded that JoAnn Cate had produced no persuasive authority\nthat an otherwise valid testamentary disposition which was never revoked is invalid simply\nbecause the testator chose to designate the disposition as \xe2\x80\x9cirrevocable.\xe2\x80\x9d\n\xc2\xb6 41 Under long-settled rules of construction of testamentary instruments, including\ntrusts, the testator\'s intent controls. See, e.g., Estate of Bolinger (1997), 284 Mont. 114, 120-21,\n943 P.2d 981, 985. On this record, Jerome Cate\'s intent is crystal clear-to create a\ntestamentary trust for his daughters. The reason for that intent is also clear-to pass on to his\nblood descendants mineral interests which he himself had inherited from his mother and her\nbrother as part of his family legacy. If the majority cannot discern that intent, then their\nvision is fogged.\n\xc2\xb6 42 I would affirm the decision of the District Court.\nJustice W. WILLIAM LEAPHART, dissenting.\n\xc2\xb6 43 I join in the dissent of Chief Justice Turnage and add the following\nconsiderations as bearing upon my conclusion that the District Court was correct in\nconcluding that this document was a valid holographic testamentary trust:\n\xc2\xb6 44 1. The author, in typical precatory and testamentary fashion, characterizes\nhimself as being of \xe2\x80\x9csound and disposing mind[.]\xe2\x80\x9d\n\xc2\xb6 45 2. Cate was cognizant that he was about to marry a woman whom he had\nknown for less than a month and that by his marriage to her he would have stepchildren\nwhom he barely knew.\n\xc2\xb6 46 3. The language \xe2\x80\x9ctwenty years subsequent to the date of my death,\xe2\x80\x9d indicates\nboth a commencement date (date of death) and a fixed termination date, twenty years\nthereafter.\n\xc2\xb6 47 4. Cate, an experienced attorney, knew how to fund an inter vivos trust but did\nnot do so here.\n81\n\n\x0c\xc2\xb6 48 5. Cate used a testamentary reference to the distribution of the mineral interests\nto his daughters \xe2\x80\x9cor their heirs per stirpes[.]\xe2\x80\x9d\n\xc2\xb6 49 6. Cate died leaving no formal last will and testament.\n\xc2\xb6 50 7. The beneficiaries of the testamentary trust were his daughters; his natural\nheirs and expected recipients of the mineral interests he had inherited from his mother and\nuncle.\n\xc2\xb6 51 8. As typical with holographic documents, the document is handwritten and not\nnotarized.\n\xc2\xb6 52 Although there are certainly other provisions in the document which lend\nthemselves to a contrary interpretation, when the document is read as a whole and in light of\nthe circumstances under which it was executed, it is clear to me that Cate intended it to be\ntestamentary in nature. Accordingly, I respectfully dissent.\n\nJohnson v. Kotyck, 90 Cal. Rptr. 2d 99\nBOEN, P.J.\nIs a beneficiary of an inter vivos trust entitled to receive trust accountings while the\ntrustor is under the care and custody of a court-appointed conservator? We conclude that\nthe beneficiary is not entitled to an accounting for a trust that remains revocable despite the\ninfirmity of the trustor and the ensuing conservatorship.\nFACTS\nElisabeth Frudenfeld is the trustor and original trustee of an inter vivos trust created\non December 7, 1987 (the Trust). On August 30, 1996, the superior court appointed a\nprofessional conservator to manage Frudenfeld\'s affairs after finding that Frudenfeld is\nunable to care for herself. The court also appointed legal counsel to represent Frudenfeld in\nall conservatorship proceedings. The successor trustee of the Trust is respondent Karla\nKotyck, one of Frudenfeld\'s daughters.\nThe Trust and its April 9, 1992 amendment contain the following clause regarding\nrevocation: \xe2\x80\x9cThis declaration of trust, and the trusts evidenced thereby, may be revoked at\nany time by the Trustor, during the lifetime of the Trustor, by the Trustor delivering written\nnotice of revocation to the Trustee.\xe2\x80\x9d The Trust also provides that it shall become irrevocable\nupon the death of the trustor.\nA petition was brought under Probate Code section 17200 by appellant Laurie Cook\nJohnson, Frudenfeld\'s daughter and a Trust beneficiary. Johnson asked the probate court (1)\n82\n\n\x0cto order the trustee to prepare a report and accounting for the Trust and (2) to review the\ntrustee\'s activities. Trustee Kotyck demurred to Johnson\'s petition, maintaining that Johnson\nhas no right to receive accountings or to question the trustee\'s actions with regard to the\nTrust. The probate court sustained Kotyck\'s demurrer to the petition without leave to\namend and dismissed the petition with prejudice. This timely appeal followed.\nDISCUSSION\nTrial Court\'s Jurisdiction\nA trust beneficiary may petition the probate court regarding matters affecting the\ninternal affairs of a trust, unless the trust instrument expressly withholds authority to\nproceed. Among other powers, the court has jurisdiction (1) to interpret the terms of the\ntrust, (2) to determine the existence or nonexistence of any power, privilege, duty or right,\n(3) to instruct the trustee, and (4) to compel the trustee to report information about the trust\nor account to the beneficiary. (\xc2\xa717200, subds. (b)(1), (2), (6), (7); Estate of Heggstad (1993) 16\nCal. App. 4th 943, 951-952, 20 Cal. Rptr.2d 433 ).\nThe probate court\'s jurisdiction extends to the type of trust involved in this appeal.\n\xe2\x80\x9cSection 17200 makes no distinction between inter vivos trusts (i.e., living trusts) and\ntestamentary trusts (i.e., trusts created by a will). Further, case law supports a probate court\'s\njurisdiction under section 17200 to consider petitions regarding inter vivos trusts [citation],\nand nothing in the statutory scheme indicates any legislative intent to restrict the jurisdiction\nof the probate court to only those matters arising after the death of a trustor.\xe2\x80\x9d Conservatorship\nof Irvine (1995) 40 Cal. App.4th 1334, 1342, 47 Cal. Rptr.2d 587)\n3. Rights of a Beneficiary of an Inter Vivos Trust\nAppellant Johnson asks this court to determine only one disputed point of law, to\nwit: Does the Probate Code give Johnson the right to receive trust accountings from her\nsister Kotyck, so long as their mother is alive and her affairs are being administered by a\nconservator? The short answer is \xe2\x80\x9cNo\xe2\x80\x9d and the explanation follows.\nJohnson agrees at the outset that the trustee of a revocable trust generally has no\nduty to report or account to the trust beneficiaries and that the beneficiaries have no right to\nreceive such accountings. (See \xc2\xa7 16964). However, she goes on to argue that \xe2\x80\x9csince the settlor\nhas been declared incompetent, she no longer has the power to revoke.\xe2\x80\x9d Johnson reasons\nthat the beneficiaries of the Trust obtained the right to an accounting once Mrs. Frudenfeld\nbecame a conservatee, because \xe2\x80\x9cNo one has the power to revoke\xe2\x80\x9d and Johnson\'s rights to\n83\n\n\x0ctake from the trust are now vested. As we shall see, it is untrue that no one has the power to\nrevoke the conservatee\'s inter vivos trust.\nUnder the Probate Code, the legal rights of a conservatee\xe2\x80\x94including the right to\nrevoke a trust\xe2\x80\x94pass to the conservator, under the close scrutiny of the superior court. The\nconservator may petition the court for an order \xe2\x80\x9cExercising the right of the conservatee (i)\nto revoke a revocable trust or (ii) to surrender the right to revoke a revocable trust ....\xe2\x80\x9d\n(\xc2\xa72580, subd.(b)(11)) The court is, in this situation, \xe2\x80\x9cthe conservatee\'s decisionmaking\nsurrogate\xe2\x80\x9d because \xe2\x80\x9c[i]n essence the statute permits the court to substitute its judgment for\nthat of a conservatee.\xe2\x80\x9d Conservatorship of Hart (1991) 228 Cal. App.3d 1244, 1250, 279 Cal.\nRptr. 249). The court must satisfy itself that it is \xe2\x80\x9cfully and fairly informed\xe2\x80\x9d about the\nproposed exercise of the conservatee\'s legal rights. Id. at p. 1254, 279 Cal. Rptr. 249).\nThe only limitation on the court\'s ability to authorize the revocation of a\nconservatee\'s revocable trust is if the trust instrument \xe2\x80\x9c(i) evidences an intent to reserve the\nright of revocation exclusively to the conservatee, (ii) provides expressly that a conservator\nmay not revoke the trust, or (iii) otherwise evidences an intent that would be inconsistent\nwith authorizing or requiring the conservator to exercise the right to revoke the trust.\xe2\x80\x9d\n(\xc2\xa72580, subd.(b)(11). We have examined the Trust in this case and all of its amendments.\nThere is nothing in the Trust or its amendments which expressly or impliedly prevents the\nconservator from revoking the Trust or which reserves the right of revocation exclusively to\nFrudenfeld. Thus, the limitations listed above do not apply here.\nJohnson relies primarily on section 15800, which postpones the rights of trust\nbeneficiaries \xe2\x80\x9cduring the time that a trust is revocable and the person holding the power to\nrevoke the trust is competent.\xe2\x80\x9d Contrary to Johnson\'s reading of it, this provision does not\nmean that a trust automatically becomes irrevocable when the trustor becomes a\nconservatee. The Law Revision Commission comment to section 15800 explains: \xe2\x80\x9cThis\nsection has the effect of postponing the enjoyment of rights of beneficiaries of revocable\ntrusts until the death or incompetence of the settlor or other person holding the power to revoke the\ntrust.\xe2\x80\x9d (Italics added.) It is clear from section 15800 that a conservator, working together with\nthe superior court as the conservatee\'s decisionmaking surrogate, is a \xe2\x80\x9cperson holding the\npower to revoke the trust.\xe2\x80\x9d\nThe reading of section 15800 proposed by Johnson would undermine the statutory\nscheme relating to revocable trusts. So long as a trust is revocable, a beneficiary\'s rights are\n84\n\n\x0cmerely potential, rather than vested. The beneficiary\'s interest could evaporate in a moment\nat the whim of the trustor or, in the case of a conservatorship, at the discretion of the court.\nGiving a beneficiary with a contingent, nonvested interest all the rights of a vested\nbeneficiary is untenable. We cannot confer on the contingent beneficiary rights that are\nillusory, which the beneficiary only hopes to have upon the death of the trustor, but only if\nthe trust has not been previously revoked and the beneficiary has outlived the trustor. For\nthis reason, we conclude that section 15800 does not give a beneficiary such as Johnson any\nright to a trust accounting so long as a conservator retains authority under section 2580 to\nhave the trust revoked and to abrogate Johnson\'s interest in the trust proceeds.\nJohnson\'s primary concern is that the court-appointed professional conservator may\nbe doing an inadequate job of supervising Frudenfeld\'s estate, including the Trust, thereby\nenabling Kotyck to engage in mismanagement or misappropriation of Trust assets.\nMistrustful of the conservator\'s abilities or diligence, Johnson wants to oversee Frudenfeld\'s\nestate herself to ensure proper Trust management.\nThere are two ways to address Johnson\'s concerns, both falling within the Probate\nCode\'s conservatorship provisions.\nFirst, the conservator is accountable to Johnson and is responsible for preventing the\nmisappropriation of the conservatee\'s assets. The conservatorship statutes and the\nsubstituted judgment statutes in the Probate Code are designed to protect the\nconservatorship estate for the benefit of the conservatee and for the benefit \xe2\x80\x9cof the persons\nwho will ultimately receive it from the conservatee.\xe2\x80\x9d Conservatorship of Hart, supra. 228 Cal.\nApp.3d at p. 1253, 279 Cal. Rptr. 249). In other words, the conservatorship is designed to\nprotect persons like Johnson as well as Frudenfeld. If the conservator is concerned that\nestate\'s assets are being wasted or misappropriated, the conservator is empowered to ask the\ncourt to compel \xe2\x80\x9ca person who has possession or control of property in the estate of the\nward or conservatee to appear before the court and make an account under oath of the\nproperty and the person\'s actions with respect to the property.\xe2\x80\x9d \xc2\xa7 2619, subd. (a).) Kotyck,\nas trustee of Frudenfeld\'s inter vivos trust, is a person in control of property in the\nconservatorship estate and must therefore account for her actions with respect to the Trust\nproperty.\nThe Probate Code requires that the conservator account for the property of the\nconservatee. The conservator must file an inventory and appraisal of the conservatee\'s estate\n85\n\n\x0cwithin 90 days after the initial appointment. (\xc2\xa72610.) The conservator must thereafter\naccount to the court, showing receipts, disbursements, transactions and the balance of\nproperty on hand. . (\xc2\xa72610.). Failure to account subjects the conservator to the risk of\npunishment for contempt. (\xc2\xa72629.) When an account is filed, \xe2\x80\x9cany relative\xe2\x80\x9d of the\nconservatee may file written objections to the account. (\xc2\xa7 2622.) Thus, there is already a\nmechanism in place through which Johnson, as the daughter of the conservatee, can monitor\nthe outflow from Frudenfeld\'s estate and ensure the diligent performance of the\nconservator\'s duties by simply scrutinizing the conservator\'s accountings and objecting when\nappropriate. Further, if the conservator breaches its fiduciary duty to Frudenfeld by allowing\nher estate to be frittered away, the conservator is chargeable for \xe2\x80\x9c[a]ny loss or depreciation in\nvalue of the estate,\xe2\x80\x9d with interest. (\xc2\xa7\xc2\xa7 2101, 2401.3.) In other words, the conservator ignores\nmisappropriations of the conservatee\'s property at its own peril.\nDuring oral argument, Johnson asserted that the provisions of section 2585\n\xe2\x80\x9cimmunize\xe2\x80\x9d the conservator from liability for wrongdoing. This is not correct. Section 2585\nonly states that the conservator is not required to propose any action under section 2585; i.e.,\nthe conservator is not required, for example, to propose the creation or revocation of a trust\nfor the conservatee, or to enter a contract on behalf of the conservatee, or to provide gifts to\ncharity, relatives, or friends on behalf of the conservatee. \xc2\xa72580, suds. (a)(3), (b)(4), (5), (11).)\nHowever, Johnson as an \xe2\x80\x9cinterested person\xe2\x80\x9d may file a petition of her own in the probate\ncourt under section 2580 to compel the conservator to take action. (See Cal. Law Revision\nCom. com., reprinted at 52 West\'s Ann. Probate Code, foll. \xc2\xa7 2585 (1991), p. 829[: \xe2\x80\x9cThe\nremedy for a person who believes that some action should be taken by the conservator\nunder this article is to petition under Section 2580 for an order requiring the conservator to\ntake such action with respect to estate planning or making gifts as is set out in the\npetition.\xe2\x80\x9d].) section 2585 does not immunize the conservator from wrongdoing or permit the\nconservator to look the other way if the conservatee\'s assets are being misappropriated by\nothers.\nSecond, the conservatorship statutes provide a direct means for a prospective\nbeneficiary like Johnson to investigate wrongdoing by a person holding the conservatee\'s\nproperty. Section 2616 authorizes the filing of a petition concerning a conservatee\'s assets by\nan \xe2\x80\x9cinterested person, including persons having only an expectancy or prospective interest in\nthe estate.\xe2\x80\x9d (\xc2\xa7 2616, subd. (a)(3).) Johnson is an interested person within this definition. If\n86\n\n\x0cshe chooses, Johnson may charge that Kotyck \xe2\x80\x9chas wrongfully taken, concealed, or disposed\nof property of the ward or conservatee.\xe2\x80\x9d (\xc2\xa7 2616, subd. (b)(1).) The court may then order\nthat Kotyck answer interrogatories or appear in court to be examined under oath, or both.\n(\xc2\xa7\xc2\xa7 2616, 2617.) In particular, a trustee who has wrongfully misappropriated the funds of a\nward is subject to citation and examination under section 2616. (In re Ochoa (1942) 50\nCal.App.2d 457, 458-459, 123 P.2d 106 [applying former \xc2\xa7 1552, the predecessor statute to \xc2\xa7\n2616].) Anyone who wrongfully takes the property belonging to a conservatee, including a\ntrustee, is personally liable for twice the value of the misappropriated property. (\xc2\xa7 2619.5.)\nIn short, there are satisfactory means by which Johnson can monitor the Trust and\nthe trustee\'s activities during the pendency of the conservatorship. Much as Johnson would\nlike to have a court declare the Trust to be irrevocable during Frudenfeld\'s lifetime, contrary\nto the terms of the Trust, it is unnecessary to do so to protect Johnson\'s interest. The\nLegislature has devised the methods we have described above to protect the rights of\npersons interested in the estate of a conservatee. The Legislature has also determined that\nthe conservator should retain the right to seek revocation of an inter vivos trust during the\nconservatee\'s lifetime. Johnson cannot be accorded all the rights of a vested beneficiary\nbefore the death of the trustor.\nDISPOSITION\nThe judgment is affirmed.\n\nLinthicum v. Rudi, 148 P.2d 746\nHARDESTY, J.\nIn this appeal, we consider whether revocable inter vivos trust beneficiaries have the\nright to challenge amendments to the trust, when made by the settlor during the settlor\'s\nlifetime. Because we conclude that a beneficiary\'s interest in a revocable inter vivos trust is\ncontingent at most, we hold that, generally, these beneficiaries lack standing to challenge the\nsettlor\'s lifetime amendments. Instead, to challenge the settlor\'s capacity to make\namendments, revocable inter vivos trust beneficiaries must follow the procedures set forth in\nNevada\'s guardianship statutes, NRS Chapter 159. Accordingly, we affirm the district court\'s\ndismissal of the underlying complaint challenging revocable inter vivos trust amendments.\nFACTS\nAppellants Ernette and Myrna Linthicum are the brother and sister-in-law,\nrespectively, of Claire Linthicum\xe2\x80\x93Cobb. In 2002, Cobb executed a will and a revocable inter\n87\n\n\x0cvivos trust. As settlor, Cobb named herself trustee and reserved the power to revoke or\namend the trust throughout her lifetime without having to notify any beneficiary. Cobb\nnamed Ernette and Myrna the primary beneficiaries of the trust upon Cobb\'s death.\nAdditionally, Cobb named Ernette and Myrna successor trustees upon Cobb\'s death or\nincapacity. Finally, the trust stated that the trust would become irrevocable upon Cobb\'s\ndeath.\nIn 2004, Cobb executed a new will and a restatement/amendment to the trust. The\namended trust replaced Ernette and Myrna as successor trustees with respondent Arnold\nRudi, the nephew of Cobb\'s deceased husband. Also, the amended trust allegedly named\nRudi as the sole beneficiary. Under the amended trust, Cobb remained the current trustee\nand retained the power to revoke the trust. Thus, the amended trust was still a revocable\ninter vivos trust.\nAfter Cobb named Rudi the sole successor trustee, Rudi and Guardianship Services\nof Nevada petitioned for co-guardianship of Cobb\'s person and estate because Cobb was\npossibly delusional and paranoid. Ernette and Myrna objected to Rudi\'s appointment as a coguardian; Rudi\'s petition for guardianship was later withdrawn. The district court granted\nGuardianship Services\' petition for guardianship because it found that some of Cobb\'s\nactions had resulted in self-neglect and potential self-harm.\nSubsequently, Ernette and Myrna filed a complaint alleging that the amended trust\nwas a product of incapacity and/or undue influence, and they sought a constructive trust\nand/or cancellation of the amended trust. As to undue influence, Ernette and Myrna alleged\nthat Rudi had a confidential relationship with Cobb and participated in executing the\namended trust.\nRudi filed a motion to dismiss the complaint\xe2\x80\xa6asserting that Ernette and Myrna had\nfailed to state a claim upon which relief could be granted because they lacked standing to\nchallenge the amended trust. Specifically, Rudi argued that a will contest cannot be\nmaintained until the testator dies, and since Cobb was still alive at the time, Ernette and\nMyrna lacked a present legal interest in the will and the trust. Rudi also argued that Ernette\nand Myrna could not assert any damages resulting from the amended trust.\nErnette and Myrna simultaneously filed an opposition to Rudi\'s motion to dismiss\nand a motion for the appointment of themselves as guardians ad litem. Ernette and Myrna\nargued that they had standing because the amended trust was presently operative and\n88\n\n\x0ceffectual. Moreover, they argued that even if they could not challenge Cobb\'s will until after\nher death, it was necessary to challenge the amended trust during Cobb\'s lifetime to ensure\nthat her wishes for the administration of her estate were observed while she was\nincapacitated. Finally, if the court concluded that they did not have standing, they asked that\nthey be appointed as guardians ad litem.\nThe district court granted Rudi\'s motion to dismiss, without prejudice, finding that\nErnette and Myrna lacked standing to challenge the amended living trust because Cobb was\nstill alive; the court also denied Ernette and Myrna\'s motion to be appointed guardians ad\nlitem. In denying a subsequent rehearing motion, the district court explained that Ernette\'s\nand Myrna\'s interest was at best contingent and would only vest if they survived Cobb. The\ndistrict court also granted Rudi\'s motion for attorney fees and costs. Ernette and Myrna\nappealed.\nDISCUSSION\nErnette and Myrna argue that Nevada statutory law allows them to challenge Cobb\'s\nrevocable inter vivos trust during Cobb\'s lifetime*1455 and that the district court erred by\ngranting Rudi\'s motion to dismiss. Specifically, Ernette and Myrna argue that NRS 164.015,\nNRS 153.031 (1)(a) and NRS 153.031(1)(d) allow interested persons to challenge the validity\nof a revocable trust while the settlor is still alive. We disagree.\nIf a motion to dismiss is made under NRCP 12(b)(5) and \xe2\x80\x9cmatters outside the\npleading are presented to and not excluded by the court, the motion shall be treated as one\nfor summary judgment.\xe2\x80\x9d The district court did consider matters outside the parties\'\npleadings, such as the guardianship order. Thus, we review Rudi\'s motion to dismiss as a\nmotion for summary judgment. This court reviews an order granting summary judgment de\nnovo.\nNRS 164.015(1) permits \xe2\x80\x9can interested person\xe2\x80\x9d to petition the court for proceedings\n\xe2\x80\x9cconcerning the internal affairs of a nontestamentary trust\xe2\x80\x9d and to obtain \xe2\x80\x9cany appropriate\nrelief provided with respect to a testamentary trust in NRS 153.031.\xe2\x80\x9d NRS 153.031 (1)(a) and\nNRS 153.031 (1)(d) allow a trustee or beneficiary of a trust to petition the court to determine\nthe existence of the trust and the validity of a trust provision, respectively. However, neither\nof these statutes directly addresses revocable inter vivos trusts, such as the trust in this case.\nMoreover, these statutes specifically refer to petitions by interested persons. Because the\ntrust at issue is a revocable inter vivos trust and Cobb retained the ability to revoke the trust\n89\n\n\x0cduring her lifetime, Ernette and Myrna have at most a contingent interest that has not yet\nvested. Consequently, Ernette and Myrna are not interested persons within the meaning of\nNRS 164.015 and NRS 153.031.\nIn so concluding, we embrace the holdings of other jurisdictions that have\nconsidered the matter. In a case from Ohio, Lewis v. Star Bank, N.A., Butler County, the\nbeneficiaries of a revocable inter vivos trust sued the trustee for an alleged breach of\nfiduciary duty for failing to give pre-death tax and estate-planning advice to the settlor. The\nOhio Court of Appeals determined that while the settlor was alive, pursuant to the terms of\nthe trust itself, she had reserved the right to modify or revoke the trust. The court further\nconcluded that as long as the settlor had that right and other \xe2\x80\x9cindicia of retained ownership\xe2\x80\x9d\nduring her lifetime, the beneficiaries did not have an absolute entitlement to any portion of\nthe trust while the settlor was alive. Since the beneficiaries\' interests were subject to complete\ndivestment while the settlor was alive, the court held that the beneficiaries were not in privity\nwith the settlor or the trustee and could not maintain their lawsuit.\nSimilarly, in Ullman v. Garcia, a Florida appellate court cited a Florida statute that\nprevented revocable trusts from being contested before the settlor\'s death. Although the\ncourt relied in part on a statute, it also elaborated upon the reasoning behind this rule, much\nof which underlies our holding today. The Florida court noted that the devisee of a\nrevocable trust does not enjoy any control over ownership of the trust until the settlor\'s\ndeath. Because the settlor has an absolute right to terminate the trust at any time and\ndistribute the trust property as he or she sees fit, named beneficiaries to a revocable trust are\nonly \xe2\x80\x9cpotential devisees.\xe2\x80\x9d The court also observed that a revocable trust is \xe2\x80\x9ca unique\ninstrument\xe2\x80\x9d that has \xe2\x80\x9cno legal significance until the [settlor]\'s death.\xe2\x80\x9d\nErnette and Myrna cite a California case, Conservatorship of Estate of Irvine, to support\ntheir argument that they have standing to challenge Cobb\'s revocable inter vivos trust. In\nIrvine, a California appellate court upheld a lower court\'s order invalidating an amendment to\na revocable living trust. However, Irvine is distinguishable from the present case. In Irvine, the\ntrust allowed the settlor to amend the trust only upon written notice personally served upon\nand accepted by the trustee. The court noted that under a California statute, a settlor could\nbind himself to a specific method of amendment by providing for that method in the trust\nitself. Since the settlor in the case had not served the trustee with notice of the amendment,\nthe court held that the requirements of the trust had not been satisfied and that the\n90\n\n\x0camendment never became effective.\nUnlike the situation in Irvine, in the present case, Cobb\'s trust does not contain a\nnotice requirement or similar provision that would grant standing to Ernette and Myrna to\nchallenge the trust *1457 amendment, nor does Nevada have a statute similar to the\nCalifornia statute. Consequently, Irvine does not lend support for Ernette and Myrna\'s\nposition.\nNevada statutes do not contemplate beneficiaries to a revocable inter vivos trust\nchallenging the trust until the settlor\'s death. Furthermore, such beneficiaries have only a\ncontingent interest, at most, while the settlor is still alive. That interest does not vest until the\nsettlor\'s death. Other jurisdictions addressing the issue have held similarly. For these reasons,\nwe conclude that Ernette and Myrna lack standing to challenge Cobb\'s revocable inter vivos\ntrust while Cobb is still alive.\nAfter filing their complaint, Ernette and Myrna requested that the district court\nappoint them as Cobb\'s guardians ad litem, under NRS Chapter 159, so that they could\nprosecute an action against Rudi and the trust on Cobb\'s behalf. For Ernette and Myrna to\nserve as Cobb\'s guardians ad litem under these circumstances\xe2\x80\x94namely, in a matter in which\nthey challenge Cobb\'s actions in amending her trust to exclude themselves as beneficiaries\xe2\x80\x94\nwould create a conflict of interest. Accordingly, the district court properly denied their\nrequest. To the extent that Ernette and Myrna\'s concerns center on Cobb\'s capacity, those\nconcerns are more appropriately addressed under Nevada\'s guardianship statutes, NRS\nChapter 159, in the separate action brought under those statutes, rather than through their\nappointment as guardians ad litem in the litigation against Cobb\'s trust.\nFinally, Ernette and Myrna also argue that the district court erred in awarding costs\nand attorney fees to Rudi as the prevailing party. We have considered the argument, and\nbased on our holding today, we conclude that it is without merit.\nCONCLUSION\nBecause we conclude that a beneficiary\'s interest in a revocable inter vivos trust is\ncontingent at most, we conclude that Ernette and Myrna lack standing to challenge Cobb\'s\nrevocable inter vivos trust during Cobb\'s lifetime. Additionally, we conclude that Ernette\n*1458 and Myrna must follow the procedures created by the Legislature when it modified\nNevada\'s guardianship statutes in 2003, if they wish to pursue a remedy in this matter.\nAccordingly, we affirm the district court orders.\n91\n\n\x0cNotes, Questions and Problems\n1. In order for there to be a valid inter vivos trust created by a deed of trust, the trust\nproperty must be delivered to the trustee. The settlor usually retains the power to revoke the\ntrust. Thus, the trustee cannot do any thing with the property until the settlor dies. Unlike an\ninter vivos trust that is created by a declaration of trust, the courts require the settlor to\ndeliver the trust property to the trustee. There are three types of delivery: actual, constructive\nand symbolic. Courts require the trust property to be actually delivered unless that is\nimpossible or impracticable. Actual delivery may not be feasible based upon the nature\nand/or location of the property and/or the condition of the settlor. Constructive delivery\nexists when the settlor gives the trustee something that permits him to obtain possession of\nthe property. For example, the settlor can satisfy constructive delivery by giving the trustee\nthe keys to the safe deposit box where the trust property is located. In order to satisfy the\nsymbolic delivery requirement, the settlor could give the trustee something that symbolizes\nthe trust property. For instance, the settlor could send the trustee a list of expensive\npaintings that she wants to be the property of the trust if it is not convenient for her to\ndeliver the paintings in a timely manner.\n2. A revocable declaration of trust is created when the settlor states, \xe2\x80\x9cI declare myself trustee\nof my family\xe2\x80\x99s farm for the benefit of myself during my lifetime. Upon my death, the farm\nwill pass to my sister to be held in trust for my grandchildren.\xe2\x80\x9d How does this differ from a\ntestamentary trust? Since this trust does not comply with the Wills Act, should it be\nenforceable?\n3. Problems\nAssuming that actual delivery is not possible, in which of the following cases has the\nproperty been effectively delivered?\na). Elizabeth wants to place her collection of twelve antique cars in trust for the benefit of\nher children. Elizabeth delivers the automobile insurance policies to the trustee.\nb). Egypt wants to place her collection of two hundred rare books in trust for the benefit of\nher children. Egypt gives the trustee a memorandum listing the titles of the books.\nc). Daniel wants to place his stocks in trust for the benefit of his children. The stock\ncertificates are in his safe deposit box. Daniel gives the trustee the keys to the desk where the\nkeys to the safe deposit box are located.\nd). Kevin wants to place his bed and breakfast in trust for the benefit of his children. Kevin\n92\n\n\x0cgives the trustee the deed to the property.\n\n3.1.2. Totten/Tentative Trust\nAnother type of trust that the law recognizes is the Totten trust. The Totten trust is\nreferred to as the poor man\xe2\x80\x99s trust because it can be created without expense or formalities.\nThis type of savings account trust was recognized in the landmark case of In re Totten, 71\nN.E. 748 (N.Y. 1904). In order to transfer property after death, a person has to execute a\nwill. If A places her daughter\xe2\x80\x99s name on her bank account with the intention that the\ndaughter is only to remove money from the bank account after A dies, it is clear that A has\ntestamentary intent with regards to the money. A is attempting to make a testamentary\ndisposition of the money without executing a will. This transaction like most payable on\ndeath transactions is invalid. Nevertheless, the Totten trust is an exception to this rule. The\nTotten case involved the following transaction. A deposited money into a savings account in\nthe name of \xe2\x80\x9cA, as trustee for B.\xe2\x80\x9d While she was alive, A maintained the right to revoke the\ntrust by taking all of the money out of the account at any time. B was only entitled to the\nmoney that remained in the savings account after A died. The Totten court concluded that\nthe transaction was not testamentary in nature. The court reasoned that, at the time A made\nthe deposit, a \xe2\x80\x9ctentative \xe2\x80\x9c revocable trust was established. Hence, as beneficiary of that trust,\nB was legally entitled to any money left in the account when A died.\n\n3.2.\n\nTrusts Created By Operation of Law\n3.2.1\n\nResulting Trust\n\nIn some contexts, courts will imply a trust. A resulting trust is an implied trust that\nequity requires the law to establish when it can be inferred from the character of the\ntransaction that the person who holds the legal title to the property was not intended to have\nthe beneficial interest. Thus, a resulting trust is really an equitable reversionary interest in\nproperty. The trust is created by operation of law in the following contexts: (1) a private\nexpressed trust fails or makes an incomplete disposition; (2) the property of the trust proves\nto exceeds what is required to satisfy the trust purpose; (3) one person pays the\nconsideration for a transfer of real property, but the title has been taken in the name of\nanother person. Consider the following examples:\nExample 1-Betty Jo devises property to Billy Bob in trust to pay the income\nto Denver for life, and on Denver\xe2\x80\x99s death to distribute the remaining\n93\n\n\x0cproperty to Betty Jo\xe2\x80\x99s friends. After Denver dies the trust would be dissolved\nfor lack of ascertainable beneficiaries. In order to avoid letting Billy Bob\nretain the trust property, the court would place a resulting trust on the\nproperty for the benefit of Betty Jo\xe2\x80\x99s heirs or devisees.\nExample 2-Beyonce purchases Blueacre with money supplied by Kelly.\nUnless Beyonce can show that Kelly intended to make a gift of Blueacre to\nBeyonce, Beyonce holds title to Blueacre on resulting trust for Kelly.\n\nSahagun v. Ibarra, 90 S.W.3d 860\nKAREN ANGELINI, Justice.\nThis appeal arises from a dispute over a house in which Maria M. Guadalupe\nSahagun possesses legal title. The trial court determined that a resulting trust was created at\nthe inception of title in Enrique Ibarra, Sr.\'s favor and that this equitable title was superior to\nSahagun\'s legal title. Sahagun brings four issues on appeal. We overrule all issues and affirm\nthe judgment of the trial court.\nBACKGROUND\nIn 1991, Ibarra and Sahagun were romantically involved despite the fact that Ibarra was\nmarried to another woman. Ibarra moved into Sahagun\'s home. Sahagun then sold her\nhome, and she and Ibarra moved into a rental property. In 1996, Sahagun bought a house in\nher name for $89,000.00. That house is the subject of this appeal. Ibarra contributed $10,000\nin earnest money. Sahagun paid an additional $15,000.00 as a down payment. Ibarra\ncontends that he and Sahagun intended to buy the house together. According to Ibarra, the\nreason that the title was in Sahagun\'s name was because he and Sahagun did not want his\nwife to know about the purchase. Sahagun disputed Ibarra\'s version of events and testified\nthat Ibarra gave her the money, because he had \xe2\x80\x9clived with me for so long off [sic] of me.\xe2\x80\x9d\nSahagun claims that Ibarra knew that the house was hers and that it would eventually belong\nto her daughter. Ibarra and Sahagun lived in the house together as a couple. Ibarra and\nSahagun later separated, and Ibarra moved out of the home. When Sahagun put the house\nup for sale, Ibarra filed a lis pendens. He then filed suit against Sahagun. Later, Ibarra filed a\nmotion to dismiss without prejudice, claiming that the parties had settled their dispute.\nAccording to Sahagun, she and Ibarra agreed that she would repay him $10,000.00. This\nagreement, however, was not reduced to writing. The trial court granted the motion to\ndismiss and entered an order of dismissal without prejudice. In March of 1998, Ibarra and\n94\n\n\x0cSahagun went to the law office of Ibarra\'s divorce attorney. Sahagun gave Ibarra a check for\n$2,000.00 with a notation \xe2\x80\x9cpartial pymt. on loan\xe2\x80\x9d in the memo section. Sahagun claims that\nshe made this payment in accordance with their settlement agreement. Ibarra disputes\nSahagun\'s assertion and contends that Sahagun paid him the money so that he could get a\ndivorce and that he never saw the notation on the check. Ibarra refiled his lawsuit against\nSahagun, requesting that the trial court impose a constructive trust in his favor. The case was\ntried to the bench. At trial, Ibarra sought an amendment to add a claim for a resulting trust.\nThe trial court found in Ibarra\'s favor and imposed a resulting trust, awarding Ibarra an\nundivided interest of 43/100 in the house.\nJURISDICTION AND RES JUDICATA/COLLATERAL ESTOPPEL\nIn her first and second issues, Sahagun argues that the trial court had no jurisdiction\nto enter its judgment. Sahagun contends that the prior order of dismissal without prejudice is\nsubstantively an order dismissing the cause with prejudice and thus, bars Ibarra\'s refiling his\nsuit against her pursuant to the doctrines of res judicata and collateral estoppel. Indeed, a\ndismissal with prejudice functions as a final determination on the merits, Mossler v. Shields,\n818 S.W.2d 752, 754 (Tex. 1991), and orders dismissing cases with prejudice have full res\njudicata and collateral estoppel effect, barring any subsequent suit arising out of the same\nfacts brought by the same party against the same respondent. Lentworth v. Traham, 981\nS.W.2d 720, 722 (Tex. App-Houston [1st Dist.] 1998, no pet).\nSahagun urges that we should look to the substance of the motion and not to its title.\nBecause the motion to dismiss without prejudice states that \xe2\x80\x9cthe parties have settled their\ndispute,\xe2\x80\x9d Sahagun argues that we should interpret the substance of the motion as requesting\ndismissal with prejudice. Similarly, Sahagun contends that because the order of dismissal\nwithout prejudice states that the trial court determined the motion to be \xe2\x80\x9cmeritorious,\xe2\x80\x9d we\nshould interpret the order as dismissing the case with prejudice. For support, Sahagun cites\nDe La Rosa v. Vasquez, 748 S.W.2d 23 (Tex. App.-Amarillo 1988, no writ), which arose out of\na suit to establish paternity. In that case, although the parties entitled their joint motion a\n\xe2\x80\x9cmotion for nonsuit,\xe2\x80\x9d they requested that the court dismiss their suit with prejudice as they\nhad fully settled their dispute. Id. at 26. On appeal, Vasquez argued that the trial court should\nnot have entered judgment with prejudice, because their joint motion was entitled a motion\nfor nonsuit. Id. The appellate court disagreed and after reviewing the substance of the\nmotion, determined that the motion, despite its title, was a motion seeking dismissal with\n95\n\n\x0cprejudice based upon the compromise and settlement of the parties. Id. Sahagun asks that we\ninterpret this holding to extend to any motion seeking dismissal because the parties have\nsettled their dispute. We decline to do so.\nHere, Ibarra moved for dismissal without prejudice on the grounds that the parties had\nsettled their dispute. The trial court then ordered that the cause be dismissed without prejudice.\nThe clear intent of the motion and the order was that the cause be dismissed without\nprejudice. As the cause was dismissed without prejudice, res judicata and collateral estoppel\ndid not bar Ibarra\'s suit. We overrule Sahagun\'s first and second issues.\nRESULTING TRUST\nIn her third issue, Sahagun argues that there was no evidence to impose a resulting\ntrust against her. A resulting trust arises by operation of law when title is conveyed to one\nperson but the purchase price or a portion of it is paid by another. Tricentol Oil Trading, Inc. v.\nAnnesely, 809 S.W.2d 218, 220 (Tex. 1991). To create a resulting trust, the payment must be\nmade at the time of purchase and the person seeking to impose a resulting trust must have\npaid the money in the character of a purchaser. Lifemark Corp. v. Merritt, 655 S.W.2d 310, 317\n(Tex. App.-Houston [14th Dist.] 1983, writ. ref\xe2\x80\x99d n.r.e. No resulting trust exists in favor of\none who pays the purchase price by way of mere loan to another and the conveyance is\ntaken in the name of the borrower. Id.; Jordan v. Jordan, 154 S.W. 359, 361 (Tex. Civ. App.Texarkana 1913, writ. ref\xe2\x80\x99d) (citing Boehl v. Wadgymar, 54 Tex. 598 (1881). Thus, if A loans\nmoney to B, B purchases property with that money, and the conveyance is taken in B\'s\nname, no resulting trust arises in favor of A. However, if A pays the purchase price and\ncauses the deed to the property to be placed in B\'s name, a resulting trust does arise in favor\nof A. See Atkins v. Carson, 467 S.W.2d 495, 500 (Tex. Civ. App.-San Antonio 1971, writ ref\xe2\x80\x99d\nn.r.e.).\nIn reviewing a legal sufficiency challenge on appeal, all the record evidence and\nreasonable inferences from that evidence are reviewed in a light most favorable to the\nfindings, and the finding is upheld if it is supported by anything more than a scintilla of\nevidence. Formosa Plastics Corp. USA v. Presidio Engineers & Contractors, Inc., 960 S.W.2d 41, 48\n(Tex. 1998). Anything more than a scintilla of evidence is legally sufficient to support the\nfinding. Id.\nSahagun argues that Ibarra was required to prove a fiduciary relationship citing\nlanguage in Tricentrol Oil Trading, Inc. v. Annesley, 809 S.W.2d 218, 220 (Tex. 1991), for\n96\n\n\x0csupport. In Tricentrol , the supreme court explained that \xe2\x80\x9c[w]hen title to property is taken in\nthe name of someone other than the person who advances the purchase price, a resulting trust\nis created in favor of the payor.\xe2\x80\x9d Id. (emphasis added). Once this resulting trust is created, the\n\xe2\x80\x9ctrustee of a resulting trust stands in a fiduciary relationship with the beneficiary insofar as\nthe trust property is concerned.\xe2\x80\x9d Id. Tricentrol stands for the proposition that once a resulting\ntrust is created, the trustee (in this case, Sahagun) stands in a fiduciary relationship with the\nbeneficiary (in this case, Ibarra). For the evidence to be legally sufficient, there must be some\nevidence that a resulting trust was created. There need not, however, be evidence of a\nfiduciary relationship between Ibarra and Sahagun prior to the creation of the resulting trust.\nThe creation of the resulting trust, itself, establishes the fiduciary relationship.\nAt trial, Ibarra testified that he and Sahagun decided to buy a house because \xe2\x80\x9cthey\nwere just throwing money away\xe2\x80\x9d by renting a house. A real estate agent had told him about\nthe house that is the subject of this suit. According to Ibarra, he and Sahagun liked the house\nand Ibarra put $1,500.00 of his separate money down as earnest money. Ibarra testified that\nhe and Sahagun decided to purchase the house in her name because Ibarra was not divorced\nand they wanted to protect Sahagun from his wife and children. Because he and Sahagun\nwanted to \xe2\x80\x9cexpedite things,\xe2\x80\x9d Ibarra put $8,500.00 more down as earnest money. Thus,\naccording to Ibarra\'s testimony, he and Sahagun agreed to purchase the house together.\nAlthough Sahagun\'s testimony contradicts Ibarra\'s, his testimony is more than a scintilla of\nevidence that a resulting trust was created at the time of inception of title. We overrule\nSahagun\'s third issue.\nCONCLUSION\nHaving overruled all issues, we affirm the judgment of the trial court.\n\n3.2.2. Constructive Trust\nA constructive trust is an equitable remedy designed to prevent unjust enrichment or\nto punish fraud. The court places a trust over the property to prevent the wrongdoer from\nbenefitting from its use. The moment the constructive trust is created the wrongdoer loses\nall interest in the trust property. Constructive trusts are different from resulting trusts\nbecause courts impose constructive trusts in situations where no trust was ever anticipated.\nFor instance, if a person named in the testator\xe2\x80\x99s will causes the testator\xe2\x80\x99s death, the slayer\nstatute will usually prevent the person from inheriting. Since the probate court is a limited\n97\n\n\x0cjurisdiction court, it has to honor the terms of the testator\xe2\x80\x99s will and give the slayer the\nbequest. In order to prevent the slayer from benefitting from his crime, the court can\nimposed a constructive trust on the property he receives under the will. Thus, the slayer\nnever takes an interest in the property. He holds the property in trust for the testator\xe2\x80\x99s next\nof kin. Once the property is converted into a constructive trust, the holder of the property\nmust transfer it to the constructive beneficiary.\n\nRawlings v. Rawlings, 240 P.2d 754\nAMENDED OPINION\nOn Certiorari to the Utah Court of Appeals\nDURRANT, Associate Chief Justice:\nINTRODUCTION\n\xc2\xb61 We granted certiorari in this case to determine whether the court of appeals erred\nin reversing the district court\'s imposition of a constructive trust. The parties in this case are\nsiblings who dispute the ownership of farm land transferred by their father. The oldest\nsibling, Donald, received the land as the grantee under a warranty deed. He contends that his\nfather transferred the land to him in exchange for payments he made on some of his father\'s\ndebts. The family\'s four other siblings and their spouses (collectively, the \xe2\x80\x9csiblings\xe2\x80\x9d) contend\nthat their father deeded the land to Donald in an attempt to create a family trust. During the\ntime period surrounding this transfer, their father had been diagnosed with cancer and\nowning the land made him ineligible for welfare assistance. The siblings contend that their\nfather placed the property in their older brother\'s name so that he could act as trustee over\nthe land and hold it for the benefit of the family. The siblings also contend that, in the\ndecades since the transfer, the land was treated as a family farm and that they have\ncontributed to its care, maintenance, and profitability.\n\xc2\xb62 The district court credited the testimony of the siblings and found that the oldest\nbrother had been unjustly enriched by accepting the siblings\' years of contributions to the\nsuccess of the farm. Accordingly, the court exercised its equitable power to award a\nconstructive trust in favor of the siblings. The court of appeals reversed. Concluding that\ncertain of the district court\'s findings of fact were inconsistent with its award of a\nconstructive trust, the court of appeals held as a matter of law that the siblings could not\nprevail on any theory of constructive trust. We exercised our jurisdiction pursuant to Utah\nCode section 78A-3-102(3)(a) (2008) and granted the siblings\' petition for certiorari. We\n98\n\n\x0creverse the judgment of the court of appeals.\nBACKGROUND\n\xc2\xb63 Because the parties do not dispute any of the trial court\'s findings of fact, we\nrecite the facts in accordance with those findings.\n\xc2\xb64 The parties in this case are siblings whose father, Arnold Rawlings, owned twentytwo acres of land near Orem, Utah. In 1957, a few years before the events giving rise to this\ncase occurred, Arnold transferred approximately twelve acres to a third party while retaining\napproximately ten acres that he operated as a family farm. Between 1960 and 1967, Arnold\ntransferred portions of this farm land to his two oldest sons, Donald and Dwayne Rawlings.\nThe end result of these transfers was that both Donald and Dwayne received parcels\napproximately one acre in size on which to build their homes. Arnold retained half an acre in\nthe northeast corner of the property where his house was located. Except for these assorted\nparcels of land, the remainder of Arnold\'s property remained undivided until March 24,\n1967. On that day, he transferred to Dwayne a small parcel approximately half an acre\nimmediately south of Donald\'s land-which Dwayne has held in trust for the other members\nof the family. On the same day, Arnold transferred the remaining farm property to Donald,\nin one undivided parcel, via a general warranty deed. In contrast to the siblings\' claims that\nDonald took the land as a trustee, Donald contends that this transfer was compensation for\nhis having paid certain debts on his father\'s behalf.\n\xc2\xb65 The March 24 land transfers happened at a time when Arnold\'s health had\nsubstantially deteriorated. In October of the year before, he was diagnosed with cancer.\nLater that year he underwent surgery to remove a large tumor. Although he labored to\nrecover from this surgery, Arnold began radiation treatments in January of 1967. He was\nhospitalized twice in the coming months, and by March 24, his health was very poor.\n\xc2\xb66 The siblings contend that the purpose of transferring the farm property to\nDonald was to facilitate his eligibility for welfare assistance. Sometime prior to December 16,\n1966, Donald had contacted the State Welfare Department to discuss Arnold\'s eligibility, and\nit became apparent that Arnold would receive assistance only if the farm property was not\nheld in his name. Thus, shortly before the March 24 transfers, Arnold discussed with LaRell,\nhis third oldest son, the need to take the property out of Arnold\'s name. They discussed the\nbest means to effect this, and LaRell suggested that the property be transferred to Dwayne\nbecause LaRell believed Dwayne would be fair in his dealings with the family. Ultimately,\n99\n\n\x0cArnold decided to transfer the land to Donald instead. Arnold met once with LaRell and\nDonald, and later with Dwayne and Donald, to discuss these plans. The trial court credited\nthis testimony and found that Donald offered no evidence to rebut it.\n\xc2\xb67 Around the time of the transfer, Donald and the siblings also conducted other\nbusiness relevant to the farm property. First, in January of that year, Donald began telling\nDwayne that Arnold needed approximately $1,000 to pay off the taxes on the farm. Dwayne\nborrowed the funds to pay these taxes on his father\'s behalf and gave the money to Donald.\nBut it was not until the March 24 transfer was complete that Donald used this money to pay\noff the back taxes. Second, on the same day that Arnold transferred the farm property to\nDonald, the siblings and their spouses relinquished their interests in the farm property to\nDonald via a quitclaim deed. Over time, the siblings also transferred neighboring parcels of\nland to Donald to add to the trust property.\n\xc2\xb68 In the years after the transfer, Arnold continued to struggle with his health, but\nalso continued to manage and collect the profits from the farm property until his death in\n1971. Indeed, in the fall of 1969, Arnold struggled to complete the harvest on his own. So,\nthe next spring, Arnold began corresponding with LaRell\'s commanding officers in the\nmilitary in the hopes of having LaRell temporarily released from his duties so he could return\nand help with the maintenance of the farm. Arnold submitted notarized affidavits to this\neffect, and had a number of people write letters in support of this effort. These documents\nuniformly refer to the property as Arnold\'s Farm and refer to Arnold\'s efforts to harvest\ncrops and maintain the farm, and given his health, the difficulty he faced doing it alone.\n\xc2\xb69 In addition to managing the property as a farm, Arnold also managed family\naffairs on the farm: when Arnold\'s youngest son, Bryce, sought to locate a mobile home on\nfarm property, it was Arnold\'s permission he sought, and it was Arnold who decided the best\nlocation for the trailer. And less than a month after Arnold\'s death in 1971, Arnold\'s widow,\nCleo-not Donald-paid the property taxes on all of the farm property.\n\xc2\xb610 For years after Arnold\'s death, the farm property was managed in a manner\nconsistent with it being held in trust for the family. Bryce continued to live on the land for\nfour or five years after Arnold\'s death. Donald consistently represented to his siblings that\nincome from the farm property was being used to support their mother. Because of these\nrepresentations, all of the siblings, except Donald, worked in the orchard and helped to\nmaintain the farm property. When Donald was asked during his deposition which of the\n100\n\n\x0csiblings contributed to the operation of the farm property, Donald answered, \xe2\x80\x9cAll I know is\nthat I didn\'t.\xe2\x80\x9d\n\xc2\xb611 Arnold\'s 1957 transfer of twelve acres south of the farm property led to a\nboundary dispute regarding the southern border of the farm property. During this dispute,\nDonald\'s representations to the family reinforced the idea that this land was being managed\nfor the benefit of the family. Specifically, by 1974 a dispute had arisen over the location of\nthe border between the farm property and the land that Arnold had transferred in 1957.\nDonald enlisted Dwayne to help erect a fence at the boundary line in the hopes of settling\nthis dispute and protecting what Donald referred to as \xe2\x80\x9cMother\'s farm.\xe2\x80\x9d Donald also\ninduced his siblings to sign a quitclaim deed for the farm property. He told them that the\nquitclaim deed encompassed only the land being disputed, but it actually described the entire\nfarm property. The trial court found that this quitclaim deed would have been unnecessary if\nDonald had owned the property by virtue of the 1967 conveyance. Thus, it rejected Donald\'s\ncontention that the purpose of the quitclaim deed was to clear up the title problems on the\nsouthern boundary. When Donald settled the boundary dispute for $52,000, he paid $500\neach to Bryce and Carol Lynn (Arnold\'s only daughter), and $600 to Dwayne. He offered\n$500 to LaRell, but LaRell refused to accept the money. Donald also spent $5,000 to prepay\nburial funds for Cleo and to buy her a car.\n\xc2\xb612 Not until after 1993 were the siblings made aware that Donald considered the\nland to be his own property. A dispute arose regarding a piece of the farm property that\nformed part of the basis for a land exchange that Donald and Dwayne had undertaken in\n1978. In exchange for a piece of industrial property valued at approximately $45,000, the two\nbrothers each contributed $15,000. A small piece of the farm property, valued at\napproximately $15,000, constituted the remainder of their contribution. The industrial\nproperty they received was eventually divided into northern and southern halves, with each\nbrother responsible for one of the halves. In 1993, Donald brought suit to establish himself\nas the owner of two-thirds of this property. He alleged that he alone held title to the farm\nproperty that formed part of the basis of the exchange. Alleging that Dwayne had no interest\nin the farm property, Donald contended that his share of the industrial property should\nreflect the fact that he contributed $15,000 worth of land and $15,000 in cash, whereas\nDwayne only contributed $15,000 in cash. The district court found that this suit, filed in\n1997, was the first repudiation by Donald of his trust responsibilities. In response to\n101\n\n\x0cDonald\'s suit to quiet title, Dwayne and the siblings filed counterclaims seeking imposition\nof a constructive trust.\n\xc2\xb613 Donald\'s version of events surrounding the 1967 transfer of farm property\ndiffers from that of the siblings. He contends that Arnold had mortgaged the farm property\nprior to being diagnosed with cancer and that Donald rescued the land from foreclosure by\npaying off his father\'s indebtedness. Thus, he contends that the deed transferring the land is\nexactly what it purports to be on its face: a general warranty deed transferring fee simple\nownership. He contends that Arnold, prompted by Donald\'s payments of this indebtedness,\nintended to give him the farm property free of any implicit trust obligation.\n\xc2\xb614 The trial court explicitly discredited this testimony for a number of reasons.\nFirst, Donald had his own indebtedness with the same bank, and during the time when he\nwould have been paying off his father\'s debts, his payments to the bank did not increase in a\nmanner consistent with making additional payments. Second, after this litigation began,\nDonald\'s wife, Jeanette, altered the cancelled checks to the bank by inserting notes on the\nmemo line to make it appear as though the checks were written to pay Arnold\'s mortgage.\nThird, the evidence was not consistent with the possibility of imminent foreclosure, because\nthe bank had neither sent any notices of default (as it would have been required to do) nor\nattempted to foreclose on two vehicles that were also part of the security for the loan.\n\xc2\xb615 Ultimately, the district court found the testimony of the siblings persuasive and\nrejected Donald\'s version of events. It concluded that the purpose of the transfer was to\naccommodate Arnold\'s attempts at becoming eligible for welfare, not in exchange for\npayment of Arnold\'s debt and not to transfer ownership. It concluded the siblings had\npresented clear and convincing evidence to support an \xe2\x80\x9cequitable need to impose a\nconstructive trust on the property.\xe2\x80\x9d It also concluded that Donald and Jeanette had been\nunjustly enriched by keeping the $1,000 that Dwayne paid toward the property taxes, by\nkeeping the bulk of the $52,000 received from the settlement of the boundary dispute, and\nby keeping \xe2\x80\x9cother benefits from the use and negotiations relative to the trust property.\xe2\x80\x9d\nThus, the trial court entered judgment in favor of the siblings, concluding that the March 24\nconveyance to Donald, along with the relevant quitclaim deeds, created a constructive trust\non the property described therein.\n\xc2\xb616 The court of appeals reversed this judgment. It began by comparing the two\ndifferent theories under which a constructive trust may be imposed. One theory, which it\n102\n\n\x0ccalled a \xe2\x80\x9clegal constructive trust,\xe2\x80\x9d requires no showing of unjust enrichment. Instead, it\nconcluded that in some cases a constructive trust is imposed to give effect to a grantor\'s\nattempt to create an oral express trust. The court of appeals contrasted this sort of\nconstructive trust with \xe2\x80\x9cequitable constructive trusts,\xe2\x80\x9d which are imposed to remedy unjust\nenrichment. It then determined that the trial court had failed to properly distinguish the two\nand had essentially used unjust enrichment as a substitute for proof of an oral express trust.\nIt concluded that the siblings\' case must succeed or fail based on whether they had proven\nArnold\'s intent to orally impose trust obligations. According to the court of appeals, either\nDonald had violated Arnold\'s express wishes-which would make a legal constructive trust\nthe only appropriate remedy-or the farm property belonged to Donald, in which case he had\nnot been unjustly enriched by his years of ownership.\n\xc2\xb617 Having come to this conclusion, the court of appeals acknowledged that it\nwould normally be required to remand the case for factual findings regarding the elements of\na legal constructive trust. It did not do so, however, because such a claim requires the party\nchallenging a warranty deed to prove the intent to create a trust. But here, one of the trial\ncourt\'s findings stated that \xe2\x80\x9cArnold did not consider the conveyance to be a transfer of his\nownership rights in the property.\xe2\x80\x9d Relying on this finding of fact, the court of appeals\nconcluded that the siblings\' claim must fail as a matter of law. It reasoned that if Arnold did\nnot intend to transfer ownership at all, then he could not have intended to create a trust\nbecause creation of a trust requires that title to the property be transferred to a trustee. Thus,\nit dismissed the siblings\' claims as a matter of law and instructed the trial court to enter\njudgment quieting title to the property in favor of Donald.\n\xc2\xb618 We granted certiorari to determine whether the court of appeals correctly\napplied Utah\'s law of constructive trusts. Before us, the siblings argue that the court of\nappeals erred in two ways. First, they argue that the court of appeals erred by interpreting the\ntrial court\'s finding of fact in isolation and in a manner inconsistent with its judgment. They\ncontend that the finding of fact regarding Arnold\'s intent to transfer ownership can, and\nshould, be interpreted to mean that Arnold intended to transfer bare legal title while\nmaintaining the beneficial interest in the land. They argue that such an interpretation would\nsupport a constructive trust and that the court of appeals erred when it held that they could\nnot prevail on this claim. Second, the siblings argue that the success of the farm was based\non years of effort and contribution by everyone in the family. They rely on the trial court\'s\n103\n\n\x0cfindings regarding Dwayne\'s payment of back taxes, the contribution of labor by all of the\nsiblings to keep the farm operational, and the siblings\' assistance during the 1978 boundary\ndispute. All of these contributions, they contend, support a finding of unjust enrichment\nbecause their efforts were undertaken in reliance on their belief that the land was being held\nin trust for their benefit.\n\xc2\xb619 We conclude that the district court\'s findings were sufficient to support\nimposition of a constructive trust. In deciding that the findings of fact regarding Arnold\'s\nintent foreclosed the siblings from prevailing on a claim of unjust enrichment, the court of\nappeals erred. The trial court acted within the bounds of its discretion in imposing a\nconstructive trust. Therefore, we reverse the judgment of the court of appeals.\nSTANDARD OF REVIEW\n\xc2\xb6 20 When reviewing cases pursuant to a writ of certiorari, this court reviews the\ndecision of the court of appeals, not that of the district court. The court of appeals\' holding\nthat the siblings could establish neither an oral express trust nor unjust enrichment is a legal\ndetermination that we review for correctness.\n\xc2\xb6 21 With regard to the imposition of a constructive trust, the availability of such a\nremedy is also a question of law reviewed for correctness. But if such a remedy is available,\nthe \xe2\x80\x9c \xe2\x80\x98trial court is accorded considerable latitude and discretion in applying and formulating\nan equitable remedy, and [it] will not be overturned unless it [has] abused its discretion.\xe2\x80\x99 \xe2\x80\x9d\n\xc2\xb6 22 Finally, because \xe2\x80\x9c[u]njust enrichment must remain a flexible and workable\ndoctrine.... we afford broad discretion to the trial court in its application of unjust\nenrichment law to the facts.\xe2\x80\x9d\nANALYSIS\n\xc2\xb6 23 The siblings contend that the trial court was correct in imposing a constructive\ntrust, either as a means of giving effect to an oral express trust, or as a means of remedying\nunjust enrichment. Thus, they argue that the court of appeals erred in two ways. First, they\nargue that the court of appeals misinterpreted the trial court\'s findings of fact and that these\nfindings actually demonstrate Arnold\'s intent to create a trust to benefit the family. Second,\nthey argue that the trial court was correct in finding that Donald had been unjustly enriched\nand that the court of appeals erred in holding otherwise. As such, they claim that the trial\ncourt had discretion to award a constructive trust under either theory.\n\xc2\xb6 24 In addressing the siblings\' claims, we keep a number of important principles in\n104\n\n\x0cmind. First, we affirm our prior statement that \xe2\x80\x9c\xe2\x80\x98the forms and varieties of these trusts ... are\npractically without limit.\xe2\x80\x99 \xe2\x80\x9d We also note that, in cases involving transfers of land, imposing a\nconstructive trust will often \xe2\x80\x9calter a deed or other writing which is regular in form and is\npresumed to convey a clear and unambiguous title.\xe2\x80\x9d We have recognized that altering deeds\nin this way may make it difficult for a landowner to \xe2\x80\x9crest in the security of his title to\nproperty, however solemn might be the instrument on which it was founded.\xe2\x80\x9d To mitigate\nthis effect, we require that the evidence offered to overcome a deed must be \xe2\x80\x9cclear and\nconvincing.\xe2\x80\x9d\n\xc2\xb6 25 Even given this elevated burden of proof, we agree with the siblings with regard\nto their claim for unjust enrichment. First, we hold that the court of appeals incorrectly\ndetermined that the siblings must succeed or fail based solely on the intent underlying\nArnold\'s transfer of land. Rather, a claim for an oral express trust is independent from a\nclaim for unjust enrichment, and either claim may support imposition of a constructive trust.\nSecond, because unjust enrichment is a flexible doctrine and because trial courts have broad\ndiscretion in fashioning remedies for unjust enrichment, we hold that the court of appeals\nerred in reversing the trial court\'s award of a constructive trust. Because we affirm the trial\ncourt\'s finding of unjust enrichment and its imposition of a constructive trust on that basis,\nwe need not determine whether the siblings also could have prevailed in their attempt to\nestablish an oral express trust. In order to explain our conclusions, we find it useful to\narticulate the legal standards for the types of constructive trust at issue in this case.\nI. Constructive Trusts Are a Remedy That May Be Imposed Where a Party Has Been\nUnjustly Enriched or Where Necessary To An Oral Express\n\xc2\xb6 26 The siblings argue that a constructive trust may be imposed under either of two\ndistinct causes of action. One is a cause of action to establish an oral express trust. The other\nis a claim for unjust enrichment. Oral express trusts have \xe2\x80\x9ccertain fundamental\ncharacteristics\xe2\x80\x9d in common with traditional trusts because, like traditional trusts, they are the\nmanifestation of a settlor\'s intent with regard to property. The main such characteristic is the\nimposition of obligations on a trustee \xe2\x80\x9cto act for the benefit of [beneficiaries] as to matters\nwithin the scope of the [trust].\xe2\x80\x9d Like trusts created by a valid writing, constructive trusts\nimposed to give effect to oral express trusts are adequately characterized as \xe2\x80\x9c \xe2\x80\x98a fiduciary\nrelationship with respect to property, arising as a result of a manifestation of an intention to create\nit and subjecting the person in whom the title is vested to equitable duties to deal with it for\n105\n\n\x0cthe benefit of others.\xe2\x80\x99 \xe2\x80\x9d\n\xc2\xb6 27 Where a transfer of land was made with the intent to create such a trust, the\ntrust will generally fail unless evidenced by a writing that complies with the Statute of Frauds.\nBecause oral express trusts do not meet these requirements, they will only be given effect in\n\xe2\x80\x9ccertain circumstances.\xe2\x80\x9d In these instances, the constructive trusts are deemed to \xe2\x80\x9carise[ ] by\noperation of law and [are] not within the statute of frauds.\xe2\x80\x9d\n\xc2\xb628 We have recognized that constructive trusts may be imposed in the\ncircumstances set forth in section 45 of the Restatement (Second) of Trusts (the\n\xe2\x80\x9cRestatement of Trusts\xe2\x80\x9d). This section applies when the transferor of land intends for the\ntransfer to benefit someone other than the transferor or the transferee:\n(1) Where the owner of an interest in land transfers it inter vivos to another in\ntrust for a third person, but no memorandum properly evidencing the intention\nto create a trust is signed, as required by the Statute of Frauds, and the\ntransferee refuses to perform the trust, the transferee holds the interest upon a\nconstructive trust for the third person, if, but only if, (a) the transferee by\nfraud, duress or undue influence prevented the transferor from creating an\nenforceable interest in the third person, or (b) the transferee at the time of the\ntransfer was in a confidential relation to the transferor, or (c) the transfer was\nmade by the transferor in anticipation of death.\nIn short, the imposition of a constructive trust under this section of the Restatement\nof Trusts requires proof that the transferor of land intended to create a trust and that one of\nthe three identified circumstances existed at the time of the transfer. And where proving this\nintent will be contrary to an otherwise valid deed, the evidence of the trust must be clear and\nconvincing.\n\xc2\xb6 29 As with claims based on an oral express trust, claims of unjust enrichment can\nsupport the imposition of a constructive trust. To this end, we have *763 adopted the\nformulation set forth at section 160 of the Restatement of Restitution: \xe2\x80\x9ca constructive trust\nmay arise \xe2\x80\x98where a person holding title to property is subject to an equitable duty to convey it\nto another on the ground that he would be unjustly enriched if he were permitted to retain\nit....\xe2\x80\x99 \xe2\x80\x9d A claim for unjust enrichment in Utah requires proof of three elements:\n\xe2\x80\x9c(1) a benefit conferred on one person by another; (2) an appreciation or\nknowledge by the conferee of the benefit; and (3) the acceptance or retention\n106\n\n\x0cby the conferee of the benefit under such circumstances as to make it\ninequitable for the conferee to retain the benefit without payment of its\nvalue.\xe2\x80\x9d\nWe have also noted that unjust enrichment plays an important role as a tool of\nequity: \xe2\x80\x9c[u]njust enrichment law developed to remedy injustice when other areas of the law\ncould not,\xe2\x80\x9d and therefore \xe2\x80\x9cmust remain a flexible and workable doctrine.\xe2\x80\x9d\n\xc2\xb6 30 Because of the flexible nature of the unjust enrichment doctrine, a constructive\ntrust is an available remedy even in cases where a plaintiff might assert alternative legal\ntheories to support imposition of a constructive trust. Nothing about the constructive trust\nthat is imposed to give effect to an oral express trust does anything to preclude the\nimposition of a constructive trust as a remedy to prevent unjust enrichment.\n\xc2\xb631 Indeed, in Parks v. Zions First National Bank, the plaintiff brought claims under\nsection 44 and 45 of the Restatement of Trusts, as well as a claim for unjust enrichment.\nAlthough the trial court found the plaintiff\'s claim was not one for an oral express trust, we\naffirmed the trial court\'s finding of unjust enrichment and its decision to impose a\nconstructive trust as a remedy. We also explicitly rejected the notion that a party seeking to\nprove the existence of an oral express trust could not, where the facts would support it, also\nseek recovery under a theory of unjust enrichment. Thus, our cases establish the availability\nof both types of constructive trust sought in this case. And where the facts and law will\nsupport it, a plaintiff may alternatively pursue both kinds of constructive trust within the\nsame lawsuit.\n\xc2\xb632 Having articulated the law as it relates to the siblings\' claims, we now address the\nissue presented in this case: whether the court of appeals erred in reversing the trial court\'s\nimposition of a constructive trust. Because of the manner in which the court of appeals\nresolved the issue, we first turn to the court of appeals\' conclusion regarding oral express\ntrusts, and then examine the court of appeals\' conclusion regarding unjust enrichment.\nII. The Court of Appeals Erred in Basing Its Conclusion Solely On Whether Arnold\nIntended to Create An Oral Express Trust\n\xc2\xb6 33 The court of appeals incorrectly concluded that, because the trial court\'s\nfindings did not support an oral express trust, the siblings could not prevail on a theory of\nunjust enrichment. As discussed, our prior cases reveal two distinct legal causes of action\nthat the siblings were free to pursue in this case. To the extent they have alleged that Arnold\n107\n\n\x0cintended to create a trust that would inure to their benefit, they have stated a claim\nconsistent with the cause of action set forth at section 45 of the Restatement of Trusts. If\nthe siblings successfully proved this case, the trial court could have imposed a constructive\ntrust on the farm property to give effect to Arnold\'s intent. To the extent that the siblings\nhave argued that Donald wrongfully retained the benefits of their contributions to the farm\nproperty, they seek a remedy for unjust enrichment. Where a party has successfully proven\nits case for unjust enrichment, the trial court has authority to impose a constructive trust as a\nremedy.\n\xc2\xb6 34 In reviewing our prior cases and the court of appeals\' opinion in this case, we\nare satisfied that the court of appeals articulated these legal standards correctly, but that it\nmisconstrued the relationship between these causes of action. It determined that the siblings\nhad attempted to use the law of unjust enrichment as a substitute for the law of oral express\ntrusts. As such, it determined that the law imposed upon it a binary choice: either Arnold\nintended that Donald take the land as trustee, or the actions Donald took during his years of\nownership were not unjust.\n\xc2\xb635 In fact, there is the potential for significant overlap in this case. If Arnold\nintended that Donald take the land as trustee, then it was both inequitable and a violation of\nthe intended trust for Donald to retain for himself benefits that should have flowed to the\ntrust. In such a case, a constructive trust imposed to give effect to the oral trust would also\nhave remedied the related unjust enrichment. But even if the siblings could not prove\nArnold\'s intent to create such a trust, Donald\'s actions, as found by the trial court, are the\nsort that would also support a claim of unjust enrichment. Assuming the siblings prevailed\non this theory, the constructive trust would not be imposed to give effect to Arnold\'s intent;\nit would be imposed to give effect to the judgment of a court, sitting in equity, regarding\nhow best \xe2\x80\x9cto remedy injustice when other areas of the law [can] not.\xe2\x80\x9d\n\xc2\xb6 36 The court of appeals\' departure from our case law appears to be the result of its\nreliance on a single finding of fact interpreted in isolation. In its findings of fact, the trial\ncourt states that \xe2\x80\x9cArnold did not consider the conveyance to be a transfer of his ownership\nrights in the property.\xe2\x80\x9d In its conclusions of law, the trial court reinforces this point: \xe2\x80\x9cThe\ndeed transfer was for accommodation and not intended to transfer ownership rights to\nDonald.\xe2\x80\x9d The court of appeals equated this finding with a finding that Arnold \xe2\x80\x9cdid not\nintend to transfer the farm into trust.\xe2\x80\x9d Thus, it concluded that this finding precluded any oral\n108\n\n\x0cexpress trust and that a constructive trust therefore could not be imposed.\n\xc2\xb6 37 The siblings argue that the court of appeals simply misinterpreted this finding\nof fact, and that it should be understood to mean that Arnold intended to transfer only legal\ntitle to Donald, while establishing a beneficial interest for the family. The siblings\' urged\ninterpretation is consistent with general trust principles: \xe2\x80\x9cThe fundamental nature of a trust\nis the division of title, with the trustee being the holder of legal title and the beneficiary that\nof equitable title.\xe2\x80\x9d Thus, every time a settlor creates a trust there is some interest in the trust\nres that is not transferred to the trustee. In fact, if ever the trustee also becomes the sole\nbeneficiary, all interests in the trust property will reside in the trustee and legal and equitable\ntitle will merge. So, for Arnold to have intended to create a trust, he necessarily would have\nintended to convey to Donald something less than his full ownership rights. Otherwise, no\nequitable interest would be held on behalf of the beneficiaries.\n\xc2\xb638 The siblings also urge that the court of appeals\' interpretation of this finding of\nfact is an unreasonable construction of the trial court\'s judgment. After all, the siblings note,\nthe court of appeals\' disposition of the case upheld Donald\'s ownership of the land. The\nsiblings argue that this is absurd because it is directly contrary to the finding of fact on which\nthe court of appeals relied. Given the alternative, they argue that the court of appeals had a\nduty to interpret the trial court\'s findings in a manner favorable to its judgment.\n\xc2\xb639 Regardless of the merits of these arguments, if the siblings are to prevail on the\ntheory that Arnold intended to create an oral express trust, the siblings must not only\novercome this ambiguous finding of fact, they must also establish one of the other\ncircumstances set forth in section 45 of the Restatement of Trusts. They urge us to find that\nDonald stood in a confidential relationship with respect to Arnold. There are some findings\nof fact-relating to Arnold\'s deteriorating health, his anxiety regarding welfare coverage, and\nDonald\'s role in the property transfer-that may support the conclusion that Donald and\nArnold had a confidential relationship. But there are also findings of fact that suggest\notherwise-LaRell and Dwayne both occupied positions of trust vis a vis their father and\nparticipated in discussions about how best to handle the land transfer. The trial court\'s\nconclusions of law do not address whether Donald\'s relationship with his father met our\nstandard for a confidential relationship. Further, unresolved issues remain regarding the\nterms of the trust, including how Arnold\'s interest would have descended after his death.\n\xc2\xb640 We decline to address these questions for the first time on appeal. It is sufficient\n109\n\n\x0cfor our purposes to say that the court of appeals erred when it concluded that the siblings\'\nfailure to prove an oral express trust necessarily precluded a finding in their favor under a\ntheory of unjust enrichment. Because the two claims may be pursued independently, we\nneed not determine whether the trial court\'s findings might support a claim under section 45\nof the Restatement of Trusts. Rather, as will be discussed below, the court of appeals erred\nin reversing the trial court\'s finding of unjust enrichment and its imposition of a constructive\ntrust as a means of remedying this unjust enrichment.\nIII. The Court of Appeals Erred in Holding That Donald Was Not Unjustly\nEnriched By the Contributions His Siblings Made To the Farm Property Over\nSeveral Decades\n\xc2\xb6 41 The court of appeals held that because Donald was the transferee under a deed,\nhis acceptance of his siblings\' contributions to the land could not be unjust. In so holding,\nthe court of appeals erred. The standard for determining whether a person has been unjustly\nenriched requires a court to determine whether the defendant accepted and retained benefits\nconferred by the plaintiff under such circumstances as to make it inequitable for the\ndefendant to retain those benefits without compensating the plaintiff.\n\xc2\xb6 42 The court of appeals\' conclusion does not adequately take into consideration the\ncircumstances under which Donald accepted many of the benefits conferred by his siblings.\nAs found by the trial court, the reason the siblings continued to work on the trust property\nafter Arnold\'s death was that Donald led them to believe it was their \xe2\x80\x9cMother\'s farm.\xe2\x80\x9d\nDwayne paid $1,000 in property taxes with the understanding that Arnold needed the money.\nHe did not intend to pay off taxes on land that would soon be owned by Donald. And when\nthe siblings relinquished their interests via the 1978 quitclaim deed and contributed other\nparcels of land to the farm property, they did so with the understanding that they were\nassisting in clearing up title problems so that Donald could litigate the dispute on their\nbehalf. The trial court found all of these benefits, along with \xe2\x80\x9cother benefits from the use\nand negotiations relative to the trust property,\xe2\x80\x9d to be conferred under circumstances that\ngave rise to unjust enrichment.\n\xc2\xb6 43 We hold that these findings were sufficient to support the trial court\'s\nimposition of a constructive trust. The first element of a claim for unjust enrichment-that\nthe siblings confer a benefit on Donald-has clearly been met. Further, as to the second\nelement, there can be no doubt that Donald was aware of these benefits. He acknowledged\n110\n\n\x0cin his testimony that he knew that all of the siblings were contributing to the maintenance of\nthe farm property even though he was not. He redistributed small amounts of the settlement\nproceeds to his siblings while keeping the bulk for himself. And he prompted Dwayne to pay\n$1,000 toward the property taxes and made no attempt to return the money after Arnold\nexecuted the deed purporting to transfer the land to Donald.\n\xc2\xb6 44 The dispute in this case centers on the third element of a claim for unjust\nenrichment. The trial court found that, for decades, Donald represented to his siblings that\nthe farm property was being used to support their mother. Their contributions to the farm\'s\noperation were made because they believed these representations. Arnold\'s management of\nthe farm in the years prior to his death reinforced the idea that the farm was considered a\nfamily farm.\n\xc2\xb6 45 In a manner consistent with our precedent, we decline to weigh for ourselves\nthe relative equities of these actions. In Jeffs v. Stubbs, we announced our rationale for\ngranting trial courts broad discretion in imposing constructive trusts to remedy unjust\nenrichment. The reasons for granting broad discretion articulated in Jeffs play an important\nrole in this case. First, determining whether the circumstances surrounding the parties\'\ninteractions were inequitable is a fact-intensive process for which trial courts are uniquely\nsuited. The nature of this equitable determination requires balancing the ramifications of an\nentire course of conduct. The trial court, having heard all of the evidence in context, is in the\nbest position to undertake this balancing. Second, cases of unjust enrichment require the trial\njudge to \xe2\x80\x9cobserve[ ] \xe2\x80\x98facts,\xe2\x80\x99 such as a witness\'s appearance and demeanor, relevant to the\napplication of the law that cannot be adequately reflected in the record available to appellate\ncourts.\xe2\x80\x9d We are keenly aware that trial courts are in the best position to make determinations\nabout credibility and veracity. This is especially the case where, as here, the legal standard\nbeing applied requires the court to determine what is equitable. We are also mindful that all\nof these observations will not necessarily be included in the record on appeal.\n\xc2\xb6 46 The court of appeals\' decision does not appropriately defer to the trial court\'s\njudgment with regard to the claim for unjust enrichment. Specifically, the court of appeals\nconcluded that the trial court had grafted equitable considerations into its inquiry regarding\nArnold\'s intent to create an oral express trust. But in so concluding, the court of appeals\nrejected the theory of unjust enrichment as a valid, alternative, and independent theory on\nwhich the trial court\'s imposition of a constructive trust could legitimately rest.\n111\n\n\x0c\xc2\xb6 47 Further, the court of appeals concluded that \xe2\x80\x9cthe only wrongful act alleged by\nthe Siblings is [Donald\'s] failure to comply with Arnold\'s expressed intentions.\xe2\x80\x9d But this\nclearly conflicts with the trial court\'s findings regarding the siblings\' contributions to the\nfarm property and their understanding that Donald was acting in their interests. Even if\nDonald was the legitimate owner of this property at all times after the 1967 transfer, he was\nnot unequivocally entitled to retain the fruits of his siblings\' labor on the farm, the amount\nof tax payments Dwayne made with the understanding they would be used for Arnold\'s\nbenefit, the value of the property transferred under the siblings\' quitclaim deeds, the\nsettlement proceeds from the 1978 dispute that were retained by Donald, and contributions\nby the siblings of other property to Donald.\n\xc2\xb6 48 Jeffs is instructive on this point as well. In that case, the United Effort Plan Trust\n(the \xe2\x80\x9cUEP\xe2\x80\x9d) owned title to land. Members of a religious group affiliated with the trust were\npermitted to occupy the land. The UEP encouraged these occupants to make improvements\nto the land by leading them to believe they could occupy the land for their lifetimes. After\nthey were removed from the land, the occupants brought a number of claims, including\nclaims for unjust enrichment, against the UEP. The UEP defended on the grounds that,\nbecause the occupants knew the UEP held title to the land when they made improvements,\nit was not unjust for the UEP to keep those improvements even after the occupants were no\nlonger permitted to reside on the land. Relying on the Restatement of Restitution, we\nrejected the UEP\'s position, and held that \xe2\x80\x9can owner \xe2\x80\x98cannot retain a benefit which\nknowingly he has permitted another to confer upon him by mistake.\xe2\x80\x99 \xe2\x80\x9d The Restatement\nposition carries even more force in this case because here, unlike in Jeffs the siblings did not\nknow for decades that Donald claimed title to the land. Put simply, even if the court of\nappeals correctly concluded that Donald owned the farm property, this did not insulate\nDonald\'s conduct from being inequitable.\n\xc2\xb6 49 Thus, the court of appeals erred in reversing the trial court\'s judgment that\nDonald had been unjustly enriched. The trial court found that a number of benefits had\nbeen conferred on Donald by the siblings because of the siblings\' understanding that the\nland was being used as a family farm. Rather than assert his ownership of the land, Donald\naccepted and retained these benefits. Given the broad discretion that we afford trial courts\nwhen they apply the law to the facts in unjust enrichment cases, we hold that the court of\nappeals erred in reversing the trial court\'s judgment. The trial court\'s legal conclusion was\n112\n\n\x0cnot absolutely precluded as the court of appeals determined, but was adequately supported.\nWe therefore reverse the judgment of the court of appeals, and affirm the trial court\'s\nimposition of a constructive trust in favor of the siblings.\nCONCLUSION\n\xc2\xb6 50 We hold that the trial court acted within the bounds of its discretion in\nimposing a constructive trust in favor of the siblings. Unjust enrichment is a cause of action\nseparate from an attempt to prove the existence of an oral express trust. Thus, even if the\nsiblings have failed to prove the existence of an oral express trust in this case, something we\nassume without deciding, they were still free to pursue their claim of unjust enrichment as an\nindependent cause of action. The trial court explicitly found that Donald had been unjustly\nenriched, and numerous of its factual findings support that judgment. Given the broad\ndiscretion that must necessarily be afforded trial courts when they apply the law of unjust\nenrichment to the facts of a given case, we disagree with the court of appeals\' conclusion\nthat imposition of a constructive trust was not an available or appropriate remedy in this\ncase. The judgment of the court of appeals is therefore reversed.\nNotes, Questions and Problems\n1. Students often confuse resulting trusts with constructive trusts. Both types of trusts are\nremedial. One way to distinguish the types of trust is to focus upon the testator\xe2\x80\x99s intent. In a\ncase involving a resulting trust, the court\xe2\x80\x99s focus is on the actions of the trustee. If the\ntrustee acted as if he intended to create a trust, the court will act to carry out that intent.\nOnce the court finds a resulting trust, the trustee must surrender the property to the\nbeneficial owner upon demand. When deciding whether or not to establish a constructive\ntrust, the court evaluates the actions of the person who is in possession of the disputed\nproperty. If that person has wrongfully acquired the property the court will create a\nconstructive trust. The court deems the property to be held in trust. The court considers the\nperson unjustly holding the property to be the trustee, and the person to whom the property\nrightfully belongs to be the beneficiary.\n2. Some courts hold that the constructive trust arises at the time the property is unjustly\nobtained. Other courts have concluded that the constructive trust occurs only after the\nbeneficiary seeks a constructive trust and the court grants the relief. What are the pros and\ncons of each approach?\n3. Problems\n113\n\n\x0cLabel each of the following examples as a resulting trust or a constructive trust.\na). Olivia texted Thomas and told him she wanted to give him her house to hold in trust for\nthe benefit of her daughter, Melinda. Thomas texted her back and agreed to serve as the\ntrustee.\nb). Paige executed a will containing the following language, \xe2\x80\x9cI leave the residuary of my\nestate to Milena in trust for the benefit of my favorite actor.\xe2\x80\x9d\nc) When Gail was a teenager, she put her baby girl up for adoption. Twenty years later,\nRosalinda came to Gail and claimed to be her birth daughter. Gail and Rosalinda developed\na relationship. Thus, Gail executed a will containing the following provision, \xe2\x80\x9cI leave\n$500,000 to First Bank to hold in trust for my daughter, Rosalinda.\xe2\x80\x9d After Gail\xe2\x80\x99s death, her\nchildren received evidence that Rosalinda was a con woman who had lied about being Gail\xe2\x80\x99s\nbirth daughter.\nd) Raymond believed that his daughter, Lisa, was possessed by the devil because she liked to\ngamble. Consequently, Raymond executed a will containing the following provision: \xe2\x80\x9cI leave\nmy entire establish to City Bank in trust for the benefit of the Church of Peace in order that\nthe demon can be cast out of my daughter, Lisa. After Lisa is demon-free, I would like her to\nbecome a beneficiary of the trust.\xe2\x80\x9d\nNOTE: Secret and Semisecret Trusts\nUnder some circumstances, courts have used constructive trusts to rectified unjust\nenrichment that may result from a secret trust. For example, in her will, the testator makes\nan outright gift to a third party and does not indicate the existence of a trust. However, prior\nto the execution of the will, the third party agrees that he would hold the property in trust\nfor another person. This is considered a secret trust, so the court will admit outside\ninformation to enforce the trust and prevent unjust enrichment. The facts of a semisecret\ntrust are different. In that case, in her will, the testator makes an outright gift to a third party,\nand indicates in the will that the third party is to keep the gift in trust, but does not name the\nbeneficiaries in the will. This semisecret trust will fail for lack of beneficiaries. Since the trust\nwould fail, the third party would have no interest in the gift. Thus, a constructive trust is\nunnecessary to prevent the third party from being unjustly enriched.\nExample 1-Ruth\xe2\x80\x99swill contained the following language: \xe2\x80\x9cI leave $100,000 to\nPeter.\xe2\x80\x9d Ruth told her friend, Bonnie that she was leaving $100,000 to Peter\nto keep in trust for Bonnie. The court will allow in oral testimony to prove\n114\n\n\x0cthe trust, so that Peter will not be unjustly enriched.\nExample 2- Ruth\xe2\x80\x99s will contained the following language: \xe2\x80\x9cI leave $100,000\nto Peter in trust for people I told Bonnie about.\xe2\x80\x9d The court will not allow in\nBonnie\xe2\x80\x99s oral testimony because the trust has been proven by the will, so\nthere is no danger of unjust enrichment. The trust fails for lack of\nbeneficiaries and money reverts back to Ruth\xe2\x80\x99s estate to be distributed\naccordingly.\n\nOlliffee v. Wells, 130 Mass. 221\nGRAY, C. J.\nUpon the face of this will the residuary bequest to the defendant gives him no\nbeneficial interest. It expressly requires him to distribute all the property bequeathed to him,\ngiving him no discretion upon the question whether he shall or shall not distribute it, or shall\nor shall not carry out the intentions of the testatrix, but allowing him a discretionary\nauthority as to the manner only in which the property shall be distributed pursuant to her\nintentions. The will declares a trust too indefinite to be carried out, and the next of kin of the\ntestatrix must take by way of resulting trust, unless the facts agreed show such a trust for the\nbenefit of others as the court can execute. Nichols v. Allen, 130 Mass. 211. No other written\ninstrument was signed by the testatrix, and made part of the will by reference, as in Newton v.\nSeaman\xe2\x80\x99s Friend Society, 130 Mass. 91.\nThe decision of the case therefore depends upon the effect of the fact, stated in the\ndefendant\'s answer, and admitted by the plaintiffs to be true, that the testatrix, before and at\nthe time of and after the execution of the will, orally made known to the defendant her wish\nand intention that the residue should be disposed of and distributed by him as executor of\nher will for charitable uses and purposes, according to his discretion and judgment, and\ndirected him so to dispose of and distribute it, especially expressing her desire as to the\nobjects to be preferred, all which objects, taking the whole direction together, may be\nassumed to be charitable in the legal sense.\nIn any view of the authorities it is quite clear, and is hardly denied by the defendant\'s\ncounsel, that intentions not formed by the testatrix and communicated to the defendant\nbefore the making of the will could not have any effect against her next of kin. Thayer v.\nWellington, 9 Allen 283 Johnson v. Ball, 5 De Gex & Sm. 85. Moss v. Cooper, 1 Johns. & Hem.\n352. But assuming, as the defendant contends, that all the directions of the testatrix set forth\n115\n\n\x0cin the answer are to be taken as having been orally communicated to the defendant and\nassented to by him before the execution of the will, we are of opinion that the result must be\nthe same.\nIt has been held in England and in other States, although the question has never\narisen in this Commonwealth, that, if a person procures an absolute devise or bequest to\nhimself by orally promising the testator that he will convey the property to or hold it for the\nbenefit of third persons, and afterwards refuses to perform his promise, a trust arises out of\nthe confidence reposed in him by the testator and of his own fraud, which a court of equity,\nupon clear and satisfactory proof of the facts, will enforce against him at the suit of such\nthird persons. (citations omitted).\nUpon like grounds, it has been held in England that, if a testator devises or\nbequeaths property to his executors upon trusts not defined in the will, but which, as he\nstates in the will, he has communicated to them before its execution, such trusts, if for lawful\npurposes, may be proved by the admission of the executors, or by oral evidence, and\nenforced against them?? Crook v. Brooking, 2 Vern. 50,106. Pring v. Pring, 2 Vern?? 99. Smith v.\nAttersoll, 1 Russ. 266. And in two or three comparatively recent cases it has been held that\nsuch trusts may be enforced against the heirs or next of kin of the testator, as well as against\nthe devisee. Shadwell, V. C., in Podmore v. Gunning, 5 Sim. 485, and 7 Sim. 644. Chatterton, V.\nC., in Riordan v. Banon, Ir. R. 10 Eq. 469. Hall, V. C., in Fleetwood\'s case, 15 Ch. D. 594. But\nthese cases appear to us to have overlooked or disregarded a fundamental distinction.\nWhere a trust not declared in the will is established by a court of chancery against the\ndevisee, it is by reason of the obligation resting upon the conscience of the devisee, and not\nas a valid testamentary disposition by the deceased. Cullen v. Attorney General, L. R. 1 H. L.\n190. Where the bequest is outright upon its face, the setting up of a trust, while it diminishes\nthe right of the devisee, does not impair any right of the heirs or next of kin, in any aspect of\nthe case; for if the trust were not set up, the whole property would go to the devisee by force\nof the devise; if the trust set up is a lawful one, it enures to the benefit of the cestuis que trust;\nand if the trust set up is unlawful, the heirs or next of kin take by way of resulting trust. Boson\nv. Statham, 1 Eden, 508; S. C. 1 Cox Ch. 16. Russell v. Jackson, 10 Hare, 204. Wallgrave v. Tebbs,\n2 K. & J. 313.\nWhere the bequest is declared upon its face to be upon such trusts as the testator has\notherwise signified to the devisee, it is equally clear that the devisee takes no beneficial\n116\n\n\x0cinterest; and, as between him and the beneficiaries intended, there is as much ground for\nestablishing the trust as if the bequest to him were absolute on its face. But as between the\ndevisee and the heirs or next of kin, the case stands differently. They are not excluded by the\nwill itself. The will upon its face showing that the devisee takes the legal title only and not\nthe beneficial interest, and the trust not being sufficiently defined by the will to take effect,\nthe equitable interest goes, by way of resulting trust, to the heirs or next of kin, as property\nof the deceased, not disposed of by his will. Sears v. Hardy, 120 Mass. 524, 541, 542. They\ncannot be deprived of that equitable interest, which accrues to them directly from the\ndeceased, by any conduct of the devisee; nor by any intention of the deceased, unless\nsignified in those forms which the law makes essential to every testamentary disposition. A\ntrust not sufficiently declared on the face of the will cannot therefore be set up by extrinsic\nevidence to defeat the rights of the heirs at law or next of kin. See Lewin on Trusts (3d ed.)\n75.\nBy the statutes of the Commonwealth, no will (with certain exceptions not material\nto be here stated) \xe2\x80\x9cshall be effectual to pass any estate, whether real or personal, nor to\ncharge or in any way affect the same,\xe2\x80\x9d unless signed by the testator and attested by three\nwitnesses. Rev. Sts. c. 62, \xc2\xa7 6. Gen. Sts. c. 92, \xc2\xa7 6.\nIn Thayer v. Wellington, 9 Allen 283 the testator by his will bequeathed to Hastings and\nWellington $15,000 \xe2\x80\x9cin trust to appropriate the same in such manner as I may by any\ninstrument under my hand direct and appoint,\xe2\x80\x9d and nominated Hastings executor, and made\na residuary bequest to him in trust for the benefit of certain persons named. The testator\nalso signed a paper, dated the same day as the will, referring to it, and addressed to Hastings\nand Wellington, directing them to pay over the $15,000 to the city of Cambridge for the\nsupport of a public library; and they, after the death of the testator, signified in writing to the\ncity their intention of so paying it when they should receive it from the executor. After the\ndeath of Hastings, upon a bill in equity by the administrator de bonis non for instructions, to\nwhich Wellington, the city, the cestuis que trust, and the heirs at law of the testator, were made\nparties, the court held that the clause in the will, the paper signed by the testator but not\nattested as required by the statute of wills, and the assent in writing of the trustees, gave the\ncity no right to the fund; and that the heirs at law or next of kin would have been entitled to\nit, but for its being included in the residuary bequest.\nIt appears in the report on file, upon which that case was reserved for the\n117\n\n\x0cdetermination of the full court, that an attorney at law testified that he drew up both the will\nand the paper at the request of Hastings, and delivered both drafts to him; and that\nWellington testified that the paper was handed to him by Hastings after the testator\'s death.\nThose facts would, according to the cases of Crook v. Brooking and Smith v. Attersoll, above\ncited, and which were relied on in the argument for the city of Cambridge, have been\nsufficient evidence of an assent by Hastings before the execution of the will, and, according\nto the decision of Vice Chancellor Wood in Tee v. Ferris, 2 K. & J. 357, would have entitled\nthe city to enforce the trust against both trustees. Yet the court did not treat them as of any\nweight as between the surviving trustee and the city on the one hand, and the next of kin or\nthe residuary legatees on the other, but merely observed that it did not appear at what time\nthe paper was placed by the testator in the hands of Hastings. 9 Allen 288.\nDecree for the plaintiffs.\n\n3.2.3. Honorary Trusts\nAn honorary trust arises when a testator attempts to leave a large sum of money to a\npet. This money is not left to someone to care for the pet. The testator actually leaves the\nmoney directly to the pet. Since a pet is incapable of inheriting, the court invalidates the\nbequest to the pet. However, in order to carry out the testator\xe2\x80\x99s intent to make sure that the\npet is take care of properly, the court will create an honorary trust over the property that was\nleft to the pet. Unlike a charitable trust for a group of animals or a bequest to the SPSA, a\nhonorary trust comes into play when a bequest is made to provide for a specific animal or\nobject. In addition to the care of a pet, honorary trusts may be created for the preservation\nof tombs, monuments, or graves, and for the saying of masses or the erecting of a statutes.\nThis trust is deemed to be honorary because it is binding on the conscience of the trustee.\nThe beneficiary is unable to demand an accounting from the trustee, so the trustee must act\non his or her honor. The honorary trust is not enforceable by an identifiable beneficiary, but\nit is treated as valid so long as the trustee chooses to carry out the trust purpose. As the next\ncase illustrates, when and if the trustee no longer wishes to do so, the trust terminates and\nthe court will create a resulting trust.\n\nPhillips v. Estate of Holzmann, 740 So. 2d 1\nGERSTEN, J.\nJo Ellen Phillips (\xe2\x80\x9cappellant\xe2\x80\x9d) appeals an order requiring her to return $25,000.00,\n118\n\n\x0cpaid to her under Marie M. Holzmann\'s (the \xe2\x80\x9ctestator\xe2\x80\x9d) will, to the testator\'s estate. We\naffirm because the appellant received the $25,000.00 in trust for a specific non-charitable\npurpose and that purpose no longer exists.\nIn her will, the testator left $25,000.00 to her \xe2\x80\x9cbeloved friend,\xe2\x80\x9d the appellant, \xe2\x80\x9cfor\nthe care and shelter of [her] two dogs, Riley and Shaun.\xe2\x80\x9d Shortly after the testator\'s death,\nhowever, Riley and Shaun were put to sleep for health reasons. Due to this turn of events,\nthe testator\'s parents petitioned to have the $25,000.00 returned to the estate.\nThe trial court concluded that the appellant received the $25,000.00 as an \xe2\x80\x9chonorary\ntrust\xe2\x80\x9d and that the honorary trust failed when the dogs were put to sleep. Upon failure, the\ncourt determined, the trust became a \xe2\x80\x9cresulting trust\xe2\x80\x9d for the benefit of the estate\'s residual\nbeneficiaries. We agree with the trial court\'s analysis.\nThe polestar in construing any will is to ascertain the intent of the testator. See West\nv. Francioni, 488 So.2d 571 (Fla.3d DCA 1986); Hulsh v. Hulsh, 431 So.2d 658 (Fla.3d DCA\n1983), review denied, 440 So.2d 352 (Fla. 1983). Here, the testator unambiguously directed that\nthe money was for the benefit of her dogs, not the appellant. She, thus, intended to establish\nan honorary trust. See In re Searight\'s Estate.; Dep\xe2\x80\x99t of Taxation of Ohio v. Miller, Ohio App. 417,\n95 N.E. 2d 779 (1950); Restatement (Second) of Trusts \xc2\xa7 124 cmt. d (1959); John G.\nGrimsley, Florida Law of Trusts 18-2 (4th ed.1993).\nA trust of this sort is not a true trust. See e.g. The Fidelity Title and Trust Co. v. Clyde, 143\nConn. 247, 121 A.2d 625 (1956). It does not conform to the time-honored requirement that\nthere be a beneficiary capable of enforcing its terms. See The Fidelity Title and Trust Co. v. Clyde,\n121 A.2d at 630. Nonetheless, the American Law Institute takes the position that the\ntransferee has the power to apply the property to the designated purpose, but cannot be\ncompelled to do so. See Restatement (Second) of Trusts \xc2\xa7 124 (1959). If the transferee does\nnot apply the property to its designated purpose, she holds it upon a resulting trust for the\nsettlor or the settlor\'s estate. See Restatement (Second) of Trusts \xc2\xa7\xc2\xa7 124 b; 418 cmt. b (1959).\nWe adopt the American Law Institute\'s position regarding honorary trusts.\nBecause the testator\'s dogs were put to sleep, the appellant/transferee could not\napply the $25,000.00 to the designated purpose. A resulting trust was thereby created and the\ntrial court properly ordered the appellant to return the property to the estate. The judgment\nis affirmed in all respects.\nNOTE: STATUTORY HONORARY TRUSTS\n119\n\n\x0cHonorary trusts were the common law solution to the \xe2\x80\x98rich pet\xe2\x80\x9d dilemma. Currently,\nmany states have codified the honorary trust. The following statute is a typical example.\nMcKinney\xe2\x80\x99s EPTL \xc2\xa7 7-8.1 Trusts for Pets\n(a) A trust for the care of a designated domestic or pet animal is valid. The intended use of\nthe principal or income may be enforced by an individual designated for that purpose in the\ntrust instrument or, if none, by an individual appointed by a court upon application to it by\nan individual, or by a trustee. Such trust shall terminate when the living animal beneficiary or\nbeneficiaries of such trust are no longer alive.\n(b) Except as expressly provided otherwise in the trust instrument, no portion of the\nprincipal or income may be converted to the use of the trustee or to any use other than for\nthe benefit of all covered animals.\n(c) Upon termination, the trustee shall transfer the unexpended trust property as directed in\nthe trust instrument or, if there are no such directions in the trust instrument, the property\nshall pass to the estate of the grantor.\n(d) A court may reduce the amount of the property transferred if it determines that amount\nsubstantially exceeds the amount required for the intended use. The amount of the\nreduction, if any, passes as unexpended trust property pursuant to paragraph (c) of this\nsection.\n(e) If no trustee is designated or no designated trustee is willing or able to serve, a court shall\nappoint a trustee and may make such other orders and determinations as are advisable to\ncarry out the intent of the transferor and the purpose of this section.\nClass Discussion Tool\nStacie and Abigail met while they were in medical school and became best friends.\nYears later, Stacie and her husband, Robert, were involved in an ugly divorce. Stacie wanted\nto make sure that Robert did not get an interest in her vacation home. Thus, Stacie\nquitclaimed the vacation home to Abigail. Abigail promised to return the vacation home to\nStacie once the divorce was final. At that time, Stacie also put $500,000 and a house in a\nrevocable trust for the benefit of her children, Mitchell and LaTrell. Stacie selected Abigail to\nbe trustee of the revocable trust. Stacie kept the $500,000 in her bank account. Stacie mailed\nAbigail a picture of the house that was to be part of the corpus of the trust. After Stacie\xe2\x80\x99s\ndivorce was final, she discovered that Abigail was having an affair with Robert. The women\n120\n\n\x0chad a big fight, and Abigail refused to return the vacation home to Stacie. What are the legal\nissues that arise from the fact pattern?\n\n121\n\n\x0cChapter 4 - Discretionary and\nSupport and the Rights of the\nBeneficiary\xe2\x80\x99s Creditors\nThere are several types of private trusts. In this chapter, I will discuss several of the\nmost common types. One of the primary legal issues that arises as a consequence of the\nexistence of trust is whether the beneficiary\xe2\x80\x99s creditors can attach the funds in the trust.\nFrequently, distributions from the trust may be the beneficiary\xe2\x80\x99s only source of income.\nTherefore, getting access to the trust funds may be the sole way for the creditor to get paid.\nIn this chapter, I will describe the types of trusts in relation to the creditor\xe2\x80\x99s ability to get\npaid. A mandatory trust is one that mandates the trustee to distribute all the income and\ndoes not give the trustee the discretion to choose either the beneficiaries or the amount to\nbe distributed. The trustee\xe2\x80\x99s sole job is to manage and disperse the trust funds. An example\nwould be: T leaves $500,000 in trust to X to distribute $20,000 of the income to A and B\nannually. A and B can go to court to force the trustee to give them the promised amount.\nThe money in a mandatory trust is similar to earned income, so the beneficiary\xe2\x80\x99s creditor can\nfile an action against the trust for the amount of the debt.\n\nLineback v. Stout, 339 S.E.2d 103\nWELLS, Judge.\nRespondent argues that it was the testator\'s intention in Article IV of his will to\ncreate a discretionary trust wherein payments to petitioner were to be in the sole discretion\nof the trustee and that the superior court erred in ruling to the contrary. A discretionary trust\nis a trust wherein the trustee is given the discretion to determine whether and to what extent\nto pay or apply trust income or principal to or for the benefit of a beneficiary. Bogert, The\nLaw of Trusts and Trustees \xc2\xa7 228 (rev. 2d ed. 1979); Scott, The Law of Trusts \xc2\xa7\xc2\xa7 128.3, 155 (3d\ned. 1967). Accord N.C. Gen. Stat. \xc2\xa7 36A-115(b)(1) (1984). Under a true discretionary trust, the\ntrustee may withhold the trust income and principal altogether from the beneficiary and the\nbeneficiary, as well as the creditors and assignees of the beneficiary, cannot compel the\ntrustee to pay over any part of the trust funds. Bogert, supra; Scott, supra, at \xc2\xa7 155. A trust\n122\n\n\x0cwherein the trustee has discretion only as to the time or method of making payments to or\nfor the benefit of the beneficiary is not a true discretionary trust. Bogert, supra; Scott, supra.\nWhether a trust is a discretionary one naturally depends upon the nature of the\npowers conferred upon the trustee, that is, whether the powers are mandatory or\ndiscretionary, and if discretionary, the extent of the discretion afforded the trustee. In\ndetermining the nature of the powers conferred upon a trustee, we are guided by the\nfollowing:\nThe powers of a trustee are either mandatory or discretionary. A power is mandatory\nwhen it authorizes and commands the trustee to perform some positive act.... A power is\ndiscretionary when the trustee may either exercise it or refrain from exercising it, ... or when\nthe time, or manner, or extent of its exercise is left to his discretion. [Citations omitted.]\nWoodard v. Mordecai, 234 N.C. 463, 67 S.E.2d 639 (1951).\nThe court further explained:\nThe court will always compel the trustee to exercise a mandatory power. ... It is\notherwise, however, with respect to a discretionary power. The court will not undertake to\ncontrol the trustee with respect to the exercise of a discretionary power, except to prevent an\nabuse by him of his discretion. The trustee abuses his discretion in exercising or failing to\nexercise a discretionary power if he acts dishonestly, or if he acts with an improper even\nthough not a dishonest motive, or if he fails to use his judgment, or if he acts beyond the\nbounds of a reasonable judgment. [Citations omitted.] Id.\nWhether a power is mandatory or discretionary depends upon the intent of the\nsettlor as evidenced by the terms of the trust. See Bogert, supra, at \xc2\xa7 552; Scott, supra at \xc2\xa7 187.\nThe intent of a settlor is determined by the language he chooses to convey his thoughts, the\npurposes he seeks to accomplish and the situation of the parties benefitted by the trust.\nDavison v. Duke University, 282 N.C. 676, 194 S.E.2d 761 (1973). Use by the settlor of words\nof permission or option, or reference to the discretion of the trustee, in describing the\ntrustee\'s power indicates that the settlor intended that the power be discretionary, whereas\nuse of directive or commanding language indicates that a mandatory power was intended. See\nBogert, supra, at \xc2\xa7 552. Compare Woodard v. Mordecai, supra, and First National Bank of Catawba\nCounty v. Eden, 55 N.C.App. 697, 286 S.E.2d 818 (1982) (discretionary power) with Kuykendall\n123\n\n\x0cv. Proctor, 270 N.C. 510, 155 S.E.2d 293 (1967) (mandatory duty). Where the power is\ndiscretionary, the extent of the discretion given the trustee may be enlarged by use of\nadjectives such as \xe2\x80\x9cabsolute\xe2\x80\x9d and \xe2\x80\x9cuncontrolled.\xe2\x80\x9d Davison v. Duke University, supra.\nThe language of the testamentary trust in the present case clearly indicates that the\ntestator intended for the power given respondent as trustee to be discretionary. The testator,\nin granting respondent the power to distribute the trust income or principal, referred to the\n\xe2\x80\x9csole judgment\xe2\x80\x9d or \xe2\x80\x9cdiscretion\xe2\x80\x9d of respondent six times. Such language is used both with\nreference to the net income and the principal of the trust, thus indicating that the testator\nintended for respondent to have discretion regarding the distribution of both. This is made\nparticularly clear by the fact the testator referred to respondent\'s discretion twice in the first\nsentence of the trust provisions-the first time possibly referring only to the trust principal\nbut the second time apparently referring to both the net income and the principal of the\ntrust. That respondent\'s power is discretionary is also shown by the fact the testator\nauthorized respondent to pay the trust income or principal to or for the benefit of petitioner\nbut did not command or require her to do so. Rather, the testator directed respondent to\nexercise her discretion regarding the distribution of the trust funds. The testator\'s use of the\nadjectives \xe2\x80\x9cabsolute\xe2\x80\x9d and \xe2\x80\x9cuncontrolable\xe2\x80\x9d [sic] to describe the discretion vested in\nrespondent further emphasizes the discretionary nature of the power granted respondent\nand evidences the testator\'s intent to vest wide discretion in respondent. To hold that\nrespondent\'s power to distribute trust income or principal to petitioner is mandatory, as did\nthe superior court in effect, we would have to ignore totally the references made by the\ntestator to respondent\'s discretion in setting forth that power. This we cannot and will not\ndo.\nThe language and terms of the trust further show that the discretion vested in\nrespondent extends to whether and to what extent to pay the trust income or principal to or\nfor the benefit of petitioner. The amount of trust income or principal to be expended for\npetitioner\'s benefit is to be determined by respondent in her sole discretion. We emphasize,\nhowever, respondent\'s duty to exercise her judgment reasonably to carry out the intent of\nthe testator. Woodard v. Mordecai, supra.\nThe terms of the trust also show that the testator intended for the trust funds to be\nused to supplement, rather than supplant, the financial assistance which petitioner was\n124\n\n\x0creceiving from the Department of Social Services. Petitioner was receiving the Department\'s\nfinancial assistance at the time the testator executed his will. The testator was apparently\nreferring to that assistance when he provided for respondent\'s consideration of \xe2\x80\x9cincome\navailable to [petitioner] from other sources\xe2\x80\x9d in determining whether to distribute trust\nprincipal to petitioner. Such provision certainly tends to show that the testator did not\nintend for the trust funds to be used as a substitute for the public assistance. Accord Zeoli v.\nCommissioner of Soc. Serv., 179 Conn. 83, 425 A.2d 553 (1979). The creation of the trust for\n\xe2\x80\x9cthe lifetime\xe2\x80\x9d of petitioner and the provision for the distribution of the trust corpus\nremaining upon petitioner\'s death also reveal the testator\'s intent that the trust funds be used\nto provide supplemental, rather than total, support for petitioner. Accord Tidrow v. Dir., Mo.\nState Div. of Fam. Servs., 688 S.W.2d 9 (Mo.App. 1985). These terms of the trust show that the\ntestator intended and anticipated that the trust corpus might not be completely exhausted\nduring petitioner\'s lifetime. Id. In order to effectuate this intent, respondent\'s power to\ndistribute the trust funds to petitioner must be interpreted as discretionary. If respondent\'s\npower is interpreted as mandatory, the trust fund will be rapidly depleted and the testator\'s\nintent will be thwarted.\nWe conclude that the testamentary trust is a discretionary one and that therefore the\nsuperior court erred in requiring respondent to expend funds from the trust for the general\nwelfare, support, maintenance and benefit of petitioner. The judgment of the superior court\nis\nReversed.\n\n4.1\n\nDiscretionary Trusts\nThe testator who has more confidence in the trustee may give that person more\n\ndiscretion. Under the terms of a discretionary trust, the trustee has discretion over payments\nof either the income or the principle or both. In some cases, the trustee has the discretion to\nchoose the specific beneficiaries from a group that the trustee indicates. Unlike the\nmandatory trust beneficiaries, the beneficiaries of a discretionary trust cannot force the\ntrustee to pay out any of the trust funds. This is an important distinction because if the\nbeneficiary has no right to a payment from the trust, neither does the beneficiary\xe2\x80\x99s creditors.\nThus, a creditor of the beneficiary cannot by judicial order, compel the trustee to pay him.\nNonetheless, the creditor is not without a remedy because of the existence of the cutting off\n125\n\n\x0cincome rule. According to that rule, if the trustee exercises his discretion and pays the\nbeneficiary, the trustee must pay the creditor who stands in the beneficiary\xe2\x80\x99s shoes. The lien\nattaches the moment in time between when the trustee exercises his discretion to pay the\nbeneficiary and the time the property is transferred to the beneficiary. This rule also applies\nwhen the trustee pays money on the beneficiary\xe2\x80\x99s behalf.\n\nWilcox v. Gentry, 867 P.2d 281\nMCFARLAND, Justice:\nRon and Nancy Wilcox appeal from the district court\'s judgment holding that any\npayments made by the trustee of the Frank Gentry Trust (Trust) which are made for the\nbenefit of Isabella Gentry and not paid directly to Isabella, are not subject to garnishment.\nThe Court of Appeals affirmed the judgment appealed from, but reversed, sua sponte, a\ncontinuing garnishment order entered by the district court relative to payments made by the\ntrustee directly to Isabella. Gentry 18 Kan.App.2d 356, 853 P.2d 74. The matter is before us\non petition for review.\nIn 1985, Frank Gentry created a revocable Trust. During his lifetime, Frank was the\nbeneficiary of the Trust. Upon Frank\'s death certain trust property was to be distributed to\nnamed individuals. The residue of the Trust\'s assets was to be divided into five equal shares.\nFour of these shares were to be distributed to the four individuals designated as their\nrecipients. This action concerns the fifth share. The applicable Trust provision in Article III,\nSection D.5, is as follows:\n\xe2\x80\x9c(e) One share shall remain in trust until the death of Isabella Gentry. The\ntrustee, in his sole discretion, may make such distributions of income and\nprincipal to her or on her behalf as the trustee deems advisable after giving due\nconsideration to all sources of funds available to her. Upon the death of\nIsabella Gentry, the trust shall terminate and the balance of the trust and\naccumulated income shall be distributed to the then surviving beneficiaries in\nproportion to the beneficial interests they would have been entitled to, under\nD. 5.(a), (b), (c) and (d) above, had Grantor died on the actual date of Isabella\nGentry\'s death. In the event Isabella Gentry should predecease the Grantor,\nthis share shall be equally divided between Mary Margaret Gentry and Eric\nGentry, or pass fully to the survivor.\xe2\x80\x9d\nThe district court and the Court of Appeals characterized the Trust provisions\n126\n\n\x0capplicable to Isabella Gentry in (e) as being discretionary in nature. This determination is\nunchallenged herein and we agree we are dealing with a discretionary trust. The Trust\ncontains no spendthrift provision.\nRon and Nancy Wilcox obtained a judgment against Isabell Gentry for fraud in the\nsale of a residential property. Their judgment was for $40,000 actual damages and $11,667.35\npunitive damages. They garnished the Trust to seek satisfaction of their judgment. Frank\nGentry, grantor and sole beneficiary during his lifetime, had died previously, thereby\nactivating section 5(e) relative to Isabell.\nThe district court held that any trustee payments directly to Isabell were subject to\ngarnishment but that trustee payments for Isabell\'s benefit were not. The propriety of the\ndistrict court\'s determination relative to payments made for Isabell\'s benefit is the only\naspect of the judgment from which an appeal was taken.\nThe Court of Appeals\' affirmance of the district court was based, in part, upon our\ncase of State ex rel. Secretary of SRS v. Jackson, 249 Kan. 635, 822 P.2d 1033 (1991). Reliance on\nJackson is misplaced. Jackson involved an action by SRS, pursuant to K.S.A. 39-719b, to\ncompel the Jackson Trust beneficiary to reimburse SRS for public assistance benefits she had\nreceived. The Trust was not a party to the action, and the trustee was not being asked to pay\nanything to SRS. The issue was whether or not the trust had been an \xe2\x80\x9cavailable resource\xe2\x80\x9d to\nJackson at the time she was receiving public assistance funds for purposes of determining\nher eligibility for such SRS benefits. Thus, the spendthrift provisions of the Jackson Trust\nwere irrelevant. The case involved only Jackson\'s interest in the trust. We held that the trust\nwas discretionary as to payments of principal but not discretionary as to income. Thus, as\nJackson had the right to receive the trust income, such income was an available resource to\nJackson in determining her eligibility for public assistance.\nIn Jackson we cited Restatement (Second) of Trusts \xc2\xa7 155(1) (1957) and comment (b),\nwhich provide:\n\xe2\x80\x9c(1) Except as stated in \xc2\xa7 156, if by the terms of a trust it is provided that the\ntrustee shall pay to or apply for a beneficiary only so much of the income and\nprincipal or either as the trustee in his uncontrolled discretion shall see fit to\npay or apply, a transferee or creditor of the beneficiary cannot compel the\ntrustee to pay any part of the income or principal.\n\xe2\x80\x9cComment b: \xe2\x80\x9cA trust containing such a provision as is stated in this Section\n127\n\n\x0cis a \xe2\x80\x98 discretionary trust\xe2\x80\x99 and is to be distinguished from a spendthrift trust,\nand from a trust for support. In a discretionary trust it is the nature of the\nbeneficiary\'s interest rather than a provision forbidding alienation which\nprevents the transfer of the beneficiary\'s interest. The rule stated in this\nSection is not dependent upon a prohibition of alienation by the settlor; but\nthe transferee or creditor cannot compel the trustee to pay anything to him\nbecause the beneficiary could not compel payment to himself or application\nfor his own benefit.\xe2\x80\x9d\nSection 155(1) was pertinent to Jackson as we were concerned with the interest of the\nbeneficiary to the trust and her concomitant ability to compel payment to her.\nIn the case before us, the issue is not whether the trustee can be compelled to pay\nincome or principal. The issue before us is, if the trustee exercises its discretion and makes a\npayment on behalf of the beneficiary, whether such payment is subject to the creditors\'\ngarnishment.\nThis makes Restatement (Second) of Trusts \xc2\xa7 155(2,) rather than (1), the applicable\nstatement, as it provides:\n\xe2\x80\x9c(2) Unless a valid restraint on alienation has been imposed in accordance with\nthe rules stated in \xc2\xa7\xc2\xa7 152 and 153, if the trustee pays to or applies for the\nbeneficiary any part of the income or principal with knowledge of the transfer or\nafter he has been served with process in a proceeding by a creditor to reach it, he\nis liable to such transferee or creditor.\xe2\x80\x9d\nAs previously stated, there is no valid restraint on alienation (spendthrift provision)\ninvolved herein. This section makes no distinction between payments directly to the\nbeneficiary or on the beneficiary\'s behalf.\nPertinent comments to subsection (2) are found therein as follows:\n\xe2\x80\x9ch. Effect of payment by trustee to beneficiary after assignment. Although in the case of\na discretionary trust a transferee or creditor of the beneficiary cannot compel\nthe trustee to pay over any part of the trust property to him, yet if the trustee\ndoes pay over any part of the trust property to the beneficiary with\nknowledge that he has transferred his interest or after the trustee has been\nserved with process in a proceeding by a creditor of the beneficiary to reach\nhis interest, the trustee is personally liable to the transferee or creditor for the\n128\n\n\x0camount so paid, except so far as a valid provision for forfeiture for alienation\nor restraint on alienation has been imposed as stated in \xc2\xa7\xc2\xa7 150, 152 and 153.\n\xe2\x80\x9ci. Effect of applying property by trustee for beneficiaries after assignment. If the trustee\napplies for the benefit of the beneficiary income or principal, he is liable to\nan assignee of the beneficiary\'s interest or to a creditor of the beneficiary, if\nhe makes such application after he has knowledge of the assignment or after\nhe has been served with process in a proceeding brought by a creditor of the\nbeneficiary to reach the beneficiary\'s interest.\xe2\x80\x9d\nIn IIA Scott on Trusts \xc2\xa7 155.1, p. 160-61 (4th Ed.1987), the following pertinent\ndiscussion\nappears: \xe2\x80\x9cAlthough the trustee need not pay any part of the trust fund to the beneficiary or\nto his creditors, but may withhold it entirely, but if he does determine to pay part of it to\nhim, he should pay it to the creditors who now stand in his shoes. The English courts,\nhowever, have here made a distinction. They have held that the trustee can properly apply the\ntrust fund for the use of the beneficiary even though he is bankrupt or his creditors have\nbrought a proceeding to reach his interest.\nIn In re Smith [,(1928), 1 Ch. 915, 919], Romer, J., said:\n\xe2\x80\x98Where there is a trust to apply the whole or such part of a fund as trustees\nthink fit to or for the benefit of A., and A. has assigned his interest under the\ntrust, or become bankrupt, although his assignee or his trustee in bankruptcy\nstand in no better position that he does and cannot demand that the fund\nshall be handed to them, yet they are in a position to say to A.: \xe2\x80\x9cAny money\nwhich the trustees do in the exercise of their discretion pay to you, passes by\nthe assignment or under the bankruptcy.\xe2\x80\x9d But they cannot say that in respect\nof any money which the trustees have not paid to A. or invested in\npurchasing goods or other things for A., but which they apply for the benefit\nof A. in such a way that no money or goods ever gets into the hands of A.\xe2\x80\x99\nThe distinction thus drawn between payment to the beneficiary and applying\ntrust funds for his benefit seems to be arbitrary and without any sound basis\nin public policy. The result is that the beneficiary is enabled to enjoy the\nbenefit of the trust in spite of his insolvency, as long as the trustee is willing\nto apply the trust estate for his benefit.\xe2\x80\x9d\n129\n\n\x0cIn Bogert, Trust and Trustees \xc2\xa7 228, pp. 524-32 (Rev.2d Ed. 1992), distinctions\nbetween discretionary and spendthrift trusts are discussed, and the following is stated relative\nto a creditor\'s ability to reach trust funds:\n\xe2\x80\x9cIf the trust is a true \xe2\x80\x98 discretionary\xe2\x80\x99 trust, the nature of the interest of the\nbeneficiary, rather than any expressed restraint on his power to alienate or the\nrights of his creditors, determines questions of voluntary or involuntary\nalienation. The beneficiary cannot secure the aid of a court in compelling the\ntrustee to pay or apply trust income or principal to him since the terms of the\ntrust permit the trustee to withhold payments at his will. Until the trustee elects\nto make a payment the beneficiary has a mere expectancy. Nor can a creditor\ncompel the trustee to exercise his discretion to make payments. If the\nbeneficiary attempts to transfer his interest, or his creditors seek to take it,\nbefore the trustee has made an election to pay or apply, the transferee or\ncreditor has no remedies against the trustee because he stands in the shoes of\nthe beneficiary.\n\xe2\x80\x9cIf, however, the trustee exercises his discretion by making a decision to pay to\nor apply for the beneficiary, then the beneficiary can force the trustee to confer\nsuch a benefit on him, and he can transfer his right and his creditors can take\nadvantage of it, if the trust does not have a spendthrift clause. If the trustee\nreceives notice of an attempted voluntary transfer, or is served with process by\na creditor of the beneficiary, before the making of his decision to allocate trust\nproperty to the beneficiary, he will be liable to the assignee or creditor if he\nthereafter uses his discretion and elects to pay to the beneficiary. In such a case\nhis duty is to pay to the assignee or creditor if he decides to pay or apply,\nunless the discretionary trust instrument contains a spendthrift clause, or a\nstatute gives rights to the creditor as in the case where the surplus of income\nover that needed for support is made liable to creditors.\xe2\x80\x9d\nThe above-cited treatises are persuasive. We see no valid reason for treating\npayments to a beneficiary differently from payments made on behalf of the beneficiary as far\nas creditors are concerned. If the creditor has the right to reach payments made to the\nbeneficiary excluding payments made on behalf of the beneficiary serves only to encourage\ncircumvention of that right. We adopt Restatement (Second) of Trusts \xc2\xa7 155(2) and find it\n130\n\n\x0cdeterminative of this issue. The district court and the Court of Appeals erred in holding that\nonly funds paid directly to a discretionary trust beneficiary are subject to garnishment by a\ncreditor.\nIn their petition for review, Ron and Nancy Wilcox object to the Court of Appeals\'\nreversal, sua sponte, of the district court\'s continuing order of garnishment as to funds paid\ndirectly to the beneficiary.\nThe Wilcoxes did not appeal from this part of the judgment as it was in their favor.\nNo cross-appeal was filed.\nThe order of continuing garnishment entered herein as to funds paid directly to the\nbeneficiary was in no way an inherent part of the sole issue on which the appeal was taken or\nnecessary to the determination of that issue. Even if such had been the situation, the parties\nshould have been afforded the opportunity to brief the sua sponte issue.\nThe judgment of the Court of Appeals is reversed. The judgment of the district court\nis reversed, and the case is remanded for further proceedings.\nNotes, Questions and Problems\n1. Like the beneficiary of any other trust, the beneficiary of a mandatory trust is a person\nwho may be vulnerable. Further, the money in the trust belongs to the settlor. Consequently,\nshould the beneficiary\xe2\x80\x99s creditors be able to touch the funds in the trust?\n2. The cutting off rule is designed to insure that the beneficiary of a discretionary trust is\nunable to avoid paying his creditor once he receives trust funds. Once the funds are in the\nbeneficiary\xe2\x80\x99s hands, the creditors should be able to be paid.\n3. Problems\nIn which of the following cases is the cutting off income rule triggered:\na). The trustee pays the beneficiary\xe2\x80\x99s electricity bill using the trust funds.\nb). The trustee buys the beneficiary an American Express gift card using the trust funds.\nc). The trustee buys the beneficiary a diamond ring using the trust funds.\nd). The trustee gives the beneficiary\xe2\x80\x99s $20,000 from the trust.\n\n4.2.\n\nSupport Trust\nThe purpose of a support trust is to ensure that the beneficiary\xe2\x80\x99s financials needs are\n\nmet. The support trust can be either pure or discretionary. A pure support trust is one that\nrequires the trustee to use the funds in the trust to support the beneficiary by paying specific\n131\n\n\x0cbills. The trustee\xe2\x80\x99s discretion is limited. He must use the trust funds only for the beneficiary\xe2\x80\x99s\nsupport. Under the terms of a discretionary support trust, the trustee has the discretion to\ndecide how much of the trust funds are needed to support the beneficiary. The trustee\xe2\x80\x99s\ndiscretion may be limited by a support standard. For instance, the trust instrument may\nrequire the trustee to provide the beneficiary with a reasonable standard of living or to\nenable the beneficiary to maintain the lifestyle to which he has become accustomed. When\nexercising his discretion with regards to distributing money to the beneficiary, the trustee has\na duty to inquire to determine the amount of support that the beneficiary needs. Since the\npurpose of the trust is to provide support for the beneficiary, he cannot alienate his interest\nin the trust. Thus, the beneficiary\xe2\x80\x99s creditors cannot attach the funds in the trust. However,\ncreditors who supply the beneficiary with necessaries like medicine may recover from the\ntrust. In a growing number of jurisdictions, the children and spouses of the beneficiary of a\nsupport trust may enforce claims for child support and alimony.\n\nIn the Matter of the Barkema Trust, 690 N.W. 2d 50\nCADY, Justice.\nIn this appeal, we must decide if the corpus of a support trust is included in the\nestate of the beneficiary of the trust upon death for purposes of a claim for recovery of\nMedicaid benefits provided to the trust beneficiary during her lifetime for nursing home\ncare. The district court found the trust was included within the estate. Upon our review, we\naffirm.\nI. Background Facts and Proceedings\nGeorge Barkema established a trust in his will. He left one quarter of the residue of\nhis estate to three of his children, Richard, Doris, and Rose, to hold in trust for his fourth\nchild, Lois. His will directed, \xe2\x80\x9cIf possible, only the income from said share shall be used for\nLois, however, if necessary for her proper support and maintenance, then the corpus of said\ntrust may be invaded to the extent said trustees deem necessary.\xe2\x80\x9d George\'s will failed to\nspecify what was to become of the remainder of the trust corpus after Lois\'s death. After\nGeorge died, his children entered into an agreement providing that in the event of Lois\'s\ndeath, the trust corpus was to be distributed in equal shares to Lois\'s children, Dianne Gille\nand Gayle Torgenson. This agreement was filed with the court in 1978.\nYears later, Lois began living in a nursing home. In 1998, Richard helped her apply\nfor Title XIX Medicaid to pay for her medical expenses. Between the time when Lois began\n132\n\n\x0creceiving Medicaid benefits and her death on April 14, 2003, the State Medicaid program\npaid approximately $55,000 for her care. However, the State never attempted to obtain\nincome payments from the trustee or compel the trustee to invade the corpus for Lois\'s\nsupport during Lois\'s lifetime.\nOn June 2, 2003, Richard, as trustee, filed a final report, recommending that the\nremaining corpus of the trust (approximately $18,000) be distributed to Dianne and Gayle,\npursuant to the 1978 agreement between the siblings. On June 25, 2003, Health\nManagement Systems, Inc., on behalf of the Iowa Department of Human Services\n(hereinafter the Department), filed both a claim in the trust and an objection to the final\nreport. It claimed it was entitled to the remaining corpus of the trust under Iowa code\nsection 249A.5(2) (2003). On October 8, 2003, the district court granted the Department\'s\nclaim and ordered Richard to pay to it the remaining corpus of the trust and interest thereon.\nThe district court based its decision on policy reasons and on what it perceived to be\nGeorge\'s intent. Dianne and Gayle appeal.\nII. Standard of Review\nThis case was tried by the probate court in equity. See In re Roehlke\xe2\x80\x99s Estates, 231\nN.W.2d 26, 27 (Iowa 1975) (\xe2\x80\x9cA hearing on objections to a fiduciary\'s final report is an\nequitable proceeding.\xe2\x80\x9d (Citations omitted.)); see also Iowa Code \xc2\xa7 633.33 (2003) (stating that\nall matters are tried by the probate court in equity other than will contests, involuntary\nproceedings to appoint guardians or conservators, and establishment of contested claims).\nAccordingly, our scope of review is de novo. Iowa R .App. p. 6.4.\nIII. Discussion\nIowa Code section 249A.5(2) provides:\nThe provision of medical assistance to an individual who is fifty-five years of\nage or older, or who is a resident of a nursing facility, intermediate care\nfacility for persons with mental retardation, or mental health institute, who\ncannot reasonably be expected to be discharged and return to the individual\'s\nhome, creates a debt due the department from the individual\'s estate for all\nmedical assistance provided on the individual\'s behalf, upon the individual\'s\ndeath.\nThus, the Medicaid benefits provided by the Department to Lois created a $55,000 debt due\nto the Department upon her death. This debt is payable from Lois\'s \xe2\x80\x9cestate,\xe2\x80\x9d which is\n133\n\n\x0cdefined as any real property, personal property, or other asset in which [she] ... had any legal\ntitle or interest at the time of [her] death, to the extent of such interests, including but not\nlimited to interests in jointly held property, retained life estates, and interests in trusts. Id. \xc2\xa7\n249A.5(2)(c ) (emphasis added).\nThe Department argues the $18,000 remaining corpus of the trust is an \xe2\x80\x9cinterest in\n[a] trust[],\xe2\x80\x9d Id. and is part of Lois\'s estate, from which it can collect its $55,000 debt. Dianne\nand Gayle, however, contend that the trust terminated upon Lois\'s death and that she\ntherefore had no interest in the trust \xe2\x80\x9cat the time of her death.\xe2\x80\x9d See Id.\nOur first task is to classify the trust at issue. Because the corpus of the trust could\nonly be invaded \xe2\x80\x9cif necessary for [Lois\'s] proper support and maintenance,\xe2\x80\x9d the corpus of\nthe trust was held in a form of support trust. See Austin Wakeman Scott, Abridgement of the\nLaw of Trusts \xc2\xa7 154 (1960) [hereinafter Scott on Trusts] (defining a support trust as one in\nwhich the trustee is directed to distribute so much \xe2\x80\x9cas is necessary for the education or\nsupport of the beneficiary\xe2\x80\x9d); accord Strojek v. Hardin County Bd. of Supervisors, 602 N.W.2d 566,\n570 (Iowa Ct. App. 1999) (\xe2\x80\x9cThe terms of a support trust require the trustee to pay or apply\nso much of the trust\'s income or principal as necessary for the beneficiary\'s care or\neducation.\xe2\x80\x9d (Citation omitted.)). There are two types of support trusts: (1) pure support\ntrusts, and (2) discretionary support trusts. See George Gleason Borgert & George Taylor\nBogert, The Law of Trusts and Trustees \xc2\xa7 229 (2d. ed. 1993) [hereinafter Bogert on Trusts]; see\nalso Strojek 602 N.W.2d at 570; Smith v. Smith, 246 Neb. 193, 517 N.W. 2d 394, 398 (1994);\nEvelyn Ginsburg Abranavel, Discretionary Support Trusts, 69 Iowa L.Rev. 273, 278-80 (1983)\n[hereinafter Abranavel].\nA settlor creates a pure support trust \xe2\x80\x9c[i]f a trustee is directed to pay or apply trust\nincome or principal for the benefit of a named person, but only to the extent necessary to\nsupport him, and only when the disbursements will accomplish support.\xe2\x80\x9d Bogert on Trusts \xc2\xa7 229\n(emphasis added). In contrast, a settlor creates a discretionary support trust if \xe2\x80\x9cthe stated\npurpose of the trust is to furnish the beneficiary with support, and the trustee is directed to\npay to the beneficiary whatever amount of trust income [or principal] the trustee deems\nnecessary for his support.\xe2\x80\x9d Bogert on Trusts \xc2\xa7 229; see also Smith, 517 N.W. 2d at 398\n(describing a discretionary support trust as a hybrid of a pure support trust and a pure\ndiscretionary trust). Generally, if the trust is a discretionary support trust, the beneficiary has\na right that the trustee pay him the amount which in the exercise of reasonable discretion is\n134\n\n\x0cneeded for his support ...; and the beneficiary can transfer this interest or his creditors may\nreach it, unless it is protected by a spendthrift clause. Bogert on Trusts \xc2\xa7 229; see also Bureau of\nSupport v. Kreitzer, 16 Ohio St.2d 147, 243 N.E.2d 83, 86 (1968) (stating that \xe2\x80\x9cthe words \xe2\x80\x98care,\ncomfort, maintenance and general well-being\xe2\x80\x99 are to be deemed an enforceable standard of a\nfiduciary\'s conduct to the extent of providing minimal support for a destitute cestui que\ntrust\xe2\x80\x9d and that the state, as a creditor having provided support to the beneficiary, \xe2\x80\x9cmay be\nconsidered to stand in [her] place to pursue whatever right, claim or remedy she may have,\nincluding such as she may have as a destitute cestui que trust\xe2\x80\x9d); Scott on Trusts \xc2\xa7 187 (stating\nthat although a trustee has discretion whether to make distributions, \xe2\x80\x9cif he is directed to pay\nas much of the income and principal as is necessary for the support of a beneficiary, he can\nbe compelled to pay at least the minimum amount which in the opinion of a reasonable man\nwould be necessary\xe2\x80\x9d); Lawrence A. Frolik, Discretionary Support Trusts for a Disabled Beneficiary:\nA Solution or a Trap for the Unwary?, 46 U. Pitt. L. Rev. 335, 342 (1985) (explaining that when a\ntrust is a discretionary support trust, \xe2\x80\x9cthe trustee can be required to distribute sufficient\nincome to the beneficiary to provide at least a minimum level of support\xe2\x80\x9d).\nThe language used by George Barkema created a discretionary support trust. The\ntrust agreement contained a support provision and provided directions for the trustee to use\nthe trust corpus if necessary for Lois\'s support and maintenance. By using the words \xe2\x80\x9cto the\nextent said trustees deem necessary,\xe2\x80\x9d it gave the trustees some discretion as to whether to\ninvade the corpus, see Bohac v. Graham, 424 N.W.2d 144, 146 n.3 (N.D. 1988)(finding a\ndiscretionary support trust when the trust allowed the trustee to invade the corpus as he\n\xe2\x80\x9cmay deem necessary\xe2\x80\x9d for the beneficiary\'s support; stating that \xe2\x80\x9cinclusion of the support\nlanguage suggests an enforceable standard requiring the trustee to provide a minimum level\nof support to the beneficiary\xe2\x80\x9d (citations omitted)).\nHaving determined that the trust at issue was a discretionary support trust, we must\nnext determine whether Lois\'s interest in the discretionary support trust is the kind of\ninterest encompassed by section 249A.5(2)(c). In construing a statute,\n[o]ur goal is to determine the intent of the law, gleaned generally from the\nstatutory language. We also consider the statute\'s \xe2\x80\x9csubject matter, the object\nsought to be accomplished, the purpose to be served, underlying policies,\nremedies provided, and the consequences of the various interpretations.\xe2\x80\x9d\nCox v. State, 686 N.W.2d 209, 213 (Iowa 2004)(citations omitted). Thus, we begin by\n135\n\n\x0cexamining the statutory language.\nThe phrase \xe2\x80\x9cinterests in trusts\xe2\x80\x9d is not defined in chapter 249A. See Iowa Code ch.\n249A. However, the legislature clearly intended to define \xe2\x80\x9cestate\xe2\x80\x9d broadly, and to include\nmore than legal title, because it defined it to include any \xe2\x80\x9clegal title or interest.\xe2\x80\x9d Id. \xc2\xa7\n249A.5(2)(c ) (emphasis added). It also chose to define \xe2\x80\x9cestate\xe2\x80\x9d more broadly than the\nfederal Medicaid law. The federal statute provides that \xe2\x80\x9cestate\xe2\x80\x9d \xe2\x80\x9cshall include all real and\npersonal property and other assets included within the individual\'s estate, as defined for\npurposes of State probate law.\xe2\x80\x9d 42 U.S.C. \xc2\xa7 1396p(b)(4)(A) (2000). However, the federal\nstatute provides that \xe2\x80\x9cestate\xe2\x80\x9d \xe2\x80\x9cmay include, at the option of the State ..., any other real and\npersonal property and other assets in which the individual had any legal title or interest at the\ntime of death.\xe2\x80\x9d Id. \xc2\xa7 1396p(b)(4)(B). It appears our legislature sought to exercise its option\nby including interest in addition to legal title.\nWe next consider the purpose of the Medicaid recovery statute. As one court\nexplained,\nCongress mandated that [states participating in the Medicaid\nprogram] adopt estate recovery provisions and permitted states to\nadopt an expansive definition of \xe2\x80\x9cestate\xe2\x80\x9d to address the increased\ndemand for Medicaid benefits from the nation\'s aging population. In\ndoing so, Congress intended to give states \xe2\x80\x9cwide latitude\xe2\x80\x9d in seeking\nestate recoveries. \xe2\x80\x9cAllowing states to recover from the estates of\npersons who previously received assistance furthers the broad\npurpose of providing for the medical care of the needy; the greater\namount recovered by the state allows the state to have more funds to\nprovide future services.\xe2\x80\x9d\nEstate of DeMartino v. Div. of Med. Assistance & Health Servs., 373 N.J. Super. 210, 861 A.2d\n138, 144 (2004)(citations omitted). The Medicaid program is designed to serve \xe2\x80\x9cindividuals\nand families who do not possess adequate funds for basic health services. It is \xe2\x80\x9c \xe2\x80\x98the payer of\nlast resort.\xe2\x80\x99 \xe2\x80\x9d \xe2\x80\x9d Strand v. Rasmussen, 648 N.W. 2d 95, 106 (Iowa 2002) (citations omitted).\nWith this in mind, we find that a person has an \xe2\x80\x9cinterest\xe2\x80\x9d in the trust to the extent\nthe assets of a trust are actually available to a trust beneficiary, as that term is used in section\n249a.5(2)(c) Cf. Linser v. Office of Attorney Gen., 672 N.W. 2d 643, 646 (N.D. 2003) (\xe2\x80\x9cUnder\nboth federal and state law, an asset must be \xe2\x80\x98actually available\xe2\x80\x99 to an applicant to be\n136\n\n\x0cconsidered a countable asset for determining Medicaid eligibility.\xe2\x80\x9d (Citation omitted.)). \xe2\x80\x9cIn\norder for an asset to be considered an actually available resource, an applicant must have a\nlegal ability to obtain it.\xe2\x80\x9d Hecker v. Stark County Soc. Serv. Bd. 527 N.W.2d 226, 237 (N.D.\n1994) (citations omitted). This approach is consistent with the purpose of the recovery\nstatute and the broad language used by our legislature.\nThe Barkema Trust was a discretionary support trust that contained enough of a\ndistribution standard to create an interest of the beneficiary in the corpus. The trustee was\nrequired to pay Lois, during her lifetime, \xe2\x80\x9cthe amount which in the exercise of reasonable\ndiscretion [was] needed for [her] support.\xe2\x80\x9d Bogert on Trusts \xc2\xa7 229. This gave Lois the legal\nability to compel the trustee to invade the corpus of the trust and make distributions to her\nfor her support. Consequently, she had an \xe2\x80\x9cinterest\xe2\x80\x9d in the corpus of the trust. We next\nconsider whether the interest was present at the time of her death.\nUnder the Medicaid recovery statute, the Department can collect its debt from Lois\'s\ninterest in the trust that she had \xe2\x80\x9cat the time of [her] death.\xe2\x80\x9d Iowa Code \xc2\xa7 249A.5 (2)(c ).\nGayle and Dianne argue that \xe2\x80\x9cat the time of her death\xe2\x80\x9d means \xe2\x80\x9cat the precise moment she\ndied.\xe2\x80\x9d They claim Lois had no interest at the time of her death because the corpus passed to\nthem upon her death by operation of law. We reject this argument for the reason expressed\nby the Minnesota Court of Appeals: \xe2\x80\x9c\xe2\x80\x98[A]t the time of death\xe2\x80\x99 must be construed to mean a\npoint in time immediately before death. Any other reading of this phrase would render the\nestate recovery statute meaningless because upon death, property immediately passes to\nbeneficiaries.\xe2\x80\x9d In re Estate of Gullberg, 652 N.W. 2d 709, 713 n. 1 (Minn. Ct. App. 2002)\n(citation omitted). For example, besides interests in trusts, the Medicaid recovery statute\nincludes jointly held property in the definition of \xe2\x80\x9cestate.\xe2\x80\x9d See Iowa Code \xc2\xa7 249A.5 (2)(c ).\nUnder property law, joint tenancy property passes by operation of law to the other joint\ntenant when one joint tenant dies. 20 Am. Jur.2d Cotenancy and Joint Ownership \xc2\xa7 3 (1995). If\n\xe2\x80\x9cat the time of death\xe2\x80\x9d meant \xe2\x80\x9cat the moment of death,\xe2\x80\x9d the jointly held property would\nalready have passed to the decedent\'s joint tenant at the time when the decedent\'s \xe2\x80\x9cestate\xe2\x80\x9d is\nto be defined for purposes of the Medicaid recovery statute. This interpretation of \xe2\x80\x9cat the\ntime of death\xe2\x80\x9d would render the legislature\'s inclusion of jointly held property in the\ndefinition of \xe2\x80\x9cestate\xe2\x80\x9d meaningless. \xe2\x80\x9cIn interpreting statutes, we will assume that the\nlegislature intends to accomplish some purpose and that the statute was not intended to be a\nfutile exercise.\xe2\x80\x9d State v. Reed, 596 N.W.2d 514, 515 (Iowa 1999) (citing State v. Horton, 509\n137\n\n\x0cN.W.2d 452, 454 (Iowa 1993); Mallory v. Paradise, 173 N.W.2d 264, 268 (Iowa 1969)).\nAccordingly, we conclude the phrase \xe2\x80\x9cat the time of death\xe2\x80\x9d means the time immediately\nbefore the Medicaid recipient\'s death.\nThus, the Department acquired Lois\'s \xe2\x80\x9cright that the trustee pay [her] the amount\nwhich in the exercise of reasonable discretion is needed for [her] support.\xe2\x80\x9d Bogert on Trusts \xc2\xa7\n229. Richard, the trustee of the trust, conceded that the Medicaid benefits the Department\nprovided to Lois were necessary for her support. Accordingly, the Department\'s $55,000\ndebt may be collected from the remaining corpus of the trust.\nIV. Conclusion\nFor the foregoing reasons, we affirm the ruling of the district court.\nNOTE-Medicaid and Trust Assets\nThe Barkema case involved a trust beneficiary who received government assisted.\nIn that case, the court permitted the government to be reimbursed from the remaining\ncorpus of the trust. The question is whether a person with a trust fund should be eligible for\ngovernment benefits in the first place. In making that determine the first step is to classify\nthe trust as self-settled or created by a third party. The second step is to ascertain whether\nthe funds in the trust are deemed to be the resource of the beneficiary receiving the state\nsupport. For Medicaid purposes, the trust is considered to be self-settled if the person\xe2\x80\x99s\nmoney was used to fund all or part of the corpus of the trust and the trust is established by\nhim, his spouse or a person or court with the legal authority to act on his behalf or at his\nrequest or his spouse\xe2\x80\x99s request. If the trust is categorized as a revocable self-settled trust,\nboth the corpus and the income of the trust are considered to be resources available to the\nstate-supported beneficiary. When the case involves an irrevocable self-settled trust, any\nincome or corpus that under any circumstances could be paid to or applied for the benefit of\nthe state-supported person could be viewed as a resource. Any resource will impact the\nperson\xe2\x80\x99s eligibility for Medicaid.\nWith regards to trusts created by third parties, a trust will not be considered a\nresource available to the person if it is established for a disabled individual from his\nproperty, by a parent, grandparent or guardian, or by a court and the trust provides that the\nsate will receive upon the persons\xe2\x80\x99 death all amounts remaining in the trust up to the amount\nequal to the total medical assistance paid by the state. Discretionary trust created by the will\n138\n\n\x0cof one spouse for the benefit of the surviving spouse is not deemed a resource available to\nthe surviving spouse.\n\n139\n\n\x0cChapter 5 - Spendthrift Trusts and\nCreditors\nA spendthrift is a person who squanders money. If the testator wants to provide for\na person who she knows is wasteful, her best option is to create a spendthrift trust or to\nplace a spendthrift provision in any other type of private trust. The beneficiary of a\nspendthrift trust cannot voluntarily alienate his or her interest in the trust. In the case of a\nmandatory trust with a spendthrift clause, the beneficiary can waste the money that he\nreceives from the trustee. However, the beneficiary cannot transfer his interest in the trust.\nLikewise, the beneficiary\xe2\x80\x99s creditors cannot force the trustee to pay his debts from the funds\nin the trust. This type of trust is created by placing a disabling restraint upon the beneficiary\nand his creditors. No specific language is needed to create a spendthrift trust as long as the\ntestator manifests an intent to create one. Thus, a spendthrift trust may be created by\nimplication based upon the totality of the circumstances involved in the trust\xe2\x80\x99s creation. All\njurisdictions have enacted statutes permitting spendthrift trusts. Most of those statutes are\nsimilar to the Uniform Trust Code\xe2\x80\x99s provision that is set out below.\nUniform Trust Code (2000)\n\xc2\xa7502. Spendthrift Provision\n(a) A spendthrift provision is valid only if it restrains both voluntary and involuntary transfer\nof a beneficiary\xe2\x80\x99s interest.\n(b) A term of a trust providing that the interest of a beneficiary is held subject to a\n\xe2\x80\x9cspendthrift trust,\xe2\x80\x9d or words of similar import, is sufficient to restrain both voluntary and\ninvoluntary transfer of the beneficiary\xe2\x80\x99s interest.\n(c) A beneficiary may not transfer an interest in a trust in violation of a valid spendthrift\nprovision and, except as otherwise provided in this [article], a creditor or assignee of the\nbeneficiary may not reach the interest or a distribution by the trustee before its receipt by the\nbeneficiary.\n\xc2\xa7503. Exceptions to Spendthrift Provision\n(a) In this section, \xe2\x80\x9cchild\xe2\x80\x9d includes any person for whom an order or judgment for child\nsupport has been entered in this or another State.\n(b) Even if a trust contains a spendthrift provision, a beneficiary\xe2\x80\x99s child, spouse, or former\n140\n\n\x0cspouse who has a judgment or court order against the beneficiary for support or\nmaintenance, or a judgment creditor who has provided services for the protection of a\nbeneficiary\xe2\x80\x99s interest in the trust, may obtain from a court an order attaching present or\nfuture distribution to or for the benefit of the beneficiary.\n(c) A spendthrift provision is unenforceable against a claim of this State or the United States\nto the extent a statute of this State or federal law so provides.\nProblems\nAnswer the following questions based upon the UTC.\n1. Ryan, a compulsive gambler, borrowed $50,000 from his friend Mario to pay off his\ngambling debts. In exchange for the loan, Ryan signed a contract agreeing to repay him out\nof the funds in a spendthrift trust created for him by his mother. Ryan went to the trustee\nand ask for $50,000, so he could repay Mario. What result?\n2. Nina established a spendthrift trust for the benefit of her son, Ivan. While he was married,\nIvan had an affair with Jennifer. As a result of that affair, Jennifer gave birth to a son, Elliot.\nIvan refused to provide financial support for Elliot. Elliot had to have emergency surgery\nthat cost $150,000. Jennifer sued the trust seeking assistance to pay off the hospital bill.\nWhat result?\n3. Sheldon created a spendthrift trust for the benefit of her daughter, Maria. Maria\naccumulated over $30,000 in credit card debt. One of the credit card companies obtained a\n$20,000 judgment against Maria. That company sued to attach the trust funds. The trustee\nhired Julius, an attorney, to defend the trust. After Julius successfully protected the trust\nassets, he submitted a $15,000 bill for attorney fees. The trustee thought that the attorney\nfees were too high, so he refused to pay it. Julius sued the trust to recover the attorney fees.\nWhat result?\n4. Jessie established a spendthrift trust for the benefit of her niece, Paula. Paula did not pay\nincome taxes on the income that she earned from a part-time job. As a result, the Internal\nRevenue Service obtained a $11,000 judgment against her. The IRS filed suit against the trust\nseeking to satisfy the judgment. What result?\n\n5.1\n\nExpressed Spendthrift Trust\nThe following is an example of the creation of an expressed spendthrift trust: Louise\n\ndevises property to Samuel in trust to pay the income to James for life. The trust instrument\n141\n\n\x0ccontains a clause stating: \xe2\x80\x9cAs beneficiary of this trust, James is hereby restrained from\nalienating, anticipating, encumbering, or in any manner assigning his or her interest or estate,\neither in principal or income, and is without the power so to do, nor shall such interest or\nestate be subject to his or her liabilities or obligations not to judgment or other legal process,\nbankruptcy proceedings or claims of creditors or others.\xe2\x80\x9d By inserting this language in the\ntrust, Louise ensures that James\xe2\x80\x99 creditors cannot obtain an interest in the trust.\n\n5.2\n\nImplied Spendthrift Trust\n\nMorrison v. Doyle, 582 N.W. 2d 237\nGARDEBRING, Justice.\nWe are asked to determine whether the trust at issue in this case is a \xe2\x80\x9cspendthrift\ntrust.\xe2\x80\x9d If so, the assets of the trust are protected from attachment by the primary\nbeneficiary\'s judgment creditors; if not, the creditors, whose judgment against the primary\nbeneficiary William Doyle (appellant) arises from a business deal, are entitled to attach the\nassets in the trust, as the trial court and court of appeals have held. We reverse the court of\nappeals, holding that the settlor\'s intent in creating the trust was to protect the trust funds\nfrom the primary beneficiary\'s creditors and that the powers afforded to Doyle, as trustee, by\nthe trust instrument do not defeat that intent.\nThe business relationship underlying this case began in 1977 when respondents\nMichael Morrison and others loaned substantial funds to a corporation, in which Doyle and\nhis brother claimed to be the only shareholders. Doyle personally guaranteed the loans, but\nlater defaulted on the guarantee. Respondents commenced suit against Doyle and his brother\nin 1979, alleging breach of contract; they received a judgment against Doyle in 1993 in the\namount of $55,954.19 After various other attempts to enforce the judgment, in 1996\nrespondents sought a preliminary order of attachment of certain trust assets, for which\nDoyle was both the trustee and the beneficiary, and a temporary restraining order to prevent\nDoyle transferring any of the trust assets. The Morrisons alleged that Doyle had fraudulently\ntransferred money and property from the trust to defraud the respondents. The trial court\ngranted the Morrisons\' motion for an order of attachment, stating that \xe2\x80\x9c[d]ue to\nextraordinary circumstances, claimant\'s interests cannot be protected pending hearing by an\nappropriate order of the court other than by directing a pre-hearing seizure of property.\xe2\x80\x9d\nAfter a hearing on the issue, the trial court concluded that the trust at issue was not a\n142\n\n\x0cspendthrift trust and was therefore subject to attachment by Doyle\'s creditors. The trial\ncourt also found that the underlying claim against Doyle sounded in contract, but was\npremised on Doyle\'s having committed an intentional fraud against the Morrisons, thereby\nproviding a basis for the attachment under Minn. Stat. \xc2\xa7 570.02, subd. 1(4) (1996). Pursuant\nto these findings, the trial court granted the Morrisons\' application for attachment and a\ntemporary restraining order.\nDoyle appealed to the court of appeals and it affirmed the judgment of the trial\ncourt, concluding that the trust was not an implied spendthrift trust because \xe2\x80\x9cDoyle, as\ntrustee, * * * has the discretion to distribute both the income and the principal of the trust to\nhimself as he sees fit.\xe2\x80\x9d Morrison v. Doyle, 570 N.W.2d 692, 697 (Minn. App., 1997). The court\nof appeals further held that there is ample evidence in the record to support the trial court\nfinding that Doyle \xe2\x80\x9cassigned, secreted and disposed of non-exempt property with intent to\ndelay and defraud his creditors, the Morrisons,\xe2\x80\x9d and that Doyle committed an intentional\nfraud against the Morrisons. Id. at 699. The court of appeals relied upon these findings of\nfact as the basis justifying the issuance of the order of attachment to provide security for\nsatisfaction of the Morrisons\' judgment against Doyle. Id. at 699-700.\nThe facts regarding the creation of the trust at issue here are undisputed. Veronica\nDoyle, mother of appellant Doyle, died on February 12, 1988, and in her will she left onesixth of her residual estate to her daughter-in law, Lois Doyle, Doyle\'s wife. Veronica Doyle\nstated in the will that she intentionally did not provide for her son as she had otherwise\nprovided for him in her lifetime. Lois Doyle died on May 14, 1988, and left a will in which\nshe devised the residue and remainder of her estate into a trust that she had previously\ncreated on January 5, 1988. The probate court found that Lois Doyle\'s will was a \xe2\x80\x9cpourover\xe2\x80\x9d will. Therefore, the money inherited by Lois Doyle from Veronica Doyle was\ntransferred into the trust at issue in this case.\nThe trust instrument itself named Lois Doyle as both the grantor and the trustee;\nDoyle was designated as \xe2\x80\x9cattorney-in-fact\xe2\x80\x9d and given the power to act for Lois Doyle for\npurposes of the trust agreement only. He was also named as the primary beneficiary. Doyle\'s\nfour children were named as residual beneficiaries. Upon Lois Doyle\'s death, all of the\nbeneficiaries of the trust signed a consent agreement and stipulation appointing Doyle as the\nsuccessor trustee to the trust. This stipulation stated that \xe2\x80\x9cit was the intent of Lois M. Doyle,\nand all of the [beneficiaries] that upon Lois M. Doyle\'s death that William G. Doyle would\n143\n\n\x0csucceed her as Trustee of the Trust;\xe2\x80\x9d it was approved by the district court. Therefore, Doyle\nbecame both the primary beneficiary and the trustee of the Lois Doyle trust.\nThe trust instrument did not contain a specific \xe2\x80\x9cspendthrift clause,\xe2\x80\x9d but did contain\nthe following provisions, which have a bearing on today\'s decision:\n3. The trust shall continue upon the death of the Grantor for the benefit of\nWILLIAM DOYLE lasting his lifetime. The trustee shall pay the income and\nsuch amounts of the principal as the Trustee in its discretion may determine\nfor the beneficiary\'s education, support, health, and maintenance.\n******\n6. Early Termination of the Trust. If at any time the principal of the Trust\nshould fall to a value which would make the Trust uneconomical in the\nopinion of the Trustee, the Trustee may in its sole discretion terminate the\nTrust and pay over the remaining principal and income to the Grantor if he\nis living (and in such event the Trustee will notify the other beneficiaries of\nthe Trust\'s early termination), and if not living, then to, or for the benefit of,\nany one or more of the income beneficiaries designated in Article 3 above,\nor, if there are none such to take, as provided in Article 4 above.\n7. Powers and Duties of Trustee. The Trustee shall have the full power,\nsubject to direction of Grantor, and without prior authority from any court\nto do everything necessary for the proper administration of this trust.\n******\n12. Payment to Beneficiaries. The Trustee may make any payments of\nincome or principal directed to be made to any beneficiary under any\nprovision of this Agreement, including any distribution on termination, or\nresignation.\n1. by paying the same directly to any beneficiary or to his spouse,\nparent,\n\nadult\n\nsibling,\n\nlegally\n\nappointed\n\nguardian,\n\ncommittee,\n\nconservator, or custodian, or\n2. by depositing same in any savings account in the name of any of the\nbeneficiaries, whether alone or in joint names including any person\ndesignated by the Grantor in accordance with the provisions of Article\n11.\n144\n\n\x0cand upon making any such payment or deposit the Trustee shall have\nno further responsibility with respect to the same or to the application\nor disposition of the moneys so deposited.\nIn order to resolve this matter, we must determine whether the language of this trust\ndocument and the manner in which it was implemented require its designation as a\n\xe2\x80\x9cspendthrift trust,\xe2\x80\x9d replete with all of the legal protections afforded to the beneficiary of\nsuch a trust.\nThe underlying legal principles are not novel. A spendthrift trust is a trust in which\nthe power of alienation has been suspended. In re Moulton\xe2\x80\x99s Estate, 233 Minn. 286, 290, 46\nN.W.2d 667, 670 (1951). The validity of a spendthrift trust is upheld on the theory that the\nowner of property, in the free exercise of his will in disposing of it, may secure such benefits\nto the objects of his bounty as he sees fit and may, if he so desires, limit its benefits to\npersons of his choice, who part with nothing in return, to the exclusion of creditors and\nothers. Id. Minn. at 290-91, 46 N.W.2d at 670 (citations omitted).\nGenerally, to create a spendthrift trust, the trust agreement must simply include a\nspendthrift clause. See, e.g., In re Trust Created Under Agreement with McLaughlin, 361 N.W.2d 43,\n45 (Minn. 1985). The following is an example of a spendthrift clause:\nNeither principal nor income of any trust nor any beneficiary\'s interest\ntherein, while undistributed in fact, shall be subject to alienation, assignment,\nencumbrance, appointment or anticipation by the beneficiary, nor to\ngarnishment, attachment, execution or bankruptcy proceedings, nor to claims\nfor alimony or support or any other claims of any creditor or other person\nagainst the beneficiary, nor to any other transfer, voluntary or involuntary,\nfrom the beneficiary.\nId. However, we have also provided the asset protections afforded in a spendthrift trust\nwhen the trust agreement did not include an express spendthrift provision. See Moulton\xe2\x80\x99s\nEstate, 233 Minn. at 302-03, 46 N.W.2d at 675-76; see also First Nat\xe2\x80\x99l Bank of Canby v. Olufson,\n181 Minn. 289, 291, 232 N.w. 337, 338 (1930). \xe2\x80\x9cNo particular form of words is necessary to\ncreate a spendthrift trust. It is sufficient if by the terms of the trust the settlor manifests an\nintention to impose the restrictions common to such trust.\xe2\x80\x9d Moulton\xe2\x80\x99s Estate, 233 Minn. at\n291, 46 N.W.2d at 670.\nIn cases such as this one, where the trust agreement does not contain a specific\n145\n\n\x0cspendthrift clause, we look to the settlor\'s intent as evidenced by the language used in the\ntrust agreement. Id., 233 Minn. at 295, 46 N.W.2d at 672. In that determination we are to be\nguided by the well-known principle that the entire instrument must be considered, aided by\nthe surrounding circumstances, due weight being given to all its language, with some\nmeaning being given, if possible, to all parts, expressions and words used, discarding and\ndisregarding no parts as meaningless, if any meaning can be given them consistently with the\nrest of the instrument. In re Watland, 211 Minn. 84, 91, 300 N.W. 195, 198 (1941) (quotation\nomitted).\nWhat indications of the settlor\'s intent are present in this case? We may begin with\nthe death of Doyle\'s mother and her decision to disinherit her son William, apparently in\norder to protect him from his creditors. The record here includes deposition testimony of\nWilliam Seltz, who prepared Veronica Doyle\'s will, to the effect that she intended for her\nestate to be equally divided between all six of her children, but that she wanted to protect\nDoyle\'s share from his creditors. Therefore, according to Seltz, she asked him to structure\nher will so that William\'s \xe2\x80\x9cshare\xe2\x80\x9d passed instead to his wife. It is primarily this one-sixth\nportion of Doyle\'s mother\'s estate that became the corpus of the trust at issue here.\nNext, we may look to the language of the trust document itself, because the settlor\'s\nintent can be determined by looking to the restrictions placed upon the trustee as to\ndistribution of income and principal to the beneficiaries of the trust. See Moulton\xe2\x80\x99s Estate, 233\nMinn. at 291, 46 N.W.2d at 670 (stating that intent can be inferred by looking to the terms of\nthe trust to determine whether the settlor imposed the restrictions common to such trust).\nHere the settlor provided that the trustee \xe2\x80\x9cshall pay the income and such amounts of the\nprincipal as the Trustee in its discretion may determine for the beneficiary\'s education,\nsupport, health, and maintenance.\xe2\x80\x9d While many spendthrift trusts contain more explicit\nlimitations, we conclude that these restrictions represent the kind of ascertainable standards\nthat are sufficient to guide the actions of the beneficiary and against which his conduct can\nbe measured. Furthermore, the specific language at issue has been, since the time the trust\nwas created, actually mirrored in the legislative scheme that governs distribution of trust\nassets:\nNo trustee may exercise or participate in the exercise of * * * any power of\nthe trustee to make discretionary distributions of either principal or income\nto or for the benefit of the trustee as beneficiary, unless by the terms of the\n146\n\n\x0cwill or other written instrument those discretionary distributions are limited\nby an ascertainable standard relating to that trustee\'s health, education,\nmaintenance, or support * * *.\nMinn. Stat. \xc2\xa7 501B.14, subd. 1 (1996). The trust language also tracks the Internal Revenue\nService\'s statutory provisions on the creation of ascertainable standards that limit\ndistribution of trust assets. See I.R.C. \xc2\xa7 2041(b)(1)(A) (1994).\nWe also conclude that the type of language used in the trust document at issue here\nis consistent with language to which we have attached significant meaning in our older trust\ncases. See In re Tuthill\xe2\x80\x99s Will, 247 Minn. 122, 76 N.W.2d 499 (1956); see also McNiff v. Olmsted\nCounty Welfare Dep\xe2\x80\x99t. 287 Minn. 40, 176 N.W.2d 888 (1970). Thus, based upon the past cases\nthat direct us to act on the manifest intent of the settlor, we hold that the trust at issue here\nis a spendthrift trust, thus defeating the claims of the Morrisons to attach the trust assets.\nFurther, although we disagree with the conclusions of the lower courts, we are not\nunmindful of the concerns they raise. The trial court and the court of appeals relied on three\nbases to conclude that the trust at issue here is not a spendthrift trust: (1) that there was a\nmerger of Doyle\'s legal interest as trustee and his beneficial interest; (2) that Doyle, as\ntrustee, had the authority to distribute both income and amounts from the principal at his\ndiscretion pursuant to Paragraph 3 of the trust agreement, and that Doyle may have\ndistributed trust funds in violation of the trust agreement; and (3) that Doyle, as trustee, has\nthe authority to terminate the trust pursuant to Paragraph 6 of the trust agreement. See Doyle,\n570 N.W. 2d at 697-98. In addition, the Morrisons rely heavily on their assertions that Doyle,\nas trustee, has violated the terms of the trust agreement by distributing trust monies to\nhimself and the other beneficiaries and by attempting to conceal the fact that he has received\nmoney from the trust.\nHowever, none of these bases defeats the critical provisions of the trust that make it\na spendthrift trust. First, there is no merger of Doyle\'s legal and beneficial interests simply\nbecause he is both the trustee and the primary beneficiary of the trust. The Minnesota\nlegislature has spoken to this issue: \xe2\x80\x9cNo trust is invalid or terminated, and title to trust assets\nis not merged, because the trustee or trustees are the same person or persons as the\nbeneficiaries of the trust.\xe2\x80\x9d Minn. Stat. \xc2\xa7 501B.13, subd. 1 (1996). And we assume that if the\ntrust is not made utterly invalid by virtue of the trustee and the beneficiary being the same\nperson, its \xe2\x80\x9cspendthrift\xe2\x80\x9d characteristics are not defeated either.\n147\n\n\x0cFurther, the Restatement (Second) of Trusts \xc2\xa7 99 discusses the ramifications of\nhaving a primary beneficiary also act as the trustee of a trust. It states:\nThere can be a trust in which one of several beneficiaries is the sole trustee.\nThe trustee holds the legal title to the trust property, and the beneficiaries,\nincluding the beneficiary who is also the trustee, have equitable interests the\nextent of which is determined by the terms of the trust. There is no partial\nmerger of the legal interest and the equitable interest. The beneficiary who is also\ntrustee does not hold any part of the property free of trust. A creditor of this\nbeneficiary can reach his interest only by a proceeding appropriate for\nreaching an equitable interest, and, if it is a spendthrift trust, a creditor cannot reach\nhis interest.\nRestatement (Second) of Trusts \xc2\xa7199 cmt. (2) (1959) (emphasis added). Thus, we attach no\nspecial importance to the fact that Doyle has been both trustee and primary beneficiary.\nSecond, although Doyle can make distributions from both the income and the\nprincipal of the trust, as noted above, the trust agreement does provide limitations on the\npurposes for which distributions from both income and principal can be made. Article 3 of\nthe trust agreement limits distribution to the purposes of \xe2\x80\x9ceducation, support, health, and\nmaintenance.\xe2\x80\x9d Therefore, there are limits to Doyle\'s power of distribution, contrary to the\ncourt of appeals\' conclusion that Doyle \xe2\x80\x9chas the discretion to distribute both the income and\nthe principal of the trust to himself as he sees fit.\xe2\x80\x9d Doyle, 570 N.W.2d at 697 (emphasis added).\nSimilarly, the power to terminate the trust is not determinative because article 6 of the trust\nagreement limits that power to the occasion when the trust is uneconomical. Therefore,\nDoyle as trustee does not have unlimited authority.\nFinally, the alleged improper actions of Doyle as trustee are irrelevant to the question\nof whether the trust is a spendthrift trust. There are five different ways that a court of law\nmay remedy a trustee\'s abuse of discretion, none of which include eliminating the spendthrift\nnature of the trust.\nThe beneficiary of a trust can maintain a suit for one of the following: (a) to compel\nthe trustee to perform his duties as trustee; (b) to enjoin the trustee from committing a\nbreach of trust; (c) to compel the trustee to redress a breach of trust; (d) to appoint a\nreceiver to take possession of the trust property and administer the trust; [or] (e) to remove\nthe trustee. Restatement (Second) of Trusts \xc2\xa7 199. While it is true that these remedies are\n148\n\n\x0cgenerally available only to other beneficiaries, and not to third-party creditors, that is\nprecisely the point of the creation of a spendthrift trust: the assets contained within it are not\navailable to persons outside the trust relationship. Given these basic concepts of trust law,\nwe conclude that it would be inappropriate to allow Doyle\'s judgment creditors to gain an\nattachment to the trust simply because Doyle, as trustee, may have abused his discretion in\ndistributing trust funds.\nBecause we conclude that Lois Doyle, the settlor of the trust at issue, intended to\ncreate a spendthrift trust, we reverse the judgment of the court of appeals and hold that the\ninstant trust is an implied spendthrift trust and, for that reason, the Morrisons cannot obtain\nan attachment to the trust.\nReversed.\nNOTE\nA person cannot shield his assets from creditors by placing them in a trust for his\nown benefit. Thus, the law gives creditors recourse against the entire interest in a self-settled\ntrust. Thus, protection from creditors is available only to a recipient of inherited wealth, not\na person who creates a self-settled trust using earned money. This rule has been codified in\nthe majority of jurisdiction. For example, a California statute provides: \xe2\x80\x9c(a) If the settlor is a\nbeneficiary of a trust created by the settlor and the settlor\'s interest is subject to a provision\nrestraining the voluntary or involuntary transfer of the settlor\'s interest, the restraint is\ninvalid against transferees or creditors of the settlor. The invalidity of the restraint on\ntransfer does not affect the validity of the trust.\xe2\x80\x9d Cal. Probate Code \xc2\xa715304.\n\n5.3\n\nCreditors\nBrian is the beneficiary of a spendthrift trust. Brian takes his American Express card\n\nto the mall and goes on a shopping spree to the tune of $80,000. If Brian does not pay his\ncredit card bill, American Express cannot reach any of the money in the trust fund.\nAmerican Express is considered to be a voluntary creditor because the company gave Brian a\ncredit card. Nonetheless, a person who furnishes necessary services or support to the\nbeneficiary can reach the beneficiary\xe2\x80\x99s interest in a spendthrift trust. This exception applies\nto people like doctors and grocers. In the majority of jurisdictions, involuntary creditors like\nspouses and children are permitted to attach spendthrift trust funds to satisfy the\nbeneficiary\xe2\x80\x99s alimony and child support obligations. Nonetheless, tort victims who are\n149\n\n\x0cinvoluntary creditors are precluded from receiving money from a spendthrift trust\n\nChild Support-Drevenik v. Nardone, 862 A.2d 635\nOPINION BY POPOVICH, J.:\n\xc2\xb6 1 Appellant Dominick Nardone, Jr., trustee for John Nardone, his brother, appeals\nthe order entered on April 12, 2004, in the Court of Common Pleas of Luzerne County, that\ndirected Appellant to pay Mr. Nardone\'s child support arrears from the principal and income\nof the spendthrift trust established for Mr. Nardone\'s benefit by their mother\'s will. Upon\nreview, we affirm.\n\xc2\xb6 2 The relevant facts and procedural history of this case are set forth in the trial\ncourt\'s opinion of June 14, 2004, as follows:\nThis matter originated on February 12, 1996, when the [c]omplainant, [Appellee]\nNicole Drevenik, filed a civil [c]omplaint for support against [Mr. Nardone] for the support\nof their two children, Joseph Drevenik, born September 18, 1986, and Jason Drevenik, born\nNovember 29, 1987. After a support conference and [hearing] before a [master in support],\nan [o]rder was entered for the support of the minor children on August 15, 1997, in the\namount of $200.00 per month. Later modification petitions reduced this amount by [o]rder\nof March 16, 2000, to $140.00 per month in support and $20.00 per month on arrears.\nSubsequently, because [Mr. Nardone] did not pay any child support for more than a\nyear, a petition was filed to show cause why the assets of a trust held for [Mr. Nardone]\nshould not be used for support payments of his children. On March 3, 2004, Mr. Nardone\nappeared before [the trial court] owing child support in an amount just over $2,411.00. Mr.\nNardone acknowledged that he owed child support, that he wished to pay off this amount,\nand was willing to cooperate with the Commonwealth to the fullest extent. Counsel for\n[Appellant] explained that a [s]pendthrift [t]rust, of which [Mr. Nardone is the beneficiary]\nwas at the heart of the problem. Inez L. Nardone, [Mr. Nardone\'s mother (decedent) ], died\non April 20, 2002, in Luzerne County. By her [l]ast [w]ill and [t]estament, she left fifty\npercent of her net estate to [Appellant] and fifty percent to [Appellant] in trust for [Mr.\nNardone]. Item III of decedent\'s will states in part:\n[...] I give, devise, and bequeath my entire estate, whether real, personal, or mixed, of\nevery kind, nature, and description whatsoever and wherever situated, as follows:\n***\nB. Fifty (50%) percent to my son, [Appellant], in trust for my son,\n150\n\n\x0c[Mr. Nardone]. [Appellant] shall serve without bond. [Appellant] shall\nhave total control over this [t]rust and apply such amount of income\nand principal as he, in his sole discretion, deems proper for the\nsupport, education, and welfare of my son, [Mr. Nardone]. I direct\nthat this sum be invested safely and wisely in the sole discretion of\n[Appellant]. I further direct that my son, [Mr. Nardone] shall have no\nright to withdraw any funds from this trust.\nAlthough the complete and total amount of the trust assets [has not been calculated\nand is, therefore, unknown], records from the Luzerne County Recorder of Deeds Office\nindicate that on August 19, 2000, [decedent\'s] home was sold for $94,900.00. Therefore,\napproximately half of this amount was placed in trust for [Mr. Nardone].\nBy order of April 12, 2004, [the trial court] found Mr. Nardone] in arrears of his\nchild support obligation in the amount of $2,456.34. [Appellant] was directed to make\nimmediate payment of all arrearages and to make continuing monthly payments of $140.00\nby the 28th of each month. Furthermore, [Appellant] was ordered to provide a complete\naccount of the assets and expenditures of the trust held by [Appellant] on behalf of [Mr.\nNardone].\n\xc2\xb6 3 Appellant filed a timely notice of appeal from the trial court\'s April 12, 2004\norder. Thereafter, Appellant filed an ordered statement of matters complained of on appeal.\nThe trial court did not file a corresponding opinion after Appellant filed his statement of\nmatters, but it did so upon the direction of this Court. See Drevenik v. Nardone, 644 MDA\n2004 (Pa.Super. filed 6/16/2004) (unpublished order).\n\xc2\xb6 4 The sole issue Appellant present for our review is whether the principal of a trust\nmay be invaded by a trial court in order to satisfy outstanding child support arrears.\n\xc2\xb6 5 Our review of Appellant\'s issue is governed by the following standard: In our\nappellate review of child support matters, we use an abuse of discretion standard. A support\norder will not be disturbed on appeal unless the trial court failed to consider properly the\nrequirements of the Rules of Civil Procedure [g]overning [a]ctions for [s]upport ...or abused\nits discretion in applying these Rules. An abuse of discretion is not merely an error of\njudgment, but if in reaching a conclusion the law is overridden or misapplied, or the\njudgment exercised is manifestly unreasonable, or the result of partiality, prejudice, bias or\nill-will ... discretion is abused. This is a limited role and, absent a clear abuse of discretion,\n151\n\n\x0cthe appellate court will defer to the order of the trial court. A finding of abuse is not lightly\nmade but only upon a showing of clear and convincing evidence. Dennis v. Whitney, 844 A.2d\n1267, 1269 (Pa.Super 2004) (citations omitted).\n\xc2\xb6 6 Appellant contends that the trial court abused its discretion when it ordered that\nthe trust\'s principal and income be invaded to pay Mr. Nardone\'s child support arrears\nbecause the Pennsylvania Supreme Court\'s holdings in Humphreys v. DeRoss, 567 Pa. 614, 790\nA.2d 281 (2002), and Maher v. Maher, 575 Pa. 181, 835 A.2d 1281 (2003), instruct that trust\nprincipal cannot be utilized as \xe2\x80\x9cincome\xe2\x80\x9d for support purposes. We disagree.\n\xc2\xb6 7 It is clear that the holdings of Humphreys and Maher are inapplicable to the present\ncase. Humphreys and Maher held that the corpus of an inheritance could not be included as\n\xe2\x80\x9cincome\xe2\x80\x9d by the trial court when it calculates a support obligation pursuant to the Support\nGuidelines. Humphreys, at 624, 790 A.2d 287-288 see also . Maher, 575 at 189-90, 835 A.2d at\n1286-87. In the present case, as noted by the trial court, Appellee is not seeking a greater\nsupport award or a re-calculation of Mr. Nardone\'s income in light of his trust assets. Rather,\nAppellee seeks payment of accrued support arrears. Accordingly, neither Humphreys nor\nMaher offer guidance in this case. Therefore, Appellant\'s argument fails.\n\xc2\xb6 8 We acknowledge that the corpus of the inheritance in question is in the nature of\na spendthrift trust, and, as such, the assets of the trust are insulated from incursions by\ncreditors until such time those assets are delivered into the hands of the beneficiary, in this\ncase, Mr. Nardone. 10 Summary of Pennsylvania Jurisprudence 2d. Probate, Estates and\nTrusts \xc2\xa7 31:7. Nevertheless, we are satisfied that the trial court did not abuse its discretion\nwhen it ordered Appellant to distribute trust assets to pay Mr. Nardone\'s support arrears.\n\xc2\xb6 9 Reference to the testamentary language indicates that the spendthrift trust was\nestablished for the \xe2\x80\x9csupport, welfare, and education\xe2\x80\x9d of Mr. Nardone. Clearly, the idea of\nproviding support in the spendthrift trust, i.e., payment of daily living expenses, includes all\nreasonable living expenses that one would occur in the course of daily living, such as those\ninvolved in rearing children. Of course, children in our society can never be characterized as\nan \xe2\x80\x9cexpense,\xe2\x80\x9d but the very existence of the Support Guidelines makes it clear that\nparenthood carries with it an obvious economic responsibility to care for a child\'s daily\nneeds, which responsibility is coterminous with the parent\'s need to support himself or\nherself. As such, it becomes clear that the language of the trust permits the use of both trust\nprincipal and income to support Mr. Nardone\'s children, because, if they lived with him,\n152\n\n\x0ctrust assets would be used to meet their daily needs as well. Therefore, we are satisfied that\nthe trial court did not abuse its discretion.\n\xc2\xb6 10 Our reasoning is buttressed by the seminal case of Moorehead\xe2\x80\x99s Estate, 289 Pa.\n542, 137 A. 802 (1927). In Moorehead\xe2\x80\x99s Estate, Gertrude F. Moorehead (Gertrude) filed a\npetition in the Orphans\' Court of Allegheny County seeking support for herself from the\nassets held for her estranged husband, H. Watt Moorehead (Watt), in the spendthrift trust\nestablished by Watt\'s grandmother, Mary Moorehead (the testatrix). Moorehead\xe2\x80\x99s Estate, at 544,\n137 A. at 803. The trial court ruled that the assets should be available for Gertrude\'s support,\nand both parties appealed.\n\xc2\xb6 11 Writing for a unanimous Court, Mr. Justice Frazer opined that, at the time of\nthe writing of the testamentary trust, the testatrix\'s intent was to protect Watt from wasting\nhis income by extravagance and dissipation but not to deliberately enable Watt to avoid the\nresponsibility of support to his family placed on him by the law of this Commonwealth.\nMoorehead\xe2\x80\x99s Estate, at 547-48, 137 A. at 804-05. As support for his conclusion, Mr. Justice\nFrazer noted that the codicil that established the spendthrift trust was authored after Watt\'s\nmarriage to Gertrude and that there was no indication of animosity toward Gertrude by the\ntestatrix evident in her will and codicil or in the record. See Id., at 547-48, 137 A. at 804-05.\nMoreover, even if a technical reading of the language of the spendthrift trust would permit\nWatt from avoiding his responsibilities to his family by virtue of the creation of the\nspendthrift trust, such a result was forbidden by the public policy of this Commonwealth.\nId., at 551, 137 A. at 806. Lastly, Mr. Justice Frazer reasoned that the nature of a support\nobligation was not a \xe2\x80\x9cdebt\xe2\x80\x9d because it was not founded upon a legal contract but, rather, a\nsocietal obligation. Id., at 553, 137 A. at 806. Thus, an instrument that places a testamentary\ngift out of bounds from creditors for the collection of \xe2\x80\x9cdebts\xe2\x80\x9d had no effect to preserve that\nproperty from the incursion of family members seeking payment of a support obligation. See\nId., at 533, 137 A. at 806. Therefore, our Supreme Court affirmed the order of the Orphans\'\nCourt.\n\xc2\xb6 12 We observe that society places an even greater obligation on a parent to support\nhis or her children than on a spouse to support another spouse. Therefore, the rationale of\nMoorehead\xe2\x80\x99s Estate applies with even greater force to the present case. Inasmuch as our\nSupreme Court has concluded that the term \xe2\x80\x9cdebt\xe2\x80\x9d does not encompass support obligations,\nthe spendthrift trust cannot act to shield the assets of the trust from collection by Appellee\n153\n\n\x0cfor the benefit of Mr. Nardone\'s children. Moorehead\xe2\x80\x99s Estate, at 553, 137 A. at 806. Further,\nsimilar to the facts in Moorehead\xe2\x80\x99s Estate, the decedent lived long after the birth of Mr.\nNardone\'s children, and no animosity was evident toward them or their mother, Appellee, in\nthe will that established the spendthrift trust. However, even if it was the decedent\'s intent to\ndeprive her grandchildren of the assets within the trust, the public policy of this\nCommonwealth would forbid such a result. Cf. Moorehead\xe2\x80\x99s Estate, at 551, 137 A. at 806. It is\nalso evident from the record that Mr. Nardone recognizes his responsibility to his children\nand agrees that Appellant should release the assets held in trust for him to them for their\nsupport, which assets would, in any event, be available for the children\'s support were they\nto reside with Mr. Nardone. Accordingly, we are satisfied that the trial court did not abuse its\ndiscretion, and we affirm its order.\n\xc2\xb6 13 Order affirmed.\n\nTort Claim-Duvall v. McGee, 826 A.2d 416\nBELL Chief Judge.\nThe issue presented for resolution by this case is whether a tort judgment may be\nsatisfied by invading the principal of a spendthrift trust held for the benefit of the tortfeasor.\nThe Circuit Court for Anne Arundel County, recognizing that Maryland law only allows\ninvasion of a spendthrift trust by a narrow class of creditors, and, only in limited\ncircumstances, declined to expand the class or the circumstances. It opined that to hold that\ntort judgment creditors are among the class of creditors that have traditionally been allowed\nto invade a spendthrift trust in satisfaction of a judgment, would be to \xe2\x80\x9crewrite\xe2\x80\x9d Maryland\nlaw. Such a revision of Maryland law, it pointed out, is properly addressed by the Maryland\nGeneral Assembly or this Court. We shall affirm the judgment of the Circuit Court.\nI\nJames Calvert McGee (\xe2\x80\x9cMcGee\xe2\x80\x9d), one of the appellees in the case sub judice, was\nconvicted of felony-murder for his participation in a robbery that resulted in the killing of\nKatherine Ryon. Robert Ryon Duvall,the appellant, is the Personal Representative of the\nEstate of Katherine Ryon. He brought suit, in that capacity, in the Circuit Court for Anne\nArundel County against McGee, seeking both compensatory and punitive damages, plus\ncosts of the suit, for the battery of Katherine Ryon and the conversion of her personal\nproperty. The parties settled this action, negotiating and executing an Agreement for Entry\nof Judgment/Partial Release of Claims (\xe2\x80\x9cSettlement Agreement\xe2\x80\x9d), pursuant to which, in\n154\n\n\x0csatisfaction of the conversion count, the parties agreed to the entry of judgment against\nMcGee, and in favor of the appellant, for $100,000.00 in compensatory damages and\n$500,000.00 in punitive damages. The Settlement Agreement acknowledged that McGee is\nthe beneficiary of a trust established by his deceased mother, which, at the time of the\nsettlement, was valued at approximately $877,000.00, exclusive of early withdrawal penalties\nand taxes. Under the terms of the trust, periodic monetary payments are to be made to\nMcGee, and to others on his behalf, by Frank B. Walsh, Jr., the Trustee of the trust (\xe2\x80\x9cthe\nTrustee),\xe2\x80\x9d the other appellee in the case sub judice. Another provision of the trust established\nwhat is commonly referred to as a \xe2\x80\x9cSpendthrift\xe2\x80\x9d Trust. That provision prohibited McGee\nfrom alienating the trust principal (\xe2\x80\x9ccorpus\xe2\x80\x9d) or any portion of the income from the trust\nwhile in the hands of the Trustee, and specifically shielded both the corpus and the income\nfrom claims of McGee\'s creditors. The trust instrument also gives broad discretion to the\nTrustee to terminate the Trust at any time and pay the trust assets and any undistributed\nincome to McGee or to any of the remaindermen to which the trust referred. The Settlement\nAgreement also provided that:\n\xe2\x80\x9cThe [appellant] hereby forever releases, waives, relinquishes and abandons any\nrights he may have to satisfy or have paid any portion of the above-mentioned\njudgment by way of attachment, garnishment or any other post-judgment\ncollection efforts directed against any periodic payments made by the Trustee of\nthe Trust to [McGee] as the beneficiary of the Trust, or directed against any\nperiodic payment made to any other person or entities for the benefit of [McGee].\nThe amount of any periodic payments which are immune to such post judgment\ncollection efforts hereunder shall not exceed the amount of the periodic payment\npreviously made during the preceding three (3) years, exclusive of payments made\nfor legal fees. The parties understand and specifically agree that the Trustee will\ncontinue to pay the legal fees on behalf of [McGee] and such payment of legal fees\nshall be immune to any post-judgment collection efforts as outlined above.\n[McGee] agrees that he shall provide an annual accounting in August of each year\nbeginning in the year 2002 outlining the periodic payments received by him or\nmade to others on his behalf (exclusive of legal fees) during the preceding year.\xe2\x80\x9d\nThus, it prohibited the appellant from attaching or garnishing any of the periodic payments\nthe Trustee made to McGee from the Trust.\n155\n\n\x0cHaving surrendered all rights to attach McGee\'s periodic payment from the Trust,\nbut armed with the judgment entered pursuant to the Settlement Agreement, the appellant\nsought to satisfy the judgment by invading the corpus of the trust. Thus, the appellant served\na Writ of Garnishment on the Trustee. Answering the Writ, the Trustee defended on the\ngrounds that the trust was a spendthrift trust; the Trustee was not indebted to McGee; and\nthe Trustee was not in possession of any property belonging to McGee.\nBoth parties moved for summary judgment. Although acknowledging that this\nCourt, in Smith v. Towers, 69 Md. 77, 14 497 (1888), upheld the validity of spendthrift trusts in\nMaryland and, thus, prohibited their invasion for the payment of debt, the appellant\nmaintained that, over time, this Court has carved out, on public policy grounds, exceptions\nto the spendthrift doctrine, pursuant to which some classes of persons are permitted to\ninvade spendthrift trusts. Noting one of the rationales of the Smith decision-that because\n\xe2\x80\x9c[a]ll deeds and wills and other instruments by which [spendthrift] trusts are created are\nrequired by law to be recorded in the public offices ... creditors have notice of the terms and\nconditions on which the beneficiary is entitled to the income of the property,\xe2\x80\x9d 69 Md. 77, 14\n499 the appellant argued that tort-judgment creditors should be included among those\nexcepted, since such creditors had no opportunity to investigate the credit-worthiness of the\ntortfeasor prior to suffering from the tortious conduct giving rise to the claim. Furthermore,\nthe appellant continued, the public policy of this State dictates that tort-judgment creditors\nbe deemed a special class of creditors entitled to invade a spendthrift trust.\nThe trial court held: \xe2\x80\x9cMaryland law is what governs this case, however, and Maryland\nlaw is clear. A spendthrift trust may not be reached in order to satisfy the judgment in the\ncase sub judice. Although the facts involving the murder of the late Ms. Ryon, and the further\nfacts relating to the beneficiary status of the Defendant McGee, a felony murderer, are very\ntempting, this Court may not rewrite the law; the Maryland Legislature has the responsibility\nof that task, or the Appellate Courts of this State must further interpret the law.... This Court\nhas a responsibility to apply and uphold the laws of the state as its interprets they now exist,\nnot create new law.\xe2\x80\x9d\nThus, the appellant\'s motion for summary judgment was denied and the appellees\'\ncross-motion, granted. The appellant noted a timely appeal to the Court of Special Appeals.\nThis Court, on its own initiative, issued the writ of certiorari to address this novel issue of\nMaryland law, prior to any proceedings in the intermediate court. Duvall v. McGee, 369 Md.\n156\n\n\x0c570, 801 A.2d 1031 (2002).\nIn this Court, the appellant argues that the public policy of this State favors a rule\nallowing a tort-judgment creditor\'s claim to be satisfied by invading the corpus of a\nspendthrift trust. He directs our attention to Maryland precedent, reflecting the recognition\nof spendthrift trusts, the rationale for that recognition and the development of exceptions to\nthe spendthrift trust doctrine. More particularly, the appellant relies on Maryland\'s public\npolicy against permitting criminals to benefit financially from their crimes. As to that, he\nrelies on the Maryland statute, known as the \xe2\x80\x9cSon of Sam\xe2\x80\x9d statute, enacted to prevent\ncriminals from profiting from their own crimes through \xe2\x80\x9cnotoriety of crimes contracts,\xe2\x80\x9d\nCurran v. Price, 334 Md. 149, 154, 638 A.2d 93, 96 (1994), and the like, see Md.Code (1957,\n1992 Repl.Vol., 1993 Cum.Supp.), Article 27, \xc2\xa7 854; this Court\'s creation in the common law\nof this State of a \xe2\x80\x9cslayer\'s rule,\xe2\x80\x9d pursuant to which a person who kills another is prohibited\nfrom being tangibly enriched by the death. (citations omitted)\nBy way of rebuttal, the appellees counter that accepting the appellant\'s argument\nwould require and, thus, constitute a change in Maryland law and, in any event, the public\npolicy goals argued by the appellant will not be advanced by allowing garnishment of a\nspendthrift trust by a tort-judgment creditor under the circumstances of the case sub judice.\nAs to the former, the appellees emphasize that the obligations, for the satisfaction of which\nthis Court has allowed invasion of the corpus and income of a spendthrift trust have not\nbeen simple or ordinary contract debt; rather they have been \xe2\x80\x9c... dut [ies], not ... debt.\xe2\x80\x9d Safe\nDeposit & Trust Co. of Baltimore v. Robertson, 192 Md. 653, 662, 65 A.2d 292, 296 (1949). See\nZouk v. Zouk, 204 Md. 285, 298, 104 A.2d 573, 579-80 (1954) (equating a contract for child\nsupport to \xe2\x80\x9cthe decree of a court awarding support to the child or alimony to a wife.\xe2\x80\x9d). With\nrespect to the latter, they argue that the public policy against a criminal benefitting from his\nor her crime is simply inapplicable to the case sub judice. The payments that McGee receives,\nthey maintain, are in no way related to the crime that he committed. As important, the\nappellees point out, those payments are not even involved in the case, the parties, by their\nsettlement agreement, having expressly exempted them from attachment.\nII.\nIn Maryland, it is well settled that \xe2\x80\x9cspend-thrift trusts\xe2\x80\x9d may be created. (citations\nomitted). This Court first recognized the validity of \xe2\x80\x9cspendthrift\xe2\x80\x9d trusts, in Smith v. Towers,\nsupra, concluding that the income from, and corpus of, such trusts are not subject to\n157\n\n\x0cattachment or garnishment in the hands of the trustee. It is useful to review the rationale of\nthat case.\nIn Smith, one of the judgment debtors was beneficiary of a trust, which provided for\nthe trustee to collect the rents and the profits of the real estate that formed its corpus, for\npayment to him, \xe2\x80\x9cinto his own hands, and not into another, whether claiming by his\nauthority or otherwise,\xe2\x80\x9d Id. at 83, 14 A. at 497, and, upon his death, to convey the real estate\nto the beneficiary\'s surviving children. Id. The appellant, having obtained a judgment against\nthe beneficiary of the trust and another, sought to satisfy the judgment by attaching the\nincome from the trust.\nPerceiving that the case presented two issues: whether the testator intended to give\nthe income of the property to his son to the exclusion of his creditors and, if so, whether the\nterms and provisions of the will effected that intention, 69 Md. at 83, 14A. at 497, the Court\nhad little difficulty resolving the first. As to that, we held:\n\xe2\x80\x9cHe not only gives the legal estate to the trustee, but he directs in express terms\nthat he shall pay the income into the hands of his son and not into the hands of\nany other person, whether claiming by his authority, or in any other capacity.\nHere then, is an express provision, that the income shall be paid to his son, and\nan express prohibition against paying it to any other person. If the income in the\nhands of the trustee is liable to the claims of creditors, the trustee it is plain could\nnot carry out the trust. So construing this will as we do, and it is not we think\nsusceptible of any other construction, the testator meant beyond all question that\nthe income should be paid into the hands of his son, to the the [sic] exclusion of\nall other persons, whether claiming as alienees or as creditors.\xe2\x80\x9d\nId. at 84, 14 A. 497.\nTurning to the next issue, we acknowledged that the English decisions and, indeed,\nthose of a majority of the States deciding the issue, held that a necessary incident to the\nholding of an equitable estate, or an interest for life, was the right of alienation by the\nbeneficiary, with the result that, without regard to provisions by way of limitation or\notherwise, such estates are \xe2\x80\x9cliable for the payment of [the beneficiary\'s] debts.\xe2\x80\x9d Id. This\nCourt rejected the two grounds on which those decisions rested, i.e., \xe2\x80\x9cthat the right of\nalienation is a necessary incident to an equitable estate for life, and any restraint upon this\nright is against the policy of the law which favors the ready alienation of property; and ... that\n158\n\n\x0cpublic policy forbids that one should have the right to enjoy the income of property, to the\nexclusion of his creditors,\xe2\x80\x9d Id. at 84, 14 A. 498. and, concluding that \xe2\x80\x9cthe gift of an equitable\nright to the income from property for the life of the beneficiary, to the exclusion of his\nalienee,\xe2\x80\x9d Id. at 84, 14 A. 499, is neither a restraint on the right of alienation nor against public\npolicy, reached the opposite result.\nOur reasoning is instructive on the issue sub judice. Acknowledging the rule favoring\nthe free and ready alienation of property and that \xe2\x80\x9cthe right to sell and dispose of property ...\nis a necessary incident of course to the absolute ownership of ... property,\xe2\x80\x9d Id. at 84, 14 A.\n498, we pointed out that \xe2\x80\x9cthe reasons on which the rule is founded do not apply to the\ntransfer of property in trust,\xe2\x80\x9d Id. at 84, 14 A. 499, and that \xe2\x80\x9c[t]he law does not ... forbid all\nand any restraints on the right to dispose of [trust property], but only such restraints as may\nbe deemed against the best interests of the community.\xe2\x80\x9d Id. at 84, 14 A. 499. With regard to\nthe policy issue, we said:\n\xe2\x80\x9cNow common honesty requires, of course, that every one should pay his debts,\nand the policy of the law for centuries has been to subject the property of a\ndebtor of every kind which he holds in his own right, to the payment of his\ndebts. He has as owner of such property the right to dispose of it as he pleases,\nand his interest is, therefore, liable for the payment of his debts. But a cestui que\ntrust does not hold the estate or interest in his own right; he has but an equitable\nand qualified right to the property or to its income, to be held and enjoyed by the\nbeneficiary on certain terms and conditions prescribed by the founder of the\ntrust. The legal title is in the trustee, and the cestui que trust derives his title to the\nincome through the instrument by which the trust is created. The donor or\ndevisor, as the absolute owner of the property, has the right to prescribe the\nterms on which his bounty shall be enjoyed, unless such terms be repugnant to\nthe law. And it is no answer to say that the gift of an equitable right to income to\nthe exclusion of creditors is against the policy of the law. This is begging the\nquestion. Why is it against the policy of the law? What sound principle does it\nviolate? The creditors of the beneficiary have no right to complain, because the\nfounder of the trust did not give his bounty to them. And if so, what grounds\nhave they to complain because he has seen proper to give it in trust to be\nreceived by the trustee and to be paid to another, and not to be liable while in the\n159\n\n\x0chands of the trustee to the creditors of the cestui que trust. All deeds and wills and\nother instruments by which such trusts are created, are required by law to be\nrecorded in the public offices, and creditors have notice of the terms and\nconditions on which the beneficiary is entitled to the income of the property.\nThey know that the founder of the trust has declared that this income shall be\npaid to the object of his bounty to the exclusion of creditors, and if under such\ncircumstances they see proper to give credit to one who has but an equitable and\nqualified right to the enjoyment of property, they do so with their eyes open. It\ncannot be said that credit was given upon such a qualified right to the enjoyment\nof the income of property, or that creditors have been deceived or mislead; and if\nthe beneficiary is dishonest enough not to apply the income when received by\nhim to the payment of his debts, creditors have no right to complain because\nthey cannot subject it in the hands of the trustee to the payment of their claims,\nagainst the express terms of the trust.\xe2\x80\x9d\nId. at 88-89, 14 A. 499-500.\nThe appellant relies on that portion of the Court\'s reasoning that indicates that the\ncontract creditors are on notice, at least constructively, of the terms of the spendthrift trust\nprior to extending credit, along with the fact that this Court, on public policy grounds, has\nexempted certain obligations of the beneficiary of a spendthrift trust from the rule against\nattachment or garnishment of the corpus or of the income in the hands of the trustee. He\nalso takes comfort from the position that treatise writers take with respect to the right of tort\njudgment creditors to satisfy their judgments from a spendthrift trust; they agree with him\nthat it should be permitted.\nIn Scott on Trusts, Fourth Edition, \xc2\xa7 157.5, while acknowledging the paucity of\nauthority on the subject, it is stated:\n\xe2\x80\x9cIn many of the cases in which it has been held that by the terms of the trust\nthe interest of a beneficiary may be put beyond the reach of his creditors, the\ncourts have laid some stress on the fact that the creditors had only\nthemselves to blame for extending credit to a person whose interest under\nthe trust had been put beyond their reach. The courts have said that before\nextending credit they could have ascertained the extent and character of the\ndebtor\'s resources. Certainly, the situation of a tort creditor is quite different\n160\n\n\x0cfrom that of a contract creditor. A man who is about to be knocked down by\nan automobile has no opportunity to investigate the credit of the driver of\nthe automobile and has no opportunity to avoid being injured no matter\nwhat the resources of the driver may be. It may be argued that the settlor can\nproperly impose such restrictions as he chooses on the property that he\ngives. But surely he cannot impose restrictions that are against public policy.\nIt is true that the tortfeasor may have no other property than that which is\ngiven him under the trust, and that the victim of the tort is no worse off\nwhere the tortfeasor has property that cannot be reached than he would be if\nthe tortfeasor had no property at all. Nevertheless, there seems to be\nsomething rather shocking in the notion that a man should be allowed to\ncontinue in the enjoyment of property without satisfying the claims of\npersons whom he has injured. It may well be held that it is against public\npolicy to permit the beneficiary of a spendthrift trust to enjoy an income\nunder the trust without discharging his tort liabilities to others.\n\xe2\x80\x9cThere is little authority on the question whether the interest of the\nbeneficiary of a spendthrift trust can be reached by persons against whom he\nhas committed a tort. In the absence of authority it was felt by those who\nwere responsible for the preparation of the Restatement of Trusts that no\ncategorical statement could be made on the question. It is believed, however,\nthat there is a tendency to recognize that the language of the earlier cases to\nthe effect that no creditor can reach the interest of a beneficiary of a\nspendthrift trust is too broad, and that in view of the cases that have been\ncited in the previous sections allowing various classes of claimants to reach\nthe interest of the beneficiary, the courts may well come to hold that the\nsettlor cannot put the interest of the beneficiary beyond the reach of those to\nwhom he has incurred liabilities in tort.\xe2\x80\x9d\nBogert on Trusts and Trustees, Second Edition, Rev\xe2\x80\x99d \xc2\xa7 224, p. 478 to like effect:\n\xe2\x80\x9c[A] person who has a claim for damages against a spendthrift trust\nbeneficiary, based on the commission of a tort or other wrongful act (not\nincluding a mere breach of contract) should be allowed to secure satisfaction\nfrom the interest of the beneficiary, apparently on the ground that the\n161\n\n\x0ccontrary result would be against public policy. It is true that a tort creditor\nhas no chance to choose his debtor and cannot be said to have assumed the\nrisk of the collectability of his claim. The argument for the validity of\nspendthrift trusts, based on the notice to the business world of the limited\ninterest of the beneficiary does not apply. It may be argued that the\nbeneficiary should not be permitted to circumvent the case and statute law as\nto liability for wrongs by taking advantage of the spendthrift clause.\xe2\x80\x9d\nA similar sentiment is expressed in Comment a to \xc2\xa7 157 of the Restatement Second\nof Trusts, wherein it is said:\n\xe2\x80\x9cThe interest of the beneficiary of a spendthrift trust ... may be reached in\ncases other than those herein enumerated [alimony, child support, taxes], if\nconsiderations of public policy so require. Thus, it is possible that a person\nwho has a claim in tort against the beneficiary of a spendthrift trust may be\nable to reach his interest under the trust.\xe2\x80\x9d\nNeither the argument advanced by the appellant, nor the support offered for it is persuasive.\nTo be sure, this Court has refused to hold, and on public policy grounds, spendthrift\ntrusts inviolate against indebtedness for alimony arrearages, Safe Deposit & Trust Co.,\nRobertson, supra. 192 Md. at 662-63, 65 A.2d at 296, and for child support. Zouck v. Zouck,\nsupra. 204 Md. at 299, 104 A.2d at 579. Earlier, the United States District Court for the\nDistrict of Maryland had reached the same result, permitting a spendthrift trust to be\nattached for the payment of United States income taxes. Mercantile Trust Co. v. Hofferbert, 58\nF.Supp. 701, 705 (D.Md. 1944). Although decided on policy grounds, see, Article III, Section\n38 of the Maryland Construction (providing that no person shall be imprisoned for failure to\npay a debt, but expressly excluding from the definition of debt valid court decrees for the\npayment of support or alimony); Robertson, supra. 192 Md. at 663, 65 A.2d at 296 (\xe2\x80\x9cWe rest\nour decision upon grounds of public policy, not upon any interpretation of the instruments\nin question, which are not broad enough to authorize payments by the trustee for the benefit\nof a divorced wife.\xe2\x80\x9d; Zouck, supra. 204 Md. at 299, 104 A.2d at 579 (noting that \xe2\x80\x9ca contract by\na father to support a child, found by a court to be fair and reasonable, and so, judicially\ndecreed to be enforced, is the equivalent of the decree of a court awarding support to the\nchild or alimony to a wife, and as such, comes within the rule of public policy announced\nand followed in the Robertson case\xe2\x80\x9d); Hofferbert, 58 F.Supp. at 705 (observing that the public\n162\n\n\x0cpolicy involved when claims of creditors are pitted against the validity of a spendthrift trust\nis \xe2\x80\x9cquite different\xe2\x80\x9d when the claim is by the government for taxes); none of these cases was\npremised on there having been a lack of notice given to the claimants as to the trust\nbeneficiary\'s limited interest in the trust. Rather, the courts recognized a fundamental\ndifference between these obligations and those of ordinary contract creditors.\nIn Robertson, we, like 1 Scott, Trusts, \xc2\xa7 157.1, recognized, and clearly stated, that the\ndependents of a spendthrift trust beneficiary \xe2\x80\x9c \xe2\x80\x98are not \xe2\x80\x98creditors\' of the beneficiary, and the\nliability of the beneficiary to support them is not a debt.\xe2\x80\x99 \xe2\x80\x9d 192 Md. at 660, 65 A.2d at 295,\nquoting Scott. Scott explained that these dependents, the beneficiary\'s wife and children,\ncould enforce their claim for support against the trust estate, because \xe2\x80\x9cit is against public\npolicy to permit the beneficiary to have the enjoyment of the income from the trust while he\nrefuses to support his dependents whom it is his duty to support, Id. at 661, 65 A.2d at 295,\ntheir claim being \xe2\x80\x9cin quite different position from the ordinary creditors who have\nvoluntarily extended credit.\xe2\x80\x9d Id. Focusing specifically on alimony, at issue in that case, the\nCourt opined:\n\xe2\x80\x9cWe think the view expressed in the Restatement is sound. The reason for\nthe rejection of the common law rule, that a condition restraining alienation\nby the beneficiary is repugnant to the nature of the estate granted, was simply\nthat persons extending credit to the beneficiary on a voluntary basis are\nchargeable with notice of the conditions set forth in the instrument.... This\nreasoning is inapplicable to a claim for alimony which in Maryland at least, is\n\xe2\x80\x98an award made by the court for food, clothing, habitation and other\nnecessaries for the maintenance of the wife....\xe2\x80\x99 The obligation continues\nduring the joint lives of the parties, and is a duty, not a debt.\xe2\x80\x9d\nId. at 662, 65 A.2d at 296 (citations omitted). See, also McCabe v. McCabe, 210 Md. 308, 314,\n123 A.2d 447, 450 (1956). (\xe2\x80\x9cThis Court has held that alimony represents a duty and not a\ndebt.\xe2\x80\x9d); Oles Envelop Corp. v. Oles, 193 Md. 79, 92, 65 A.2d 899, 905 (1949) (\xe2\x80\x9cThe obligation\nto pay alimony in a divorce proceeding is regarded not as a debt, but as a duty growing out\nof the marital relation and resting upon sound public policy.\xe2\x80\x9d). Compare Hitchens v. Safe\nDeposit & Trust Co. of Baltimore, 193 Md. 62, 67, 66 A.2d 97, 99 (1949) (specifically declining\nto apply the rule announced in Robertson to claims for support that were not judiciallydecreed alimony, but arose pursuant to a contractual agreement to pay money).\n163\n\n\x0cSimilarly, in Zouck, the Court drew a distinction between the considerations\nunderlying the balance when the monetary obligation sought to be satisfied is a contract or\nordinary debt and when it is child support. It noted that the monetary claim in that case was\n\xe2\x80\x9cbased, in essence, upon the statutory obligation of the father, declaratory of the common\nlaw, to support his child.\xe2\x80\x9d 204 Md. at 298, 104 A.2d at 579, See Walter v. Gunter, 367 Md. 386,\n398, 788 A.2d 609, 616 (2002) (\xe2\x80\x9cThis Court historically has recognized a distinction between\na standard debt and a legal duty in domestic circumstances, specifically with respect to child\nsupport, and subscribes to the theory that child support is a duty not a debt.\xe2\x80\x9d); Middleton v.\nMiddleton, 329 Md. 627, 629-33, 620 A.2d 1363, 1364-66 (1993) (analyzing the debt/duty\ndistinction with respect to parental child support obligation). Moreover, pointing out that in\nthis case, the father agreed to meet the parental obligation to support his child by the\npayment of $ 25.00 a week, and to this extent, exonerated the child\'s mother from her\nobligation, the Court was emphatic:\n\xe2\x80\x9cThe fact that the father has recognized his obligation and has agreed in\nwriting to meet it in a specified amount, does not change his duty to a debt nor\ndoes it create the relationship of ordinary contract debtor and creditor between\nthe father and the child, or the father and the mother, as the representative of\nor trustee for the child.... His obligation remains the same whether it be\ncalculated and required by original order of **426 court, by voluntary\nagreement, or by voluntary agreement specifically ordered to be performed by\norder of court. Nor is it significant that the mother for some years has met the\nobligation which the father violated, so that the money he promised to pay\nweek by week, would now be paid, under court order, in a lump sum.... The\nfundamental nature of the support looked for by the agreement is not changed\nbecause the husband is now required to pay at one time what he should have\npaid week by week.\xe2\x80\x9d\nZouck, supra. 204 Md. at 298-99, 104 A.2d at 579 (citations omitted). We also made the point\nthat, \xe2\x80\x9c[i]n the case of a child, the obligation of the father to support, imposed by law, cannot\nbe bargained away or waived.\xe2\x80\x9d Id. The Court concluded, \xe2\x80\x9cthe agreement by a parent to\nsupport a child, declared to be reasonable and proper, and so, enforceable by a court,\nconstitutes an obligation which justifies the invasion of a spendthrift trust for its fulfillment.\xe2\x80\x9d\nId. at 300, 104 A.2d at 580.\n164\n\n\x0cSimilarly, the obligation to pay taxes and, thus, tax arrearages, is not to be considered\ndebt, nor is the government to be viewed as a mere creditor. Addressing and resolving this\nvery point, the Hofferbert court distinguished the public policy underlying the tax obligation\nand that underlying ordinary or contract debts:\n\xe2\x80\x9cThe reasons which have actuated some courts, as in Maryland, to uphold\nspendthrift trust against the claims of a creditors do not necessarily apply to\ntax claims of the government either federal or State. The public policy\ninvolved is quite different. In the one case the donor of the property has the\nright to protect the beneficiary against his own voluntary improvident or\nfinancial misfortune; but in the other the public interest is directly affected with respect\nto collection of taxes for the support of the government. The imposition of the tax\nburden is not voluntary by the beneficiary.\xe2\x80\x9d\nHofferbert, supra. 58 F.Supp. at 706 (emphasis added).\nMs. Ryon\'s estate is a mere judgment creditor of McGee, the beneficiary. The Trust\nsimply has no legal duty to Ms. Ryon\'s estate and certainly no obligation to provide support.\nThus the rationale underlying the decisions permitting the invasion of a spendthrift trust for\nthe payment of alimony, child support or taxes have absolutely no applicability to the\nobligation in this case. Indeed, to permit the invasion of the Trust to pay the tort judgments\nof the beneficiary, in addition to thwarting the trust donor\'s intent by, in effect, imposing\nliability on the Trust for the wrongful acts of the trust beneficiary, is, as the appellees argue,\nto create an exception for \xe2\x80\x9ctort victims\xe2\x80\x9d or \xe2\x80\x9cvictims of crime.\xe2\x80\x9d\nBy equating, for purposes of determining whether to permit invasion of a spendthrift\ntrust, the tort judgment creditor with the dependents of a trust beneficiary, to whom the\nbeneficiary has a duty of support, or to the government, that is owed a duty to pay taxes, we\nwould create a distinction between debts and creditors and a basis for exempting such\ncreditors from the impediment to recovery that spendthrift trusts present. The appellant\noffers a rationale for drawing the distinction, whether the interests of the creditor are \xe2\x80\x9cgreat\nenough\xe2\x80\x9d to permit invasion of the trust. He relies on a portion of our discussion of the\nvalidity of spendthrift trusts in Hoffman Chevrolet Inc. v. Washington County Nat. Sav. Bank, 297\nMd. 691, 467 A.2d 758 (1983). After acknowledging that Maryland generally recognizes the\nvalidity of spendthrift provisions, which prevent creditors from reaching trust funds and\nconcluding that, by \xe2\x80\x9clogical extension ... a spendthrift trust can effectively protect retirement\n165\n\n\x0cbenefits,\xe2\x80\x9d Id. at 706, 467 A.2d at 766, we commented: \xe2\x80\x9cThe employer makes contributions\nto the trust to provide for the employee upon retirement. The creditor\'s interests are not\ngreat enough to permit an invasion of this trust.\xe2\x80\x9d Id. From this comment, the appellant\nconcludes: \xe2\x80\x9c... the Court accepted the concept that certain creditors\' interests can be great\nenough to ignore the \xe2\x80\x98 spendthrift\xe2\x80\x99 terms of a trust.\xe2\x80\x9d (Appellant\'s Brief at 7).\nWe are not convinced. This is a very slender reed on which to base such an\nimportant concept. Moreover, given the context of the Court\'s comment, it is not at all\ninconsistent with Robertson or Zouck.\nTo be sure, the Supreme Court of Mississippi quite recently held that, \xe2\x80\x9cas a matter of\npublic policy ... a beneficiary\'s interest in spendthrift trust assets is not immune from\nattachment to satisfy the claims of the beneficiary\'s intentional or gross negligence tort\ncreditors.\xe2\x80\x9d Sligh v. First National Bank of Holmes County, 704 So.2d 1020, 1029 (Miss. 1997).\nThere, the plaintiff and his wife brought suit against an uninsured and intoxicated\nmotorist/defendant for injuries arising from a traffic accident which resulted in the plaintiff\'s\nparalysis. The defendant was the beneficiary under two spendthrift trust established by his\nlate mother. Having obtained a default judgment for $5,000,000 in compensatory and\npunitive damages in their action alleging gross negligence, the plaintiffs sought to attach the\ndefendant\'s interest under the spendthrift trusts.\nIn arriving at its holding, the court acknowledged the four exceptions to the rule\nprohibiting the invasion of a spendthrift trust enumerated in the Restatement, i.e., claims: for\nsupport of child or wife; for necessaries; for \xe2\x80\x9cservices rendered and materials furnished\nwhich preserve or benefit the interest of the beneficiary; for State or federal taxes, Id. at\n1026, quoting Restatement (Second) of Torts \xc2\xa7157, and a fifth, when the trust is \xe2\x80\x98a selfsettled trust, i.e., where the trust is for the benefit of the donor,\xe2\x80\x99 it had itself recognized Id.,\nciting Deposit Guaranty Nat\xe2\x80\x99l Bank v. Walter E. Heller & Co., 204 So.2d 856, 859 (Miss. 1967)..\nConceding that \xc2\xa7 157 of the Restatement does not list an exception for involuntary tort\ncreditors, the court found support for its position in Comment a to that section, which, as\nwe have seen, admits of the possibility of a tort claimant with a claim against the beneficiary\nof a spendthrift trust being able to reach that beneficiary\'s interest. Sligh, supra. 704 So.2d at\n1026. It also was persuaded by those portions of Scott, The Law of Trusts and Bogert,\nTrusts and Trustees, quoted herein and to which the appellant referred us. Id. at 1027.\nFinally, the court rejected the three public policy considerations it identified from its own\n166\n\n\x0cprecedents upholding the validity of spendthrift trust provisions: \xe2\x80\x9c(1) the right of donors to\ndispose of their property as they wish; (2) the public interest in protecting spendthrift\nindividuals from personal pauperism, so that they do not become public burdens; and (3) the\nresponsibility of creditors to make themselves aware of their debtors\' spendthrift trust\nprotections.\xe2\x80\x9d Id. at 1027.\nThis is the minority position, which the Sligh court admitted. (citations omitted). In\nMintzer, the issue was whether a spendthrift trust could be attached for the payment of a\njudgment for alimony awarded to the wife of the trust beneficiary. 100 Pa. at 154. Answering\nin the negative, the court stated, broadly:\n\xe2\x80\x9cThe attachment issued on a debt of record fixed by judgment and decree.\nWhether the judgment be for a breach of contract or for a tort, matters not.\nThe testator recognized no such distinction. He impressed on the fund\nexemption from all kinds of legal process against the trustee, not only for\ndebts, but also for \xe2\x80\x98all liabilities whatever\xe2\x80\x99 of [the beneficiary].\xe2\x80\x9d\nId. at 154-55. In Kirk, the monies due to the beneficiary of a spendthrift trust were attached\nto enforce the payment of a tort judgment. Although recognizing exceptions for alimony and\nchild support, the court held that the beneficiary\'s income from the trust could not be\nattached prior to its receipt by him. 456 P.2d at 1010.\nOther than language in Gibson v. Speegle, 494 A.2d 165, 1984 Del. Ch. Lexis 475,\ncharacterizing as sound the conclusion of the authors of several respected treatises on trusts,\ni.e., Scott, Bogert and Griswold, that \xe2\x80\x9ctort claimants should not be considered \xe2\x80\x98creditors\' for\npurposes of a spendthrift trust provision\xe2\x80\x9d and an approving reference to Comment a to \xc2\xa7\n157 of the Restatement (Second) of Trusts in Helmsley-Spear, Inc. v. Winter, 101 Misc.2d 17,\n20, 420 N.Y.S.2d 599, 601 (1979), and statutes codifying the result, Sligh is the only case we\nhave found, and the only case that the appellant has cited, which holds expressly that a\nspendthrift trust may be invaded to pay the judgment of an intentional or gross negligence\ntort-judgment creditor. See also St. Paul & Marine Ins. Co. v. Cox, 583 F.Supp. 1221, 1228-29\n(N.D. Ala. 1984), aff\'d. 752 F.2d 550 (11th Cir. 1985), in which the insurer of an employer,\nwho had been defrauded by his employee, a beneficiary under an ERISA trust, was\npermitted to reach that employee\'s entire interest in the trust and, notwithstanding that the\nemployee was entitled to only periodic payments, to receive payment immediately.\nSligh is no longer the law of Mississippi. A mere five months after the decision in\n167\n\n\x0cSligh, by ch. 460, \xc2\xa7 2, Laws, 1998, effective March 23, 1998, the Mississippi Legislature\npassed the Family Trust Preservation Act of 1998. Miss Code Ann. \xc2\xa791-9-503 (2003),\nrelevant to this case, provides:\n\xe2\x80\x9cBeneficiary\'s Interest not subject to transfer; restrictions on transfers and\nenforcement of money judgments\n\xe2\x80\x9cExcept as provided in Section 91-9-509, if the trust instrument provides that a\nbeneficiary\'s interest in income or principal or both of a trust is not subject to\nvoluntary or involuntary transfer, the beneficiary\'s interest in income or\nprincipal or both under the trust may not be transferred and is not subject to\nthe enforcement of a money judgment until paid to the beneficiary.\xe2\x80\x9d\nIn addition, while a New York State trial court in Helmsley-Spear, Inc. v. Winter, supra ,\n101 Misc.2d 20, 20, 420 N.Y.S.2d at 601, had held that, because of his disloyalty, the interest\nof a beneficiary, who had been convicted of stealing from his employer, in an employment\ntrust, was not exempt from attachment, despite the spendthrift provision applicable to it, on\nappeal, the Appellate Division modified that decision, holding that the employee\'s interest\nwas exempt from the claims of tort creditors. 74 A.D.2d 195, 199, 426 N.Y.S.2d 778, 781\n(1980), aff\'d, 52 N.Y.2d 984, 438 N.Y.S.2d 79, 419 N.E.2d 11078 (1981). And in Speegle,\ndespite the Chancellor\'s favorable inclination toward tort-judgment creditors, a statute\nprevented him from adopting the view he clearly favored. 1984 Del. Ch. Lexis 475, *6-7.\nWe are not persuaded, in any event, by the reasoning of the Sligh court. It is true that\nthe court acknowledged the exceptions for alimony and for child support. Missing from the\ncourt\'s opinion, however, is any analysis of the basis for those exceptions. The Mississippi\nSupreme Court, although noting the donor\'s intention as, perhaps, the most important\npublic policy consideration it addressed, concluded that, because the law has generally\nrecognized exceptions, i.e., for support, alimony, taxes, to the spendthrift doctrine, the rights\nof trust donors to dispose of property as they wish are not absolute. 704 So.2d at 1028. This\nstatement, although accurate, does not analyze why the law carved out these particular\nexceptions, which, as the court recognized, effectively takes precedence over the trust\ndonor\'s intent.\nTo be sure, a contract creditor is on notice as to the terms of a spendthrift trust and,\non that account, is able to regulate his or her conduct in light of that information. That is not\nthe critical basis for the exception of alimony and support from the rule, however. Robertson\n168\n\n\x0cand Zouck, as our opinions make clear, relied heavily on the fact that the obligation was a\nduty and not a debt. Robertson supra, 192 Md. at 660, 65 A.2d at 295; Zouck, supra. 204 Md. at\n298-99, 104 A.2d at 579. That is also the theme that runs through Hofferbert, 58 F.Supp. at\n705. In none of these cases was notice mentioned as a basis for the decision. That a tortjudgment creditor is not on notice that he or she will be injured and thereby will incur a loss\ngoes without saying, but, with due respect to the near unanimous commentators, that fact\nalone does not make the claim he or she makes in respect of the loss anything other than a\ndebt or make its exemption from the bar of a spendthrift trust, a matter of public policy.\nThere is another reason that we reject the appellant\'s attempt to obtain an exemption\nfrom the bar of the spendthrift trust. Our case law reflects, as the appellant points out, that\nthis Court has, over time, expanded the class of persons permitted to invade a spendthrift\ntrust in satisfaction of obligations owed by beneficiaries, and, as a natural consequence of\nthat expansion, frustrated, in some cases, the intent of the trust settlors. The exceptions to\nthe spendthrift doctrine were recognized by this Court based on clear public policy\nconsiderations. The public policy that the appellant identifies and on which he relies is that\nof prohibiting criminals from benefitting financially from their crimes. As indicated, to\nestablish the existence of the public policy, he points to the \xe2\x80\x9cSon of Sam\xe2\x80\x9d statute, the\nSlayer\'s Rule and the Prisoners\' Litigation Act. Proceeding from that premise, he argues that\nMcGee, a convicted felony murderer, should not be allowed to receive benefits from the\ntrust to the exclusion of his creditors.\nCertainly, the public policy of this State does not countenance a system wherein\ncriminals are allowed to derive a financial benefit from their illegal activity, thus putting the\nlie to the oft stated admonition, \xe2\x80\x9ccrime does not pay.\xe2\x80\x9d In fact, this State has announced, it is\ntrue, a clear public policy in that regard. We, however, agree with the appellees that the\npublic policy goals on which the appellant\'s arguments are based, as strong and clear as they\nare, have no applicability to the case sub judice and, thus, do not, and cannot, inform our\ndecision. McGee is not, in any discernible manner, benefitting from the crime for which he\nwas convicted and ultimately imprisoned. Clearly, any benefit McGee receives from the\nTrust vested prior to the commission of his criminal acts and is completely independent of,\nand separate from, his criminal conviction. As the appellees point out, \xe2\x80\x9cMcGee\'s situation is\nnot in any way analogous to one where a criminal is \xe2\x80\x98rewarded\xe2\x80\x99 for his criminal acts by means\nof book, television, or movie royalties, or by inheriting from his victim\'s estate.\xe2\x80\x9d Unlike the\n169\n\n\x0ccriminal at whom the \xe2\x80\x9cSon of Sam\xe2\x80\x9d legislation and the Slayer\'s Rule are aimed, the benefit\nMcGee derives from the Trust and the criminal acts he committed are not related at all. The\ntechnically and legally more accurate statement is that McGee is benefitting from his status\nas a life beneficiary under a trust established by his deceased mother. It is simply incorrect to\nsay that McGee is, in any manner, benefitting from his crimes. Consequently, we decline to\nframe our analysis on the public policy goals set forth by the appellant.\nJudgment Affirmed, With Costs.\nBATTAGLIA, J., Dissenting.\nKatherine Ryon was beaten to death during the course of a robbery that occurred in\nher home. After James Calvert McGee was convicted of felony-murder for his participation\nin the robbery and murder of Ms. Ryon, a money judgment was entered against him\npursuant to a settlement agreement, in which McGee compromised civil claims brought\nagainst him by Robert Duvall, the Personal Representative of the Estate of Ms. Ryon. The\nmajority today concludes that Ms. Ryon\'s estate cannot enforce its judgment against\nMcGee\'s interest in an $877,000.00 spendthrift trust established for him by his deceased\nmother. The majority acknowledges that claimants seeking alimony, child support, and\nunpaid taxes may attach a beneficiary\'s interest in a spendthrift trust, but concludes that the\nvictim of a violent tort may not, reasoning that such a victim is only \xe2\x80\x9ca mere judgment\ncreditor.\xe2\x80\x9d For the reasons expressed herein, I respectfully disagree.\nA spendthrift trust is a trust that restrains the voluntary or involuntary transfer of a\nbeneficiary\'s interest in the trust. See Restatement (Second) of Trusts \xc2\xa7 152(2)(1959). As the\nmajority points out, this Court first acknowledged the validity of spendthrift trusts in Smith v.\nTowers, 69 Md. 77, 14 A. 497 (1888). In that case, our predecessors recognized that although\n\xe2\x80\x9cthe right to sell and dispose of property ... is a necessary incident ... to the absolute\nownership of ... property,\xe2\x80\x9d the \xe2\x80\x9claw does not ... forbid all and any restraints on the right to\ndispose of [trust property].\xe2\x80\x9d Id. at 87-88, 14 A. at 498-99. The law forbids, \xe2\x80\x9conly such\nrestraints as may be deemed against the best interests of the community.\xe2\x80\x9d Id. at 88, 14 A. at\n499. \xe2\x80\x9cThe donor or devisor\xe2\x80\x9d of trust, the Smith court stated, is \xe2\x80\x9cthe absolute owner of the\nproperty\xe2\x80\x9d and \xe2\x80\x9chas the right to prescribe the terms on which his bounty shall be enjoyed,\nunless such terms be repugnant to the law.\xe2\x80\x9d Id. at 88-89, 14 A. at 499. The Smith court\nreasoned that the gift of an equitable right to the exclusion of creditors is not \xe2\x80\x9crepugnant to\nthe law\xe2\x80\x9d because \xe2\x80\x9c[a]ll deeds and wills and other instruments by which such trusts are\n170\n\n\x0ccreated, are required by law to be recorded in the public offices, and creditors have notice of\nthe terms and conditions on which the beneficiary is entitled to the income of the property.\xe2\x80\x9d\nId. Thus, if creditors choose to extend credit to such debtors, \xe2\x80\x9cthey do so with their eyes\nopen.\xe2\x80\x9d Id.\nMs. Ryon, of course, did not have the luxury of assessing the extent and character of\nMcGee\'s financial resources before he robbed her and she died. For this reason, most legal\nscholars agree that tort creditors should not be precluded from recovering against a\ntortfeasor\'s interest in a spendthrift trust. According to Scott on Trusts,\nA man who is about to be knocked down by an automobile has no opportunity to\ninvestigate the credit of the driver of the automobile and has no opportunity to avoid being\ninjured no matter what the resources of the driver may be.... [T]here seems to be something\nrather shocking in the notion that a man should be allowed to continue in the enjoyment of\nproperty without satisfying the claims of persons whom he has injured. It may well be held\nthat it is against public policy to permit the beneficiary of a spendthrift trust to enjoy an\nincome under the trust without discharging his tort liabilities to others.\nSimilarly, and significantly, in Bogert on Trusts and Trustees, it is emphasized that,\n\xe2\x80\x9cthe validity of spendthrift trusts ... does not apply\xe2\x80\x9d and that the beneficiary should not,\ntherefore, \xe2\x80\x9cbe permitted to circumvent the case and statute law as to liability for wrongs by\ntaking advantage of the spendthrift clause.\xe2\x80\x9d\nThe majority concedes that tort creditors do not have the benefit of notice, which, as\nwas discussed in Smith, supra, is a primary purpose for not allowing the invasion of\nspendthrift trusts. Despite this, the majority concludes that Ms. Ryon\'s estate cannot reach\nthe corpus of the spendthrift trust because its claim is nothing other \xe2\x80\x9cthan a debt\xe2\x80\x9d and that\n\xe2\x80\x9cits exemption from the bar of a spendthrift trust\xe2\x80\x9d is not \xe2\x80\x9ca matter of public policy.\xe2\x80\x9d The\nmajority, in my opinion, is wrong.\nThis Court has held that a beneficiary\'s interest in a spendthrift trust may be attached\nto satisfy claims for alimony arrearages and for child support. (citations omitted) Also, a\nspendthrift trust was attached for the payment of federal income taxes in Mercentile Trust Co.\nv. Hofferbert, 58 F.Supp. 701, 705-06 (D.Md. 1944). \xe2\x80\x9c[N]one of these cases,\xe2\x80\x9d the majority\nstates, \xe2\x80\x9cwas premised on there having been a lack of notice.... Rather, the courts recognized a\nfundamental difference between these obligations and those of ordinary contract creditors.\xe2\x80\x9d\nThe fundamental difference is essentially that these obligations were premised upon judicial\n171\n\n\x0cintervention and determination of sound public policy.\nJust as it is sound public policy to permit the attachment of a spendthrift trust for\nalimony, child support, and taxes, it is also as sound to permit invasion to make victims of\ntortious conduct whole. Indeed, a tortfeasor may be liable not only for compensatory\ndamages, but also punitive damages, which we allow in order to \xe2\x80\x9cpunish the wrongdoer and\nto deter such conduct by the wrongdoer and others in the future.\xe2\x80\x9d Caldor, Inc. v. Bouden, 330\nMd. 632, 661, 625 A.2d 959, 972 (1993). Consequently, to equate victims of tortious conduct\nwith contract creditors and distinguish them from recipients of alimony, child support, and\ntax claims, is without merit.\nAs the majority concedes, spendthrift trusts are considered valid in Maryland in large\npart because, by virtue of filing requirements, creditors are put on at least constructive notice\nof the limited interest of the beneficiary of such a trust. Such notice allows creditors to\nprotect themselves, something that Ms. Ryon could not have done. Moreover, the \xe2\x80\x9cdutydebt\xe2\x80\x9d distinction set forth by the majority as the basis for its holding is unavailing. The\nobligation to restitute a wrong is commensurate with the obligations to pay alimony, child\nsupport, and taxes. I agree with the commentators that \xe2\x80\x9cit is against public policy to permit\nthe beneficiary of a spendthrift trust to enjoy an income under the trust without discharging\nhis tort liabilities to others.\xe2\x80\x9d See Scott on Trusts, supra. Consequently, I respectfully dissent.\nClass Discussion Tool\nHenry created a trust for the benefit of his son, Marvin. Henry told all of his friends\nthat he was creating the trust because he was afraid that Marvin would end up living on the\nstreet. He told his friend, Maggie, \xe2\x80\x9cIf I give that loser son of mine any money, he would be\nbroke in a month. He never met a credit card he didn\xe2\x80\x99t like.\xe2\x80\x9d The language of the trust\nstated, \xe2\x80\x9cI leave my entire estate in trust to Oscar for the benefit of my son, Marvin.\xe2\x80\x9d After\nHenry died, Oscar assumed his role as trustee. Marvin was depressed over his father\xe2\x80\x99s death,\nso he went on a shopping spree for a week. As a result, he ended up owing $40,000 to\nAmerican Express. American Express got a $40,000 judgment against Marvin. Oscar felt\nsorry for Marvin, so he gave him $10,000 in cash to go to a spa. Marvin placed the $10,000\nin his checking account. Then, Susan, Marvin\xe2\x80\x99s ex-wife agreed to lend Marvin the money to\npay $15,000 of his American Express bill. Susan took the money from their son Kenneth\xe2\x80\x99s\ncollege fund. When Kenneth found out about the loan, he sued his father\xe2\x80\x99s trust to recover\nthe money. American Express attempted to attach the money in Marvin\xe2\x80\x99s checking account.\n172\n\n\x0cMarvin also signed a contract to pay Dr. Roberts $80,000 to give his girlfriend, Peggy breast\nimplants. After Marvin refused to pay him, Dr. Roberts sued the trust based upon the\ncontract. Please analyze all of the relevant legal issues.\n\n173\n\n\x0cChapter 6 - Modification and\nTermination of Trusts\nA trust may be modified or terminated in several different ways. First, the terms of\nthe trust may dictate the duration of the trust. For instance, O may give Blackacre in trust to\nA for the benefit of B for life. The trust will end when B dies. Further, language in the trust\ninstrument may indicate the manner in which the trust may be modified. Consider the\nfollowing example. O gives a certain sum of money in trust to A for the benefit of B. A is\ninstructed to pay B $1000 per month. In the event that B becomes incapacitated, B has the\npower to modify or terminate the trust. The testator could also give an independent third\nparty the authority to modify or terminate the trust. With regards to an inter vivos trust, the\nsettlor can revoke the trust if she has retained the right in the trust instrument. If the settlor\nand all of the beneficiaries consent, an irrevocable inter vivos trust may be modified or\nterminated. A testamentary trust can be terminated by consent of all of the beneficiaries as\nlong as a material purpose of the trust does not exist. For instance, if the testator establishes\na trust to pay for her children\xe2\x80\x99s education, the trust cannot be terminated as long as one of\nthe testator\xe2\x80\x99s children have not received the requisite education.\nUnder the doctrine of merger, a trust is terminated if the legal and equitable title to\nthe trust property ends up in the hand of one person. For example, Mary created a trust\nnaming Peter and Paul as trustees of Brownacre. Peter and Paul conveyed their legal title to\nJohn, the only beneficiary of the trust. As a result, the trust terminates and John receives fee\nsimple title to Brownacre. In order for Peter and Paul to become the owners of the\nBrownacre free of the trust, John could convey his equitable interest in Brownacre to Peter\nand Paul. John\xe2\x80\x99s equitable interest would merge with Peter and Paul\xe2\x80\x99s legal interest to give\nthem the fee simple title to Brownacre. A trust may also be terminated if it runs out of\nproperty. For instance, if the testator places a certain amount of money in trust, the trust will\ncease to exist once the trustee has spent all of the money. According to the terms of the\ntestamentary trust included in Whitney Houston\xe2\x80\x99s will, her daughter, Bobbi Christina, is to\nreceive all of the money in the trust when she reaches the age of 30. Once the trustee\ndisburses the money to Bobbi Christina, the trust is extinguished.\n\n174\n\n\x0c6.1\n\nTermination\n\nIn the Matter of the Estate of Bonardi, 871 A.2d 103\nPARRILLO, J.A.D.\nThis is an appeal from a judgment of the Superior Court, Chancery Division,\ncertified as final, Rule 4:42-2, permitting termination of a testamentary trust. For the\nfollowing reasons, we reverse.\nWilliam Bonardi died testate on March 9, 2002, survived by his wife, Donna, and his\ntwo daughters, Danielle and Jessica. At the time of his death, Danielle was eighteen-years old\nand Jessica was sixteen-years old. Although decedent\'s Will included some specific bequests\nto other individuals, his wife and two daughters were the primary beneficiaries under\nseparate testamentary trusts, each made up of one-half of the residuary estate. Stephen F.\nPellino, decedent\'s friend, was named Executor of decedent\'s estate and Trustee of the two\ntestamentary trusts.\nThe first trust named plaintiff, Donna Bonardi, as the income beneficiary and\ndevised the remainder to Danielle and Jessica. The second trust named the daughters as the\nonly beneficiaries. In both instances, the daughters were not entitled **105 to outright\ndistribution of their interest before they reached the age of twenty-five.\nUnder the first trust, plaintiff\'s interest was subject to several terms and conditions.\nParagraph TENTH of decedent\'s Will reads, in pertinent part:\nFor the duration of the life of my wife, DONNA, the Trustee shall pay her or\napply towards her benefit, all of the net income of this trust. In addition, the\nTrustee may pay to her or apply to her benefit such amounts of the principal of\nthe Trust as the Trustee, in the exercise of the Trustee\'s absolute discretion,\ndeems advisable for her welfare. In deciding to make such distributions of\nprincipal to or for DONNA\'S benefit, the Trustee shall be guided by the\nfollowing statement of my purposes and intentions: It is my expectation that the trust\nincome and principal will not be made available to provide primary support for the beneficiary,\nas I expect that DONNA in complete or large measure will support herself. I\nfurther direct that my Trustee shall, to the extent possible, not make payments to DONNA\nout of principal unless necessary, and that he rather seek to preserve the corpus, to the extent\n175\n\n\x0cpossible, for ultimate distribution to my children or survivor of them. My Trustee shall have\ncomplete authority to make these determinations which I direct shall not be\nsubject to legal challenge. In making determinations as to distributions of\nprincipal for DONNA\'S benefit, I ask that my Trustee be mindful of the\nstandard of living that we maintained during my lifetime.\n[emphasis supplied.].\nExplaining the limitations imposed pursuant to this paragraph, Pellino certified that\ndecedent had expected his wife, who had gone to school and obtained a nursing degree\nduring the marriage, to work in the nursing field on a full-time basis after his death.\nAccording to Pellino, decedent was also concerned about \xe2\x80\x9chis wife\'s inappropriate use of\nalcohol\xe2\x80\x9d and feared \xe2\x80\x9cthat if the estate\'s assets were left to Donna outright, she would\ncontinue to lead this lifestyle which he felt was inappropriate, unhealthy and against his\nwishes.\xe2\x80\x9d Further, decedent \xe2\x80\x9cdid not want the proceeds of his hard work to be used for the\nbenefit of any future boyfriend or husband that Donna might choose.\xe2\x80\x9d None of these\nconcerns, however, was expressly addressed by a spendthrift provision in the trust or\nanywhere else in the Will.\nEven so, decedent evidenced his intent elsewhere in the Will. Notably, paragraph\nELEVENTH, which concerned the daughters\' trust, provided that \xe2\x80\x9cthe trust income and\nprincipal will not be made available for primary support for the beneficiary as I expect that\nmy wife will contribute to their support....\xe2\x80\x9d Further, paragraph TWELFTH granted the\nTrustee the exclusive right to \xe2\x80\x9cdeal with [the] corpus and the income of such trusts.\xe2\x80\x9d Only if\nthe accumulated income from the trust was insufficient could the Trustee invade the\nprincipal.\nA dispute eventually arose between plaintiff and the Executor/Trustee over the\namount necessary for plaintiff\'s support. Plaintiff claimed that because she was only able to\nwork part-time due to chronic medical problems, her living expenses exceeded her income,\nincluding the amounts made available to her by the Trustee under the first testamentary\ntrust. Essentially, she complained that Pellino was improperly withholding principal\nnecessary for her support and requested immediate distribution of all principal in the trust.\nWhile acknowledging that plaintiff\'s payments from the trust had decreased over\n176\n\n\x0ctime, Pellino insisted the reductions were necessary to preserve the corpus and carry out the\ntrust\'s purpose. He explained that he initially allowed plaintiff to control all the finances in\norder to ease the transition after her husband\'s death, and that he paid her $8,000 per month\nwhen he first took over as Trustee, but that she was advised the payments would be reduced\nbecause she was expected to work and contribute towards her own support. As significantly,\nPellino certified that the net monthly income from Donna\'s trust was only $2,845, yet he was\npaying plaintiff $4,545 per month, thereby depleting the principal by as much as $1,700 per\nmonth. Pellino also disputed plaintiff\'s assertion that she could only work part-time, stating\nthat she had \xe2\x80\x9cresisted any discussion of where she works, how much she earns, how many\nhours she works, and why she is unable to earn more.\xe2\x80\x9d\nOn account of this impasse, on December 16, 2003, plaintiff filed an action in the\nChancery Division to compel formal accountings of her husband\'s estate and the\ntestamentary trust created on her behalf, and to direct the immediate distribution to her of\nall net income as well as principal held pursuant to that trust necessary to maintain the\nmarital standard of living. Simultaneously, decedent\'s two daughters filed a separate\ncomplaint, also seeking a formal estate accounting and distribution of income and/or\nprincipal from the second trust created under their father\'s Will for their exclusive benefit.\nOn the return date of the orders to show cause, the trial judge issued a consolidated order\nrequiring the Executor to provide an informal accounting by March 15, 2004, and to\nexamine the financial requests of the beneficiaries \xe2\x80\x9cin the context of their needs and the\nintent of the testator.\xe2\x80\x9d Pursuant to that order, Pellino rendered a timely accounting, and\nplaintiffs\' counsel was given an opportunity to examine all of the estate\'s financial records.\nSometime thereafter, the two complaints were consolidated and the action proceeded on the\nrespective claims for distribution under a single docket number\nOn May 12, 2004, Danielle and Jessica Bonardi executed a waiver of their remainder\ninterest in the trust established on behalf of their mother so that the corpus could be\nimmediately distributed to her. Pellino, however, refused to accept the waiver. As a result,\nthe daughters filed a motion to terminate the testamentary trust, supported by certifications\nstating they understood they would inherit one-half of the trust principal upon their mother\'s\ndeath, but believed it was in their best interest if the trust were terminated and the corpus\nmade immediately available to their mother. At the time, both daughters were living with\n177\n\n\x0ctheir mother and under the age of twenty-five: Danielle, being only twenty years old, and\nJessica, eighteen.\nFollowing oral argument, the judge granted the motion and terminated the\ntestamentary trust, directing distribution of the daughters\' remainder interest in trust\nprincipal to plaintiff, Donna Bonardi. Mistakenly believing that \xe2\x80\x9call beneficiaries [were] at\nleast twenty-one years old,\xe2\x80\x9d the judge reasoned in part:\nNew Jersey permits the termination of a trust upon consent of all beneficiaries\n(even if the trust is discretionary) where the income beneficiary is different from\nthe remainder beneficiary. 6 Clapp. New Jersey Practice: Wills and Administration\n\xc2\xa7543 (3d ed. 1982). This is so because the testator did not establish the trust\nbecause of an especial lack of confidence in the income beneficiary\'s ability to\nmanage the fund. Id. Instead, the testator may possibly have wished to save estate\nand inheritance taxes on the income beneficiary\'s death, or he may have had\nsome other motive. Id. In any event, there being no other manifestation of\nintention in the Will bearing on the subject, the testator probably would not\nobject if all the beneficiaries consent to the termination of the trust. 3 Scott,\nTrusts \xc2\xa7 337.1.\nOn appeal, the Executor/Trustee maintains, among other things, that termination of\nthe testamentary trust frustrates and defeats the express intent of the testator and is,\ntherefore, impermissible. He further argues that the judge\'s finding that the testator\'s\nprobable intent was to the contrary was unsupported by the evidence and constituted error.\nWe agree with those contentions and reverse.\nIt is well-settled that a court\'s primary function is to enforce the testator\'s expressed\nintent with respect to a testamentary trust. Fidelity Union Trust Co. v. Margetts, 7 N.J. 556, 566,\n82 A.2d 191 (1951); In re Ransom Testamentary Trust, 180 N.J.Super. 108, 117, 433 A.2d 834\n(Law Div. 1981); Cinnaminson Tp. v. First Camden Nat\xe2\x80\x99l Bank & Trust Co., 99 N.J.Super. 115,\n127, 238 A.2d 701 (Ch. Div. 1968). Our duty is to \xe2\x80\x9cuphold testamentary dispositions of\nproperty, made through the medium of trusts, instead of searching for reasons for avoiding\nthem, or dealing with them with any degree of disfavor.\xe2\x80\x9d Fidelity Union, supra. 7 N.J. at 565,\n82 A.2d 191 (internal citation omitted). In this regard, the whole will must be examined to\nascertain the purpose of the testator. Ibid.\n178\n\n\x0cTo be sure, all the beneficiaries of a testamentary trust can consent to the trust\'s\ntermination if none of them is under an incapacity and continuance of the trust is no longer\nnecessary to carry out a material purpose of the trust. Fidelity Union, supra. 7 N.J. at 566, 82\nA.2d 191; In re Ransom Testamentary Trust, supra., 180 N.J.Super. at 120, 433 A.2d 834;\nRestatement (Second) of Trusts \xc2\xa7 337 (1959). Thus, if all of the purposes of the trust have\nbeen carried out, or if the only purpose remaining unfulfilled is to confer upon certain\nbeneficiaries interests successively in possession and in remainder, then all persons in\ninterest, if they are sui juris, may jointly compel termination of the trust. Bd. Of Dir. of Ajax\nElectrothermic Corp.v. First Nat\xe2\x80\x99l Bank of Princeton, 33 N.J. 456, 465, 165 A.2d 513 (1960). Ajax\nII ); 6 Alfred C. Clapp et al., New Jersey Practice Series \xc2\xa7 542 (3d Ed.1982).\nOn the other hand:\nIf a trust is created for successive beneficiaries and it is not the only purpose\nof the trust to give the beneficial interest in the trust property to one\nbeneficiary for a designated period and to preserve the principal for the other\nbeneficiary, but there are other purposes of the trust which have not been\nfully accomplished, the trust will not be terminated merely because both of\nthe beneficiaries desire to terminate it, or one of them acquires the interest of\nthe other.\n[Restatement (Second) of Trusts, supra. \xc2\xa7 337 comment g.].\nIndeed, one of the conditions which must exist before a trust will be accelerated or\nterminated, even upon application of all the parties in interest, \xe2\x80\x9cis that every reasonable\nultimate purpose of the trust\'s creation and existence has been accomplished and that no fair\nand lawful restriction imposed by the testator will be nullified or disturbed by such a result.\xe2\x80\x9d\nFidelity Union, supra. 7 N.J. at 570, 82 A.2D 191.\nEven where the beneficiary is the sole party in interest and of full age, and the trust is\nnot a spendthrift trust, the beneficiary may not automatically have it terminated, irrespective\nof the creator\'s intention. Where, for instance, the trustee has active duties, the trust is not\nterminable as a matter of right at the demand of the beneficiary, even though the beneficiary\nis given the disposition at death. Id. at 564, 82 A.2d 191.\nFurther, spendthrift trusts, trusts for support of a beneficiary, and discretionary\n179\n\n\x0ctrusts cannot be terminated by consent of the beneficiaries. Restatement (Second) of Trusts, supra,\n\xc2\xa7 337 at comments l, m, and n. This is because the material purpose of a spendthrift trust is\nto prevent anticipation or control of future income or corpus by the protected income\nbeneficiary and, therefore, acceleration of the trust would directly contravene the testator\'s\nintent. Heritage Bank North N.A. v. Hunterdon Medical Center, 164 N.J. Super. 33, 36, 395 A.2d\n552 (App. Div. 1978). Moreover, \xe2\x80\x9ceven if not of an express spendthrift nature, a trust\nnevertheless created for the primary purpose of ensuring the beneficiary\'s support and\nmaintenance is not terminable by consent since such termination would obviously also\ncontravene testamentary intent.\xe2\x80\x9d Ibid. And, the fact that a trustee has the power to invade\nthe corpus for the beneficiary\'s benefit does not negate a testator\'s intent to establish such a\ntrust. Id. at 37, 395 A.2d 552. In short, \xe2\x80\x9c[t]he question for determination is whether the\nsettlor had any other purpose in mind than to enable the beneficiaries to successively enjoy\nthe trust property.\xe2\x80\x9d Baer v. Fidelity Union Trust Co., 133 N.J. Eq. 264, 266, 31 A.2d 823 (E & A\n1943).\nHere, a material purpose of the trust not only still remains, but would be soundly\ndefeated by the daughters\' renunciation of trust corpus in favor of their mother, the income\nbeneficiary whose right to principal was expressly limited under the terms of the trust. First\nand foremost, the request is not simply to terminate the trust and accelerate distribution to\nthe intended successive beneficiaries, but quite the opposite, to divest the remaindermen of\ntheir interest and divert the trust corpus instead to the income beneficiary. This, however, is\ndirectly contrary to the express testamentary plan, evident from the face of the language of\nthe Will itself. As stated in paragraph EIGHTH and provided for in paragraph TENTH, the\nclear purpose of the trust is to preserve the corpus for the ultimate benefit of decedent\'s\ndaughters \xe2\x80\x9cper stirpes and not per capita.\xe2\x80\x9d Thus, if one or both of the daughters were to\npredecease plaintiff, their children-decedent\'s grandchildren-would acquire their mother\'s\ninterest in the trust. However, if the relief requested were to be granted, not only would\nDanielle and Jessica be divested of their remainder interest, but the rights of the putative\ngrandchildren would be defeated as well, cf. In re Estate of Branigan, 129 N.J. 324, 609 A.2d\n431 (1992), hereby frustrating the testator\'s clear intent. Plainly, in this instance, acceleration\nand termination of the trust would have resulted in a distribution to a person other than\nthose intended by the testator. Cf. Ajax Electothermic Corp. v. First Nat. Bank of Princeton, 7 N.J.\n82, 87-88, 80 A.2d 559 (1951)(Ajax I ).\n180\n\n\x0cAnother purpose of the trust, evidenced in paragraph TENTH, was to provide\nsupplemental support and maintenance for plaintiff without making trust income and\nprincipal \xe2\x80\x9cavailable to provide primary support.\xe2\x80\x9d Rather, the announced expectation was\nthat plaintiff would \xe2\x80\x9cin complete and large measure\xe2\x80\x9d support herself and \xe2\x80\x9ccontribute to [the\ndaughters\'] support as may be appropriate to their age and circumstance from time to time.\xe2\x80\x9d\nIn fact, payments out of principal were not to be made to plaintiff unless absolutely\nnecessary for her welfare. And, in making this determination, the trustee was vested with\n\xe2\x80\x9cabsolute discretion.\xe2\x80\x9d Indeed, the express terms of the Will divested plaintiff of actual\ncontrol over the estate\'s assets. Thus, the creation of a trust with \xe2\x80\x9ccomplete authority\xe2\x80\x9d in a\ntrustee evidences testator\'s plain intent to deny plaintiff immediate distribution of, or control\nover, distribution of trust corpus. See Heritage Bank, supra. 164 N.J. Super. At 37, 395 A.2d\n552.\nIt also demonstrates the testator\'s intent to insulate trust principal from any control\nexerted by the daughters during their mother\'s lifetime. The language of paragraph\nEIGHTH, which states that neither Danielle nor Jessica is entitled to her respective\nremainder share before she reaches the age of twenty-five, supports this construction. By\nselecting a specific age as the earliest time at which his daughters may receive outright\ndistribution of principal, the testator implicitly negated their ability to affect the trust before\nthen. Yet, when Danielle and Jessica made the mutual decision to renounce their respective\nremainder interests, they were only twenty and eighteen years of age respectively, living with\ntheir mother, and presumably still under her influence. Cf. Archard v. Mesmer, 110 N.J.Super.\n560, 562, 266 A.2d 314 (App. Div. 1970)(holding that mutual promises, unsupported by\nvaluable consideration, to equally divide expected interests in an estate will ordinarily not be\nenforced because they thwart the plain wishes of the testator and are fraught with\nopportunities for fraud). Clearly, such decision-making by those otherwise ineligible under\nthe explicit terms of the Will contravenes the testator\'s plain intent. And, the expressed\nwishes of the testator to preserve trust corpus for the benefit of his children or their\nsurvivors simply cannot be reconciled with the family settlement struck in this case that\nachieves diametrically opposite results. The named remaindermen not having yet attained the\nage to exert control over the trust corpus, a material purpose of the trust still exists and\nwould be completely frustrated by its premature termination and distribution of principal to\nplaintiff, an unintended beneficiary.\n181\n\n\x0cPlaintiff\'s reliance on Ajax II, supra, to justify the relief sought in this case is\nmisplaced. Ajax II dealt with a situation exactly opposite of that presented herein, involving\nnot a renunciation by the remaindermen, but rather a waiver by a life tenant who was\nentitled to a fixed monthly disbursement. 33 N.J. at 460, 163 A.2d 513. In return for her\nrelease of her $150 per month life interest in the trust, the corporate remainderman\nestablished an annuity that provided the life tenant with a benefit greater than that which she\nwas receiving under the testamentary trust. Ibid. The Court found this circumstance\nconsistent with the testator\'s intention and, therefore, sufficient to justify acceleration and\ntermination of the trust so that the intended beneficiaries could immediately receive\ndistribution of the corpus Id. at 469, 165 A.2d 513. Here, of course, the relief requested\nwould not result in an accelerated distribution of trust corpus to the intended beneficiaries,\nbut rather a diversion of principal to someone expressly ineligible under the trust.\nWe disagree with the trial court\'s construction of the Will to the contrary. We find no\nbasis in the record, or in the rather plain language of the testamentary instrument, for the\njudge\'s conclusions that the testator \xe2\x80\x9cdid not establish the trust because of an especial lack of\nconfidence in the income beneficiary\'s ability to manage the fund[,]\xe2\x80\x9d and that \xe2\x80\x9cthe testator\nmay possibly have wished to save estate and inheritance taxes on the income beneficiary\'s\ndeath, or he may have had some other motive.\xe2\x80\x9d The former, in fact, is belied by the record\nevidence and the latter amounts to no more than rank speculation. Although we are sensitive\nto the deference to which the trial court\'s findings are entitled, that deference is predicated\nupon adequate evidentiary support for those findings. Rosa Farms Resort. Inc. v. Investors Ins.\nCo. 65 N.J. 474, 483-84, 323 A.2d 495 (1974). Our review of the record constrains us to\nconclude that the evidence did not warrant the determination that \xe2\x80\x9cthe testator probably\nwould not object if all the beneficiaries consent to termination of the trust.\xe2\x80\x9d\nWe are convinced of just the opposite. The relief requested here defeats the\ntestamentary plan, evidenced from the face of the instrument itself, and contravenes the\nexpressed wishes of the testator.\nReversed.\n\n6.2\n\nClaflin and Material Purpose\nIn Clafin v. Clafin, 20 N.E. 454 (Mass. 1889), the testator created a trust to benefit her\n182\n\n\x0cson. According to the terms of the trust, the trustee was to terminate the trust and pay the\nprincipal to the son when he reached the age of thirty. When he turned twenty-one, since he\nwas the only beneficiary of the trust, the son went to court to have the trust terminated, so\nhe could receive the money. The court ruled against the son establishing the rule that a trust\ncannot be modified or terminated early if a material purpose of the trust has not been\naccomplished. This rule referred to as the Clafin doctrine is still applicable. Consequently, it\nis important for the court to determine the purpose of the trust. That task is usually easy\nbecause the purpose is often stated in the trust instrument.\n\nIn re Estate of Brown, 528 A.2d 752\nGIBSON, Justice.\nThe trustee of a testamentary trust appeals an order of the Washington Superior\nCourt granting the petition of the lifetime and residual beneficiaries of the trust to terminate\nit and to distribute the proceeds to the life tenants. We reverse.\nThe primary issue raised on appeal is whether any material purpose of the trust\nremains to be accomplished, thus barring its termination. The appellant/trustee also raises\nthe closely related issue of whether all beneficiaries are before the court, i.e., whether the\nclass of beneficiaries has closed.\nAndrew J. Brown died in 1977, settling his entire estate in a trust, all of which is held\nby the trustee under terms and conditions that are the subject of this appeal. The relevant\nportion of the trust instrument provides:\n(3) The ... trust ... shall be used to provide an education, particularly a college\neducation, for the children of my nephew, Woolson S. Brown. My Trustee is hereby\ndirected to use the income from said trust and such part of the principal as may be\nnecessary to accomplish this purpose. Said trust to continue for said purpose until\nthe last child has received his or her education and the Trustee, in its discretion, has\ndetermined that the purpose hereof has been accomplished.\nAt such time as this purpose has been accomplished and the Trustee has so\ndetermined, the income from said trust and such part of the principal as may be necessary shall be\nused by said Trustee for the care, maintenance and welfare of my nephew, Woolson S. Brown and\nhis wife, Rosemary Brown, so that they may live in the style and manner to which they are\naccustomed, for and during the remainder of their natural lives. Upon their demise, any\nremainder of said trust, together with any accumulation thereon, shall be paid to\n183\n\n\x0ctheir then living children in equal shares, share and share alike. (Emphasis added.)\nThe trustee complied with the terms of the trust by using the proceeds to pay for the\neducation of the children of Woolson and Rosemary Brown. After he determined that the\neducation of these children was completed, the trustee began distribution of trust income to\nthe lifetime beneficiaries, Woolson and Rosemary.\nOn June 17, 1983, the lifetime beneficiaries petitioned the probate court for\ntermination of the trust, arguing that the sole remaining purpose of the trust was to maintain\ntheir lifestyle and that distribution of the remaining assets was necessary to accomplish this\npurpose. The remaindermen, the children of the lifetime beneficiaries, filed consents to the\nproposed termination. The probate court denied the petition to terminate, and the\npetitioners appealed to the Washington Superior Court. The superior court reversed,\nconcluding that continuation of the trust was no longer necessary because the only material\npurpose, the education of the children, had been accomplished. This appeal by the trustee\nfollowed.\nOrdinarily, a trial court\'s conclusions will be upheld where they are supported by its\nfindings. Darmouth Savings Bank v. F.O.S. Associates, 145 Vt. 62, 66, 486 a.2d 623, 625 (1984.\nHere, the superior court\'s conclusion that the trust could be terminated because the material\npurpose of the trust had been accomplished has an insufficient basis in its findings, and this\nconclusion cannot stand.\nAn active trust may not be terminated, even with the consent of all the beneficiaries,\nif a material purpose of the settlor remains to be accomplished. See, e.g., Ambros v. First\nNational Bank, 87 Nev. 114, 117, 482 P.2d 828, 829 (1971); Sundquist v. Sundquist, 639 P.2d\n181, 187 (Utah 1981); Restatement (Second) of Trusts \xc2\xa7 337 (1959); 4 A. Scott, Scott on\nTrusts \xc2\xa7 337 at 2655 3d ed. 1967). This Court has invoked a corollary of this rule in a case\nwhere partial termination of a trust was at issue. In re Bayley Trust, 127 Vt. 380, 385, 250 A.2d\n516, 519 (1969).\nAs a threshold matter, we reject the trustee\'s argument that the trust cannot be\nterminated because it is both a support trust and a spendthrift trust. It is true that, were\neither of these forms of trust involved, termination could not be compelled by the\nbeneficiaries because a material purpose of the settlor would remain unsatisfied. See\nRestatement (Second) of Trusts \xc2\xa7 337.\nThe trust at issue does not qualify as a support trust. A support trust is created where\n184\n\n\x0cthe trustee is directed to use trust income or principal for the benefit of an individual, but\nonly to the extent necessary to support the individual. 2 A. Scott, Scott on Trusts \xc2\xa7 154, at\n1176; G. Bogert, Trusts and Trustees \xc2\xa7 229, at 519 (2d ed. Rev. 1979). Here, the terms of the\ntrust provide that, when the educational purpose of the trust has been accomplished and the\ntrustee, in his discretion, has so determined, \xe2\x80\x9cthe income ... and such part of the principal as\nmay be necessary shall be used by said Trustee for the care, maintenance and welfare of ...\n[Rosemary and Woolson Brown] so that they may live in the style and manner to which they\nare accustomed....\xe2\x80\x9d The trustee has, in fact, made the determination that the educational\npurpose has been accomplished and has begun to transfer the income of the trust to the\nlifetime beneficiaries. Because the trustee must, at the very least, pay all of the trust income\nto beneficiaries Rosemary and Woolson Brown, the trust cannot be characterized as a\nsupport trust.\nNor is this a spendthrift trust. \xe2\x80\x9cA trust in which by the terms of the trust or by\nstatute a valid restraint on the voluntary and involuntary transfer of the interest of the beneficiary is\nimposed is a spendthrift trust.\xe2\x80\x9d Restatement (Second) of Trusts \xc2\xa7 152(2). (Emphasis added.)\nWhile no specific language is needed to create a spendthrift trust, id. at comment c, here the\nterms of the trust instrument do not manifest Andrew J. Brown\'s intention to create such a\ntrust. See Huestis v. Manley, 110 Vt. 413 419, 8 A.2d 644, 646 (1939).\nThe trustee cites Barnes v. Dow, 59 Vt. 530, 10 A. 258 (1887), for the proposition that\na gift of support for life must be deemed a spendthrift trust. In fact, in Barnes, the terms of\nthe will gave the testator\'s sister \xe2\x80\x9csupport during her natural lifetime out of my estate.\xe2\x80\x9d Id., at\n541, 10 A. at 261. This Court construed the will as establishing a trust for support and held\nthat an interest arising under such a trust is inalienable. Id. The mere fact that an interest in a\ntrust is not transferable does not make the trust a spendthrift trust. See Restatement (Second)\nof Trusts \xc2\xa7 154 comment b. In any event, Barnes is inapplicable here because a support trust\nis not at issue.\nAlthough the issue as to whether a material purpose of the trust remains cannot be\nanswered through resort to the foregoing formal categories traditionally imposed upon trust\ninstruments, we hold that termination cannot be compelled here because a material purpose\nof the settlor remains unaccomplished. In the interpretation of trusts, the intent of the\nsettlor, as revealed by the language of the instrument, is determinative. In re Jones, 138 Vt.\n223, 228, 415 A.2d 202, 205 (1980) citing v Destitute of Bennington County. v. Putnam Memorial\n185\n\n\x0cHospital, 125 Vt. 289, 293, 215 A.2d 134, 137 (1965).\nWe find that the trust instrument at hand has two purposes. First, the trust provides\nfor the education of the children of Woolson and Rosemary Brown. The Washington\nSuperior Court found that Rosemary Brown was incapable of having more children and that\nthe chance of Woolson Brown fathering more children was remote; on this basis, the court\nconcluded that the educational purpose of the trust had been achieved.\nThe settlor also intended a second purpose, however: the assurance of a life-long\nincome for the beneficiaries through the management and discretion of the trustee. We\nrecognize that, had the trust merely provided for successive beneficiaries, no inference could\nbe drawn that the settlor intended to deprive the beneficiaries of the right to manage the\ntrust property during the period of the trust. Estate of Weeks, 485 Pa. 329, 332, 402 A.2d 657,\n658 (1979), (quoting Restatement (Second) of Trusts \xc2\xa7 337 comment f). Here, however, the\nlanguage of the instrument does more than create successive gifts. The settlor provided that\nthe trustee must provide for the \xe2\x80\x9ccare, maintenance and welfare\xe2\x80\x9d of the lifetime beneficiaries\n\xe2\x80\x9cso that they may live in the style and manner to which they are accustomed, for and during the\nremainder of their natural lives.\xe2\x80\x9d (Emphasis added.) The trustee must use all of the income and\nsuch part of the principal as is necessary for this purpose. We believe that the settlor\'s\nintention to assure a life-long income to Woolson and Rosemary Brown would be defeated\nif termination of the trust were allowed. See 4 Scott, Scott on Trusts \xc2\xa7 337.1, at 2261-64; see\nalso Will of Hamburger, 185 Wis. 270, 282, 201 N.W. 267, 271 (1924) (court refused to\nterminate trust since testator desired it to continue during life of his wife).\nBecause of our holding regarding the second and continuing material purpose of the\ntrust, we do not reach the question of whether the trial court erred in holding that the\neducational purpose of the trust has been accomplished.\nReversed; judgment for petitioners vacated and judgment for appellant entered.\n\n6.3\n\nDeviation and Changed Circumstances\nThe doctrine of deviation allows a court to modify or terminate a trust by court\n\norder if the trust is no longer necessary because the purposes of the trust have been fulfilled,\nhave become illegal, or are impossible to fulfill. Additionally, the court may permit the\ntrustee to deviate from the testator\xe2\x80\x99s instructions as contained in the trust if the court is\nconvinced that the testator would have agreed to the change had he or she foreseen the\n186\n\n\x0ccurrent situation. There are two main types of deviation-administrative and equitable.\nAdministrative deviation lets the trustee deviate from the administrative directions in the\ntrust instrument because of changed in circumstances if compliance with those directions\nwould defeat or substantially impair the accomplishment of the purposes of the trust. This\ndoctrine applies to actions like when and how to invest trust property. Under the doctrine of\nequitable deviation, trustees are permitted to deviate from the distributive terms of the trust\nbecause of change in circumstances. Thus, the trustee may modify the time and manner he\ndistributes the trust property.\n\nIn re Trust of Riddle, 157 P.3d 888\nPENOYAR, J.\n\xc2\xb6 1 The Trustee of a consolidated trust, Ralph A. Riddell, appeals the trial court\'s\ndenial of his motion to modify the trust and create a special needs trust on behalf of a trust\nbeneficiary, his daughter, Nancy I. Dexter, who suffers from schizophrenia affective disorder\nand bipolar disorder. Ralph\'s deceased father and mother each established a trust. The trusts\nwere consolidated by the court. Upon Ralph\'s death, the trust will terminate and Nancy will\nreceive payment of her portion of the trust proceeds. Ralph argues that the trial court has\nthe power to modify the trust; that his daughter\'s disabilities are a changed and unanticipated\ncondition; and that the purpose of the settlor will be preserved through the modification. We\nagree and remand to the trial court to reconsider an equitable deviation in light of changed\ncircumstances and the settlors\' intent that the beneficiaries receive both medical care and\ngeneral support from the trust\'s funds.\nFACTS\n\xc2\xb6 2 George X. Riddell and Irene A. Riddell were husband and wife with one child,\nRalph. George\'s Last Will and Testament left the residue of his estate in trust for the benefit\nof his wife, his son, his daughter-in-law, and his grandchildren. George also created an\nadditional trust (the Life Insurance Trust) for their benefit. Irene\'s Last Will and Testament\nleft the residue of her estate in trust for the benefit of her son; her son\'s wife, Beverly\nRiddell; and her grandchildren.\n\xc2\xb6 3 The trusts contained a provision in which, upon the death of Ralph and Beverly,\nGeorge and Irene\'s grandchildren would receive the trust\'s benefits until the age of thirtyfive when the trusts would terminate and the trustee would distribute the principal to the\ngrandchildren. Ralph is currently the Trustee. George and Irene are both deceased.\n187\n\n\x0c\xc2\xb6 4 Ralph and Beverly have two children, Donald H. Riddell and Nancy. Both\nDonald and Nancy are more than thirty-five years old. Donald is a practicing attorney and\nable to handle his own financial affairs. Nancy suffers from schizophrenia affective disorder\nand bipolar disorder; by 1991 she received extensive outpatient care; and by 1997 she moved\nto Western State Hospital. She is not expected to live independently for the remainder of her\nlife.\n\xc2\xb6 5 Both Ralph and Beverly are still living. Upon their death, the trusts will terminate\nbecause Nancy and Donald are both over the age of thirty-five; Nancy will receive her\nportion of her grandparents\' trust principal, which is approximately one half of $1,335,000.\n\xc2\xb6 6 The Trustee, Ralph, Ralph, filed a petition in superior court, asking the trial court\nto consolidate the trusts and to modify the trust to create a \xe2\x80\x9cspecial needs\xe2\x80\x9d trust on Nancy\'s\nbehalf, instead of distributing the trust principal to her. Clerk\'s Papers (CP) at 4. He\nexplained that, under the current trust, when her parents die, Nancy\'s portion of the\nprincipal will be distributed to her and the trust will terminate. He argued that a special needs\ntrust is necessary because, upon distribution, Nancy\'s trust funds would either be seized by\nthe State of Washington to pay her extraordinary medical bills or Nancy would manage the\nfunds poorly due to her mental illness and lack of judgment. He argued that the modification\nwould preserve and properly manage Nancy\'s funds for her benefit.\n\xc2\xb6 7 The trial court granted the motion to consolidate the trusts but denied the\nmotion to modify. It stated that it did not have the power to modify the trust unless\nunanticipated events existed that were unknown to the trust creator that would result in\ndefeating the trust\'s purpose. The trial court found that the trust\'s purpose was \xe2\x80\x9cto provide\nfor the education, support, maintenance, and medical care of the beneficiaries\xe2\x80\x9d and that a\nmodification would only \xe2\x80\x9cpermit[ ] the family to immunize itself financially from\nreimbursing the State for costs of [Nancy\'s medical] care.\xe2\x80\x9d CP at 54, Report of Proceedings\n(RP) at 4. Relying on the Restatement (Second) of Trusts, it stated that it would not allow a\nmodification \xe2\x80\x9cmerely because a change would be more advantageous to the beneficiaries.\xe2\x80\x9d\nCP at 53; Restatement (Second) of Trusts \xc2\xa7 66(1) cmt. b (2001). It did not issue factual\nfindings or legal conclusions with its order but incorporated its reasoning from its oral ruling\ninto the order.\n\xc2\xb6 8 Ralph moved for reconsideration, arguing that the Trust and Dispute Resolution\nAct, chapter 11.96A RCW (TEDRA) and the Restatement (Third) gave the trial court\n188\n\n\x0cplenary power to handle all trusts and trust matters and the authority to modify the\nconsolidated trust into a special needs trust. Ralph argued that, because the grandparents\ndirected the trust proceeds to be distributed to their grandchildren when they reach the age\nof thirty-five, the settlors intended that their grandchildren attain a level of responsibility,\nstability, and maturity to handle the funds before receiving the distribution. He also argued\nthat due to Nancy\'s mental illness, allowing a distribution to her would defeat the settlors\'\nintent and the trust\'s purpose.\n\xc2\xb6 9 The trial court denied the motion for reconsideration. It again issued no factual\nfindings or legal conclusions, but it stated that its decision was based on the findings and\nconclusions articulated in its oral ruling on the motion for reconsideration. On\nreconsideration, the trial court agreed that the Restatement (Third) of Trusts-allowed the\ncourt to modify an administrative or distributive protection of a trust if, because of\ncircumstances the settlor did not anticipate, the modification or deviation would further the\ntrust\'s purpose. It then stated:\nI believe that there is a showing here that there is a circumstance that was,\nperhaps, not anticipated by the original settler [sic]; however, the purpose of the\ntrust is to provide for the general support and medical needs of the beneficiaries.\nI think that modifying the trust in a fashion that makes some of those assets less\navailable for that purpose than they would be under the express language of the\ntrust presently is not consistent with the purpose of the trust.\nCP at 107. The trial court reasoned that because the trust was written to provide for\n\xe2\x80\x9cmedical care\xe2\x80\x9d and because creating a special needs trust would make some money\nunavailable for medical care expenses, the modification was inconsistent with the trust\'s\npurpose. CP at 101. Ralph now appeals.\nANALYSIS\nI. STANDARD OF REVIEW\n\xc2\xb6 10 Ralph contends that the standard of review in this case is de novo. He is\npartially correct. Whether equitable relief is appropriate, or whether the trial court should\nhave modified the trust, is a question of law, which we review de novo. Niemann v. Vaugh\nCmty. Church, 154 Wash.2d 365, 374, 113 P.3d 463 (2005)(citing Puget Sound Nat\xe2\x80\x99l Bank of\nTacoma v. Easterday, 56 Wash. 2d 937, 943, 350 P.2d 444 (1960); Townsend v. Charles\nSchalkenbach Home for Boys, Inc., 33 Wash.2d 255, 205 P.2d 345 (1949).\n189\n\n\x0c\xc2\xb6 11 But determining the parties\' intent in regard to a trust is a factual question. We\nreview findings of fact under a substantial evidence standard, determining whether the\nevidence was sufficient to persuade a rational fair-minded person the premise is true.\nWenatchee Sportsmen Ass\xe2\x80\x99n v. Chelan County, 141 Wash.2d 169, 176, 4 P.3d 123 (2000). If this\nstandard is satisfied, we will not substitute our judgment for that of the trial court even\nthough we may resolve a factual dispute differently. Croton Chem. Corp. v. Birkewald, Inc., 50\nWash.2d 684, 314 P.2d 622 (1957). Therefore, this case presents a mixed question of law and\nfact. We give deference to the trial court\'s factual findings in regard to the trust, but we\nreview the trial court\'s decision to deny equitable relief and not modify the trust de novo.\nNiemann, 154 Wash.2d at 375, 113 P.3d 463.\nII. TRUST MODIFICATION\n\xc2\xb6 12 Ralph asserts that the trial court had the authority to modify the trust under\nboth the equitable deviation doctrine and under the plenary power granted by TEDRA.\nTEDRA states that it is the Legislature\'s intent to give courts full and ample power to\nadminister and settle all trust matters. RCW 11.96A.02. On reconsideration, the trial court\nagreed that it possessed the power to modify a trust. It stated that it could modify an\nadministrative or distributive protection of a trust if, because of circumstances the settlor\nhad not anticipated if the modification would further the trust\'s purpose. The trial court\nunderstood that it possessed the ability to modify the trust.\n\xc2\xb6 13 Next, Ralph contends that the trial court erred in declining to modify the trust.\nHe explains that a modification would further the trust\'s purpose because, if George and\nIrene had anticipated that Nancy would suffer debilitating mental illness requiring\nextraordinary levels of medical costs and make her incapable of managing her money\nindependently, they would not have structured the trust to leave a substantial outright\ndistribution of the trust principal to her. He contends that the settlors instead would have\nestablished a special needs trust to protect the funds because Nancy\'s medical bills would be\nextraordinary and covered by state funding.\n\xc2\xb6 14 Ralph explains that the settlors conditioned the distribution of trust assets on\nher being at least thirty-five years old, indicating that they intended that their grandchildren\nhave a level of maturity and stability before receiving the trust distribution. Ralph asserts that\ngiven Nancy\'s medical conditions and inability to handle her finances independently, she will\nnever attain a level of maturity to handle the distribution of funds; therefore a special needs\n190\n\n\x0ctrust is appropriate.\n\xc2\xb6 15 Niemann is very instructive in this case. In Niemann, our Supreme Court held that\ntrial courts may use \xe2\x80\x9cequitable deviation\xe2\x80\x9d to make changes in the manner in which a trust is\ncarried out. Niemann, 154 Wash.2d at 378, 113 P.3d 463. The court outlined the two prong\napproach of \xe2\x80\x9cequitable deviation\xe2\x80\x9d used to determine if modification is appropriate. Niemann,\n154 Wash.2d at 378, 113 P.3d 463. The court \xe2\x80\x9cmay modify an administrative or distributive\nprovision of a trust, or direct or permit the trustee to deviate from an administrative or\ndistributive provision, if [ (1) ] because of circumstances not anticipated by the settlor [ (2) ]\nthe modification or deviation will further the purposes of the trust.\xe2\x80\x9d (Niemann, 154 Wash.2d\nat 381, 113 P.3d 463. Restatement (Third) of Trusts \xc2\xa7 66(1) (2001).) In Niemann, the court\nadopted the Restatement (Third) of Trusts and noted that the Restatement (Third) requires a\nlower threshold finding than the older Restatement and gives courts broader discretion in\npermitting deviation of a trust. Niemann, 154 Wash.2d at 381, 113 P.3d 463.\n\xc2\xb6 16 The first prong of the equitable deviation test is satisfied if circumstances have\nchanged since the trust\'s creation or if the settlor was unaware of circumstances when the\ntrust was established. Restatement (Third) of Trusts \xc2\xa7 66 cmt. a (2001). Upon a finding of\nunanticipated circumstances, the trial court must determine if a modification would tend to\nadvance the trust purposes; this inquiry is likely to involve a subjective process of attempting\nto infer the relevant purpose of a trust from the general tenor of its provisions. Restatement\n(Third) of Trusts \xc2\xa7 66 (cmt. b (2001).\n\xc2\xb6 17 The reason to modify is to give effect to the settlor\'s intent had the circumstances\nin question been anticipated. Restatement (Third) of Trusts \xc2\xa7 66 cmt. a (2001). Courts will\nnot ordinarily deviate from the provisions outlined by the trust creator but they undoubtedly\nhave the power to do so, if it is reasonably necessary to effectuate the trust\'s primary purpose.\nNiemann, 154 Wash.2d at 382, 113 P.3d 463. A trust settlor may possess a myriad of\nintentions in settling a trust, but the trial court must concern itself with their primary\nobjective. Niemann, 154 Wash.2d at 382, 113 P.3d 463.\n\xc2\xb6 18 As stated above, we defer to the trial court\'s factual findings. Niemann, 154\nWash.2d at 375, 113 P.3d 463. In this case, the trial court did not issue formal factual\nfindings, but it stated in the oral ruling that there was a showing of a changed circumstance\nin this case. This meets the first prong. The settlor\'s intent is also a factual question. Niemann,\n154 Wash.2d at 374-75, 113 P.3d 463. The trial court found in its oral ruling that the \xe2\x80\x9cstated\xe2\x80\x9d\n191\n\n\x0cpurpose of the trust is to provide for the beneficiaries\' education, support, maintenance, and\nmedical care. CP at 54. Thus, it found that this trust\'s primary purpose was to provide for\nNancy during her lifetime. Because the trust was to terminate at age thirty-five, it was also\nthe settlors\' intent that Nancy have the money to dispose of as she saw fit, which would\ninclude any estate planning that she might choose to do.\n\xc2\xb6 19 There is no question that changed circumstances have intervened to frustrate\nthe settlors\' intent. Nancy\'s grandparents intended that she have the funds to use as she saw\nfit. Not only is Nancy unable to manage the funds or to pass them to her son, but there is a\ngreat likelihood that the funds will be lost to the State for her medical care. It is clear that the\nsettlors would have wanted a different result.\n\xc2\xb6 20 In 1993, as part of the Omnibus Budget Reconciliation Act, Congress set forth\na requirement for creating special needs trusts (or supplemental trusts), intended to care for\nthe needs of persons with disabilities and preserve government benefits eligibility while\nallowing families to provide for the supplemental needs of a disabled person that\ngovernment assistance does not provide. Marla B. Karus, Special Issue: Special Needs Children in\nthe Family Court, 43 FAM. CT. REV. 607, 610 (Oct.2005) (emphasis removed). The Act\nexempted certain assets from those assets and resources counted for the purposes of\ndetermining an individual\'s eligibility for government assistance. Pub.L. 103-06, \xc2\xa7 13611(b),\ncodified at 42 U.S.C. \xc2\xa7 1396p(d)(4)(A). A supplemental needs trust is a trust that is established\nfor the disabled person\'s benefit and that is intended to supplement public benefits without\nincreasing countable assets and resources so as to disqualify the individual from public\nbenefits. See Jill S. Gilbert, USING Trusts in Planning for Disabled Beneficiaries, Wisconsin\nLawyer (Feb.1997); Sullivan v. County of Suffolk, 174 F.3d 282, 284 (2nd cir. 1999).\n\xc2\xb6 21 In this case, the trial court was concerned with fashioning a trust for Nancy that\nwould allow the family to shield itself for \xe2\x80\x9creimbursing the State\xe2\x80\x9d for the costs of her\nmedical care due to her disability. RP at 4. But in 1993, Congress permitted the creation of\nspecial needs trusts in order to allow disabled persons to continue to receive governmental\nassistance for their medical care. Marla B. Karus, Special Issue: Special Needs Children in the\nFamily Court, 43 Fam. Ct. Rev. 607, 610 (Oct. 2005); Pub. L. 103-66, \xc2\xa7 13611(b), codified at\n42 U.S.C. \xc2\xa7 1396p(d)(4)(A). Special needs trusts were created in order to allow disabled\npersons to continue receiving governmental assistance for their medical care, while allowing\nextra funds for assistance the government did not provide. Given this legal backdrop, the\n192\n\n\x0ctrial court should not have considered any loss to the State in determining whether an\nequitable deviation is allowed. The law invites, rather than discourages, the creation of\nspecial needs trusts in just this sort of situation. The proper focus is on the settlors\' intent,\nthe changed circumstances, and what is equitable for these beneficiaries.\n\xc2\xb6 22 George and Irene both died without creating a special needs trust but did not\nknow of Nancy\'s mental health issues or how they might best be addressed. They clearly\nintended to establish a trust to provide for their grandchildren\'s general support, not solely\nfor extraordinary and unanticipated medical bills.\n\xc2\xb6 23 A special needs trust may be established by a third party or by the disabled\nperson that would be benefited by the trust. See Barbara A. Isenhour, Medicaid Eligibility for\nLong-Term Care Coverage and Special Needs Trusts, Isenhour Bleck, P.L.L.C. (Feb. 2006). Trusts\nestablished or funded by the disabled person are subject to 42 U.S.C. \xc2\xa7 1396p(d)(4)(A),\nwhich entitles the State to receive all remaining trust amounts upon trust termination for\nmedical assistance paid on behalf of the disabled beneficiary. See Clifton B. Kruse, Jr., Third\nParty and Self-Created Trusts Planning for the Elderly and Disabled Client, ABA Publishing (3rd\nEd.). However, the State is not entitled to receive payback upon termination of a third party\nspecial needs trust for medical assistance provided for the disabled beneficiary. See Barbara\nD. Jackins, Special Needs Trusts A Guide for Trustees Administration Manual (2005 Ed.). Here, the\ntrust was established and funded by George and Irene Riddell for the beneficiary Nancy\nDexter. It is a third party special needs trust. The trust is not subject to State assistance\npayback and is not required to have a payback provision.\n\xc2\xb6 24 We remand to the trial court to reconsider this matter and to order such\nequitable deviation as is consistent with the settlors\' intent in light of changed circumstances.\nClass Discussion Tool\nJuanita created a trust for the benefit of her two children, Wayne and Connie. The\nterms of the trust were as follows: \xe2\x80\x9cI leave my entire estate in trust for my two children,\nWayne and Connie. The purpose of the trust is to provide Wayne and Connie with a college\neducation and to provide support for them for life. After Wayne and Connie die, the\nproceeds of the trust are to be paid to my grandchildren, who are then living.\xe2\x80\x9d In 2005, after\nJuanita died, Corporate Trust assumed its role as trustee. At that time, Wayne was a\nfreshman in college. Connie had graduated from college with a degree in nursing. Connie\nhad two children, April and Robin. In 2007, Wayne was hit by a drunk driver while riding\n193\n\n\x0chis bicycle. As a consequence, Wayne suffered permanent brain damage. Connie was so\nangry that she shot and killed the drunk driver. Consequently, Connie was given life in\nprison. In 2011, Robin was diagnosed with kidney disease. Robin needs $100,000 to get her\nname place on the transplant list. Connie would like to have the trust modified to create a\nspecial needs trust for Wayne and to get the $100,000 that Connie\xe2\x80\x99s needs for treatment.\nWhat result?\n\n6.4\n\nRemoval of the Trustee\nAnother way to modify the trust is to have the trustee replaced. Courts are reluctant\n\nto substitute their judgment for the testator\xe2\x80\x99s judgment with regards to the trustee. This is\nespecially true where the trustee is an individual that has been specifically chosen by the\ntestator. Thus, courts will not remove a trustee unless it is for unfitness or other good cause.\n\nIn re the Matter of Trust Established by Baird, 204 P.3d 703\nJustice JIM RICE delivered the Opinion of the Court.\n\xc2\xb6 1 Donald Baird, the beneficiary of a trust established by his parents, petitioned the\nNinth Judicial District Court, Teton County, to remove N. Kay Goulet as trustee on the\ngrounds that she breached her fiduciary duties. Baird appeals the District Court\'s denial of\nhis petition. We affirm.\n\xc2\xb6 2 The issue presented is whether the District Court abused its discretion by\ndenying the beneficiary\'s petition to remove the Trustee of the Trust.\nFACTUAL AND PROCEDURAL BACKGROUND\n\xc2\xb6 3 On October 30, 1981, Allan and Catherine Baird (Trustors) signed a Trust\nAgreement establishing a trust for their son, Donald Baird (Baird). The Trust Agreement\nnamed Kay Goulet (then Kay Hagen), as trustee. The corpus of the trust consisted of real\nproperty, including a home, in Choteau, Montana, and mineral interests in Blaine County,\nMontana. The purpose of the Trust is to benefit and provide a home for Baird, and the\nremainder beneficiaries of the Trust are Goulet and Zina Druesdow, the designated\nsuccessor trustee. The Trust Agreement also indicated that certain real property in Great\nFalls was to be a part of the trust, but the property was never transferred into the Trust. It\nwas sold in 1989.\n\xc2\xb6 4 Donald Baird is one of the Trustors\' biological children, and Goulet was raised\nby them as a foster child. Donald Baird was hit by a train and suffered severe injuries in\n194\n\n\x0c1970. His mother, Catherine Baird, lived with him in the house on the trust property in\nChoteau until her death in January 2005.\n\xc2\xb6 5 In October 2005, Goulet petitioned the District Court seeking modification of\nthe Trust Agreement to allow her to sell the Trust property and invest the proceeds. She\nasserted that the Trust property in Choteau was dilapidated and dangerous, and that the\nTrust did not have the resources to maintain the house. Baird opposed the petition and\ncounter-petitioned the court to remove Goulet as Trustee and replace her with Druesdow,\nthe successor trustee. The District Court, Judge Buyske presiding, conducted a hearing on\nGoulet\'s modification petition and issued an order denying the petition in February 2006.\nThe court ruled that the Trust property was not in such a condition that it needed to be sold\nto preserve the corpus of the Trust or accomplish the purposes of the Trust.\n\xc2\xb6 6 In October 2007, the District Court, Judge McKinnon presiding, conducted a\nhearing on Baird\'s counter-petition to remove the Trustee, and thereafter issued an order\ndenying the petition. Additional facts will be discussed herein.\nSTANDARD OF REVIEW\n\xc2\xb6 7 \xe2\x80\x9cWe review a district court\'s findings of fact to determine whether they are\nclearly erroneous. We review a district court\'s conclusions of law to determine whether that\ncourt\'s interpretation of the law is correct.\xe2\x80\x9d In re Estate of Berthot, 2002 MT 277, \xc2\xb621, 312\nMont. 366, 59 P.3d 1080 citations omitted). As discussed below, we review a district court\'s\ndenial of a petition to remove a trustee under an abuse of discretion standard.\nDISCUSSION\n\xc2\xb6 8 Did the District Court abuse its discretion by denying the beneficiary\'s\npetition to remove the Trustee of the Trust?\n\xc2\xb6 9 Baird argues that the District Court should have removed Goulet as trustee for\nbreaching fiduciary duties because she (1) failed to provide Baird with an annual accounting,\n(2) did not pay the property tax and insurance premiums on the property and blocked Baird\nfrom paying the taxes, and (3) did not preserve the trust property and make it productive.\nThe parties argue over what grounds require removal of a trustee and whether a district\ncourt has any discretion in removing a trustee. Baird asserts that any breach of the Trust\nrequires removal and that the District Court did not have the authority or discretion to\ndetermine otherwise. Goulet argues that not every breach of the Trust requires removal and\nthe District Court had discretion to determine whether removal of the Trustee is\n195\n\n\x0cappropriate.\n\xc2\xb6 10 Section 72-33-618, MCA, states in part:\n(1) A trustee may be removed in accordance with the trust instrument or by the\ncourt on its own motion or on petition of a cotrustee or beneficiary.\n(2) The grounds for removal of a trustee by the court include the following:\n(a) if the trustee has committed a breach of the trust;\n(b) if the trustee is insolvent or otherwise unfit to administer the\ntrust;\n(c) if hostility or lack of cooperation among cotrustees impairs the\nadministration of the trust;\n(d) if the trustee fails or declines to act; or\n(e) for other good cause.\n\xc2\xb6 11 The official comments to \xc2\xa7 72-33-618, MCA, explain that this statute is based\nupon the Restatement (Second) of Trusts \xc2\xa7 107 (1959), the California Probate Code, and the\nTexas Trust Code. The comments in the Restatement (Second) of Trusts explain that a court\n\xe2\x80\x9cmay remove a trustee if his continuing to act as trustee would be detrimental to the\ninterests of the beneficiary. The matter is one for the exercise of reasonable discretion by the\ncourt.\xe2\x80\x9d Restatement (Second) of Trusts \xc2\xa7 107 cmt. a; see also Restatement (Second) of Trusts \xc2\xa7 37 cmt.\nd (2003) (\xe2\x80\x9cThe matter is largely left to the discretion of the trial court, but is subject to\nreview for abuse of discretion.\xe2\x80\x9d) We agree with these comments and will apply an abuse of\ndiscretion standard of review to examine a district court\'s denial of a request to remove a\ntrustee, in addition to reviewing findings of fact and conclusions of law under the usual\nstandards of review stated earlier herein.\n\xc2\xb6 12 Concerning the grounds for removal of a trustee, the official comments to \xc2\xa77233-618, MCA, refer to comment b of the Restatement (Second) of Trusts, which provides that\n\xe2\x80\x9cthe commission of a serious breach of trust\xe2\x80\x9d constitutes grounds for removal of a trustee.\nRestatement (Second) of Trusts \xc2\xa7 107 cmt. b. As suggested by the Restatement (Second) of Trusts \xc2\xa7 37\ncmt. e, this can include the \xe2\x80\x9crepeated or flagrant failure or delay in providing proper\ninformation or accountings to beneficiaries.\xe2\x80\x9d However, \xe2\x80\x9c[n]ot every breach of trust warrants\nremoval of the trustee ... but serious or repeated misconduct, even unconnected with the\ntrust itself, may justify removal.\xe2\x80\x9d Restatement (Second) of Trusts \xc2\xa7 37 cmt. e. Consistent with our\nrecognition that a district court possesses discretion in determining whether or not to\n196\n\n\x0cremove a trustee, we also conclude that not every breach of the trust requires removal of the\ntrustee as a matter of law, but is subject to the trial court\'s discretionary review. Upon these\nprinciples, we turn to Baird\'s challenges.\n\xc2\xb6 13 Baird challenges Goulet\'s failure to provide annual accountings. Both the Trust\nAgreement and statutory law require annual accountings. The Trust Agreement states that\nthe \xe2\x80\x9cTrustee shall keep books of accounts and shall render an annual accounting of the\nTrust to the Beneficiary.\xe2\x80\x9d Section 72-34-126, MCA, states that \xe2\x80\x9c[e]xcept as provided in 72\xe2\x80\x93\n34\xe2\x80\x93127, the trustee shall annually mail each income beneficiary an itemized statement of all\ncurrent receipts and disbursements of both principal and income.\xe2\x80\x9d None of the exceptions\nof \xc2\xa772-34-127, MCA, apply to this case.\n\xc2\xb6 14 The District Court found that Goulet had never provided an annual accounting\nto Baird, but accepted Goulet\'s argument, likewise made on appeal, that because the trust\nhad no income or disbursements, there was \xe2\x80\x9c nothing to account for.\xe2\x80\x9d In concluding that\ngood cause did not exist for Goulet\'s removal, the District Court reasoned that \xe2\x80\x9c[w]hile an\nannual accounting is required, there has been nothing in the trust except for the property for\nwhich to provide and [sic] accounting. The oil and gas leases are not income producing at\nthis time.\xe2\x80\x9d\n\xc2\xb6 15 Other states have reached similar conclusions. The Supreme Court of Iowa held\nthat failure to provide annual accountings does not always require removal of the trustee.\nSchildberg v. Schildberg, 461 N.W.2d 186 (Iowa 1990). In Schildberg the court recognized that the\ntrustee breached the trust by failing to provide annual reports. Schildberg v. Schildberg, 461\nN.W.2d at 191. Nonetheless, the court stated that \xe2\x80\x9c[t]here is no evidence to indicate that the\nomission to report resulted from a motive on the part of Dennis to take advantage of the\nbeneficiaries. Nor do we find evidence to suggest that the effectiveness of the trust has been\nimpaired, despite this technical violation, or that the intent of the settlor has been thwarted.\xe2\x80\x9d\nSchildberg v. Schildberg, 461 N.W.2d.\n\xc2\xb6 16 Similarly, the Supreme Court of Minnesota has upheld the denial of a petition to\nremove a trustee where the trustee failed to provide annual accountings. Matter of Gershow\xe2\x80\x99s\nWill, 261 N.W.2d 335, 340 (Minn. 1977) ( \xe2\x80\x9cWhile these important and necessary statutory\nprovisions requiring annual accounting were violated, the trial court did not abuse its\ndiscretion in failing to remove the trustee for inconsequential deviations from legal\nrequirements in the past.\xe2\x80\x9d).\n197\n\n\x0c\xc2\xb6 17 On this record, we conclude that the District Court did not abuse its discretion\nin determining not to remove Goulet as trustee for failure to file annual accountings.\nNonetheless, it should be emphasized that failing to file an annual accounting is a violation\nof the statute and the Trust Agreement. As a matter of course, annual accountings must be\ncompleted by the Trustee. The parties\' briefing disputes whether the Great Falls property\nreferenced above was part of the trust corpus, and whether its 1989 sale should have been\npart of an accounting. Although the District Court did not find this property to be part of\nthe trust, an annual accounting would have identified this issue long ago, and perhaps\nresolved the matter between the parties, instead of allowing it to linger for many years.\nFurther, the beneficiary is entitled to know whether there has been any activity with regard\nto the trust\'s mineral interests. Thus, we agree with the conclusion reached by the Gershow\ncourt: \xe2\x80\x9c[w]hile there are some deviations from the required statutory requirements in the\npreparation of these accounts, we are satisfied that, if they are corrected in the future, the\nrights of all parties can be adequately protected.\xe2\x80\x9d Matter of Gershow\xe2\x80\x99s Will, 261 N.W.2d at 340\n(quotation omitted). In the future, the Trustee is to file annual accountings for the Trust.\nThis will serve to protect the rights of the parties.\n\xc2\xb6 18 Baird also claimed in the District Court that Goulet should be removed as\nTrustee because she failed to pay insurance premiums and certain taxes in a timely manner.\nOn appeal, Baird does not dispute the District Court\'s conclusion that Goulet was not\nobligated to use her personal funds to pay the taxes and insurance premiums, but challenges\nGoulet\'s interference with his attempts to pay the taxes himself.\n\xc2\xb6 19 The record shows that between the first and second hearings in this case the\nparties disagreed as to whom the county should send the tax statements. At the hearing,\nGoulet testified that as Trustee she should receive the tax statements but has no problem\nwith letting Baird pay the taxes. After the hearing, the District Court entered an order\nallowing Baird to pay taxes on the property. Thus, the issue of whether Baird may pay the\ntaxes is settled, and neither party challenges it. Goulet\'s interference with Baird\'s efforts to\npay taxes was temporary, apparently done in good faith, and does not require a conclusion\nthat the District Court\'s resolution was an abuse of discretion.\n\xc2\xb6 20 Baird raises several other issues that do not merit a detailed discussion. Baird\nchallenges several factual findings, but he has not established that they were clearly\nerroneous. Also, Baird asserts that the District Court should have removed Goulet for\n198\n\n\x0cfailure to preserve the trust property and make it productive by being unaware of mineral\ninterests in the trust. However, Baird has not factually demonstrated an error by Goulet\nnecessitating her removal.\n\xc2\xb6 21 We conclude that the District Court, after considering all of Baird\'s claims, did\nnot abuse its discretion by denying his request to remove Goulet as Trustee.\n\xc2\xb6 22 Affirmed.\nNotes, Questions and Problems\n1. The court will not remove a trustee simply because he has a dispute with the beneficiary\nof the trustee. Moreover, the trustee usually will not remove a trustee because he is a bad\nactor unless his behavior negatively impacts the beneficiary.\n2. When a beneficiary sues the trustee claiming a breach of trust, the trustee\xe2\x80\x99s attorney fees\nare paid out of the trust funds. If there is bad blood between a beneficiary and a trustee, the\nbeneficiary might constantly challenge the trustee\xe2\x80\x99s actions. In that case, most of the trust\nfunds could end up in the hands of attorneys. Would it make sense to permit the court to\nremove a trustee for having irreconcilable differences with the beneficiary?\n3. Problems\nIf which of the following cases might the court remove the trustee?\na). Jackson, a former slave, established a trust for the benefit of his children. After Jackson\ndied, Main Bank assumed its role as trustee. A few years later, Main Bank was acquired by\nNew Bank. Jackson\xe2\x80\x99s children found out that New Bank is suspected of financing the\ngenocide in Dafur,\nb). Albert established a trust for the benefit of his grandchildren. After Albert died Zelda\nassumed her role as trustee. A few years later, Zelda started having financial problems and\nhad to file bankruptcy.\nc) Yolanda established a discretionary support trust for the benefit of her sisters, Kelly and\nTiffany. After Yolanda died, Peyton assumed his role as trustee. A few years later, Peyton\nstarted having an affair with Kelly.\nd) Velma established a trust for the benefit of her nieces and nephew. After Velma died, Otis\nassumed his role as trustee. A few years later, Otis became a tax protester and refused to pay\n199\n\n\x0chis state and federal taxes.\n\n200\n\n\x0cChapter 7 - Creation and\nModification of Charitable Trusts\nIn order to create a charitable trust the testator must satisfy all of the requirements to\ncreate a private trust (intent, beneficiaries, res and writing) and intend for the trust to be used\nfor a charitable purpose. Courts have more flexibility when it comes to modifying the terms\nof a charitable trust. In some cases, courts can even repurpose the funds in the trust.\n\n7.1\n\nCreation of the Charitable Trust\nTo qualify as a charitable trust, the trust must have a valid charitable purpose that\n\nbenefits an indefinite class of persons. Charitable purposes include: (1) the relief of poverty;\n(2) the advancement of education; (3) the advancement of religion; (4) the promotion of\nhealth; (5) government or municipal purposes; and (6) other purposes the accomplishment\nof which is beneficial to the community.\nProblems\nWhich of the following trusts have a charitable purpose?\na). A trust to establish a museum to display the love letters the settlor wrote to his wife.\nb). A trust to conduct stem cell research.\nc). A trust to provide gym memberships to residents that are at least fifty pounds overweight.\nd). A trust to plant a community garden.\ne) A trust to build a house for the minister of a church.\nf) A trust to send the members of a church choir on an annual vacation.\ng) A trust to pay the salary of a law professor.\nh) A trust to send Tina to college if she promises to teach in the testator\xe2\x80\x99s hometown.\n\nMarsh v. The Frost National Bank, 129 S.W.2d 174\nOpinion by Justice Rodriguez.\nThis is a declaratory judgment action. Appellants, Anna Spohn Welch Marsh, Noel\nMarsh, and Holly McKee, appeal from a probate order that modified a provision in the will\nof Charles Vartan Walker, deceased. Appellants raise four issues on appeal: (1) whether the\ntrial court properly applied the cy pres doctrine to reform a will provision and (2) whether the\ntrial court correctly ruled that tract 3 with its associated income, rather than the proceeds of\n201\n\n\x0cthe sale of that land, should be conveyed to the charitable beneficiary based on the cy pres\nreformation; We reverse and remand.\nI. Factual Background\nCharles Walker died on March 13, 2000, leaving a holographic will. The will named\nappellee, Frost National Bank (Frost Bank), as independent executor. On July 11, 2000,\nFrost Bank filed an original petition for declaratory judgment for clarification of several\nprobate matters including the construction of Article V of the Charles Walker will, the\nprovision at issue in this appeal. Article V reads in relevant part:\nI hereby direct my Executor to sell tract 3 of the V.M. Donigan 456.80\nPartition for cash and to invest the proceeds in safe and secure tax-free U.S.\ngovernment bonds or insured tax-free municipal bonds. This trust is to be\ncalled the James Madison Fund to honor our fourth President, the Father of\nthe Constitution. The ultimate purpose of this fund is to provide a million\ndollar trust fund for every American 18 years or older. At 6% compound\ninterest and a starting figure of $1,000,000.00, it would take approximately 346\nyears to provide enough money to do this. My executor will head the Board of\nTrustees.... When the Fund reaches $15,000,000 my Executor\'s function will\ncease, and the money will be turned over to the Sec. of the Treasury for\nmanagement by the federal government. The President of the U.S., the Vice\nPresident of the U.S., and the Speaker of the U.S. House of Representatives\nshall be permanent Trustees of the Fund. The Congress of the United States\nshall make the final rules and regulations as to how the money will be\ndistributed. No one shall be denied their share because of race, religion, marital\nstatus, sexual preference, or the amount of their wealth or lack thereof....\nAppellants filed an answer to the petition for declaratory judgment alleging that\nArticle V of the will is void under the rule against perpetuities. Appellee, John Cornyn, Texas\nAttorney General, intervened in this action pursuant to section 123.002 of the Texas\nProperty Code alleging that a general charitable intent could be found and that Article V of\nthe will created a charitable trust. See Tex. Prop. Code Ann. \xc2\xa7 123.002 (Vernon 1995). The\nAttorney General then moved for the application of the cy pres doctrine to Article V. After a\nhearing on this issue, the trial court found in relevant part that: (1) the will evidenced a\n202\n\n\x0cgeneral charitable intent; (2) Article V of the will established a valid charitable trust not\nsubject to the rule against perpetuities; (3) the Attorney General\'s request to have the court\nexercise its cy pres powers should be granted; and (4) attorney\'s fees should be awarded to the\nAttorney General. The order was signed with the modification of the trust and charitable\nbeneficiary to be determined after a second hearing. The second hearing was held before a\ndifferent judge. After reconsidering the previous order, the second judge confirmed and\nratified that order and signed a final judgment establishing the modifications of Article V.\nThis appeal ensued.\nII. Interpretation of Article V\nIn their first issue, appellants argue that Article V does not show a charitable intent\nand therefore is not subject to reformation under the cy pres doctrine. Furthermore,\nappellants argue that because Article V violates the rule against perpetuities and cannot be\nlegally reformed, it is void, and the proceeds of the land that would fund the trust should\npass through intestate succession.\nIn Texas, under the rule against perpetuities, an interest is not good unless it must\nvest, if at all, not later than twenty-one years after some life in being at the time of the\ncreation of the interest, plus a period of gestation. Id. \xc2\xa7 112.036; see Foshee v. Republic Nat\xe2\x80\x99l\nBank, 617 S.W.2d 675, 677 (Tex. 1981). Both perpetual trusts and trusts for an indefinite\nduration violate the rule against perpetuities and are void. Atkinson v. Kettler, 372 S.W.2d 704,\n711 (Tex. Civ. App.-Dallas 1963), aff\'d, 383 S.W.2d 557 (Tex. 1964). The rule against\nperpetuities does not, however, apply to charitable trusts. See Tex. Prop. Code Ann. . \xc2\xa7\n112.036 (Vernon 1995); Foshee, 617 S.W.2d at 677. Therefore, we must first address whether\nArticle V of the will establishes a trust for a charitable purpose.\nWhether or not a given purpose is \xe2\x80\x9ccharitable\xe2\x80\x9d is a question of law for the court to\ndecide. Frost Nat\xe2\x80\x99l Bank v. Boyd., 188 S.W.2d 199, 206 (Tex. Civ. App.-San Antonio 1945),\naff\'d, 145 Tex. 206, 196 S.W.2d 497 (1946). When an issue turns on a pure question of law,\nwe apply a de novo standard of review, Tenet Health Ltd. V. Zamora, 13 S.W.3d 464, 468\n(Tex. App.-Corpus Christi 2000, pet. dism\xe2\x80\x99d w.o.i. (citing State v. Heal, 917 S.W.2d 6,9 (Tex.\n1996), and we are not obligated to give any deference to legal conclusions reached by the\ntrial court Id. at 468-69.\n\n203\n\n\x0cWhere the question of whether a given purpose is or is not charitable arises, the\nwords \xe2\x80\x9ccharitable purpose\xe2\x80\x9d have a definite ascertainable meaning in law, and a judicial\ndetermination may be made with satisfactory certainty in every case. See Boyd v. Frost Nat\xe2\x80\x99l\nBank, 145 Tex. 206, 196 S.W.2d 497, 501-03 (1946). Legal concepts of what are \xe2\x80\x9ccharitable\npurposes\xe2\x80\x9d are categorized in section 368 of the Restatement Second of Trusts. Id. at 502,\nSection 368 provides as follows:\nCharitable purposes include (a) the relief of poverty; (b) the advancement of\neducation; (c) the advancement of religion; (d) the promotion of health; (e)\ngovernmental or municipal purposes; (f) other purposes the accomplishment\nof which is beneficial to the community.\nRestatement (Second) of Trusts \xc2\xa7 368 (1959); see Boyd., 196 S.W.2d at 502.\nArticle V of the will clearly states that the purpose of the fund is to provide a million\ndollar trust fund for every American eighteen years or older with no one being denied his\nshare due to race, religion, marital status, sexual preference, or the amount of his wealth.\nThus, it is clear from the language of Article V that if the purpose is to be found charitable,\nit must fall under the broad category (f) of section 368 of the Restatement; other purposes\nthe accomplishment of which is beneficial to the community. Restatement (Second) of\nTrusts \xc2\xa7 368 (1959). To be included in category (f), the purpose set out in Article V must go\nbeyond merely providing financial enrichment to the individual members of the community;\nthe purpose must promote the social interest of the community as a whole. See Restatement\n(Second) of Trusts \xc2\xa7 374 cmt. a, f (1959). The Restatement provides this Court with the\nfollowing illustration applicable to the facts of this case:\n[I]f a large sum of money is given in trust to apply the income each year in\npaying a certain sum to every inhabitant of a city, whether rich or poor, the\ntrust is not charitable, since although each inhabitant may receive a benefit,\nthe social interest of the community as such is not thereby promoted.\nId. \xc2\xa7 374 cmt. f. Furthermore, trusts created to distribute money out of liberality or\ngenerosity, without regard to the need of the donees and the effect of the gifts, do not have\nthe requisite public benefit necessary to a charity. See G. Bogart, The Law of Trusts and\nTrustees \xc2\xa7 379 (1991). With these concepts in mind, we analyze Article V.\n204\n\n\x0cCharles Walker expressly states in Article V that \xe2\x80\x9c[t]he ultimate purpose of this fund\nis to provide a million dollar trust fund for every American 18 years or older.\xe2\x80\x9d From this\nlanguage, it is obvious Walker intended nothing more than to financially enrich the American\npublic. While this act is generous and benevolent, it is not necessarily beneficial to the\ncommunity. There is no evidence referenced or argument made by appellees to persuade us\nthat the effect of the trust contemplated by Walker would promote the social interest of the\ncommunity. See Restatement (Second) of Trusts \xc2\xa7 374 cmt. a (1959). Article V does not place\nrestrictions or limitations on the beneficiaries of the trust, which would allow them to use\nthe funds for any purpose, whether it be one that benefits the community or one that\nburdens it. The trust would provide a personal, individual benefit to each beneficiary but\nwould fail to promote the social interest of the community as a whole. See id. \xc2\xa7 374 cmt. a, f.\nFurthermore, the trust is established without regard to the need of the beneficiaries or the\neffect of the trust and as a result lacks the requisite public benefit necessary to a charity. See\nG. Bogart, The Law of Trusts and Trustees \xc2\xa7 379 (1991). The trust created by Walker is\nnothing more than a generous distribution of money with no contemplation or recognition\nof public benefit. We conclude the trust established by Walker is devoid of any charitable\nintent or purpose and is therefore not charitable as defined by law.\nAppellees argue that Texas courts have a long history of favoring charitable bequests\nand use liberal rules of construction to fulfill the intent of the testator. They also urge that\nwhere a bequest is open to two constructions, the interpretation that gives the charity effect\nshould be adopted, and that which will defeat the charity should be rejected. In support of\ntheir arguments, appellees cite Boyd; Blocker v. State, 718 S.W.2d 409 (Tex. App.-Houston [1st\nDist.] 1986, write ref\xe2\x80\x99d. n.r.e.); Taysum v. El Paso Nat\xe2\x80\x99l Bank, 256 S.W.2d 172 (Tex. Civ. App.El Paso 1952, writ ref\xe2\x80\x99d; and Eldridge v. Marshall Nat\xe2\x80\x99l Bank, 527 S.W.2d 222 (Tex. Civ. App.Houston [14th Dist.] 1975, writ. ref\xe2\x80\x99d n.r.e.). We agree with appellees\' contentions and the\ncases cited in support thereof. However, we find these cases distinguishable and the specific\npropositions stated inapplicable. In the cases cited, the courts, after finding an existing\ncharitable intent as defined by law, used liberal rules of construction to sustain the charitable\ntrust. In this case, however, we find no charitable intent or purpose. Therefore, these rules of\nlaw do not apply. Appellees would have us use these rules to create a charitable intent where\nnone exists. We decline to do so.\n205\n\n\x0cHaving concluded Article V of the will does not establish a charitable trust, the rule\nagainst perpetuities is applicable. In this case, the trust is of indefinite duration and therefore\nviolates the rule against perpetuities. See Atkinson, 372 S.W.2d at 711. Accordingly, appellants\'\nfirst issue is sustained.\nIII. Reformation of Noncharitable Trusts\nWhen a noncharitable trust is in violation of the rule against perpetuities, a trial court\nis authorized to reform the trust pursuant to section 5.043 of the Texas Property Code Tex.\nProb. Code Ann \xc2\xa7 5.043(b) (Vernon Supp.2004). (Vernon Supp.2004). A court has the\npower to reform or construe the trust according to the doctrine of cy pres by giving effect to\nthe general intent of the testator within the limits of the rule. Id., section 5.043 (b). It is clear\nfrom the language in Article V that Walker\'s general intent in creating the trust was to\nfinancially enrich the American public. Therefore, application of section 5.043 requires the\ncourt to reform or construe Article V within the limits of the rule against perpetuities and\nconsistent with this intent. If reformation is not possible however, the trust is void as being\nin violation of the rule.\nAppellants contend in their second issue that the court erred in not selling tract 3 of\nthe V.M. Donigan 456.80 partition for cash as stated in Article V. Because of the disposition\nof appellants\' first issue, we need not address their second issue. However, as noted above,\nreformation under section 5.043, if possible, provides for the court to give effect to the\ngeneral intent and specific directives of the creator. Tex. Prob. Code Ann \xc2\xa7 5.043(b) (Vernon\nSupp.2004). The selling of the land provided for under Article V would constitute a specific\ndirective and should be given effect in any reformation contemplated by the court.\nTherefore, we remand this case to the trial court to consider the feasibility of\nreformation of Article V under section 5.043.\nIV. Conclusion\nAccordingly, we reverse the trial court\'s judgment to the extent it established a\ncharitable trust and remand this case for further proceedings consistent with this opinion.\nWe also reverse the trial court\'s award of attorney\'s fees and remand this issue to the trial\ncourt for further consideration.\n\n206\n\n\x0c7.2\n\nModification/Cy Pres\nIf property is given in trust to be applied to a particular charitable purpose and it is\n\nor becomes impossible, impracticable or illegal to carry out the particular purpose, and if the\ntestator manifested a more general intention to devote the property to charitable purposes,\nthe trust will not fail but the court will rely on the cy pres doctrine to direct the application\nof the property to some charitable purpose which falls within the general intention of the\ntestator. The three main questions that must be resolved to determine if cy pres is\nappropriate are the following: 1) Can the original charitable purpose be fulfilled?; 2) Did the\ntestator have a general charitable purpose in mind?; and 3) Will that purpose be carried out\nby permitting the modification?\n\nPetition of Pierce, 136 A.2d 510\nDUBORD, Justice.\nThis case is before us upon petition of Lillian S. Sturgis, trustee under the will of\nJoseph How, asking for a new construction of the will and for instructions concerning the\nadministering of the trust fund under the cy pres doctrine.\nThe administration of an estate is usually a prosaic procedure. However, the history\nof this case, throughout the eighty-seven years which have elapsed since the death of Joseph\nHow, is most interesting and presents a set of facts, which one might expect to find in a\nromantic novel, rather than in the true story of an estate, the assets of which, at the outset\nand for more than forty years, were considered too small to be worth-while, and which have\nnow grown to a value too large to permit of the administration of the trust in accordance\nwith the seeming directions of the testator.\nThe testator, Joseph How, was a man of the sea. He was master of the bark known\nas the Ellen Stevens. Records indicate that he was commissioned master in 1862 and his\nname appears as captain of this bark in 1869. For the benefit of the uninitiated, a bark is\ndescribed in Webster\'s unabridged dictionary as a three-masted vessel having her foremast\nand mainmast, square-rigged, and her mizzenmast fore-and-aft rigged. Joseph How was born\non July 22, 1820 and died on October 26, 1870. His home was in Portland and he is buried\nthere.\nOn October 25, 1870, just the day before his death, he executed his last will and\n207\n\n\x0ctestament.\nUnder the first paragraph of this will he bequeathed the possession and use of all his\npersonal property, including money, bonds, vessels, choses in action and furniture to his\nwife, Alice W. How. By the second paragraph he bequeathed to his wife the income from all\nof any real estate of which he may have been seized. Under the provisions of the third\nparagraph he directed that his real estate as well as his interest in the bark, \xe2\x80\x98Eben Stevens,\xe2\x80\x99 be\nsold and that the proceeds of said sale be invested and the income from said investment paid\nto his wife, for and during her natural life.\nAt this point it may be well to point out, that the record copy of the will as we have\nit, describes his ship as the \xe2\x80\x98Eben Stevens.\xe2\x80\x99 This may be a typographical error. The correct\nname of the shop was the \xe2\x80\x98Ellen Stevens\' as indicated by records of the American Ship\nMasters\' Association. However, this discrepancy is of no moment at this particular time.\nUnder the provisions of the fourth paragraph of his will, he directed that at the\ndecease of his wife, his executor should pay the entire income to his mother, Eliza How, if\nshe should then be living, for and during her life, and in cash his mother should not be\nliving, then the income was to be paid to his brother, James L. How, for and during his\nnatural life.\nThe record in the case does not give us the information, but it is assumed that these\ndirections on the part of the testator were carried out.\nThe controversy now before us, arises under the fifth paragraph of the will which\nreads as follows:\n\xe2\x80\x98I request and direct that after the decease of my said wife, mother and brother,\nmy said estate, real and personal shall be appropriated to the founding of a home\nfor indigent seamen, and I authorize and empower my executor to invest the said\nproperty and the income thereof and to use and employ the same in such\nmanner as will do the most good to the class of indigent seamen.\xe2\x80\x99\nThe will was filed in the Probate Court within and for the County of Cumberland\nand on the third Tuesday of November, 1870 duly allowed. The executor named in the will,\nJames P. Baxter, was appointed. He later resigned, and on June 15, 1875, Lewis Pierce was\nappointed administrator de bonis non with the will annexed.\n208\n\n\x0cThe inventory shows that the entire value of the estate was only about $1,500. There\nis nothing in the record to indicate how long the widow lived, nor when the mother or the\nbrother named in the will, as contingent beneficiaries, died. All we know is that the matter\nremained in abeyance until at the April Term, 1912 of the Supreme Judicial Court for\nCumberland County, a bill in equity was filed by Lewis Pierce, the administrator, asking the\nCourt to construe the fifth paragraph of the will and to determine the ownership of the\nassets in the estate. This bill was reported to the Law Court for determination upon bill and\nanswer.\nIt was contended by the heirs at law, that the attempted trust under consideration\nhad failed, both for indefiniteness and because the amount available was so small as to\nrender it impossible to carry out the provisions of the trust even if one were created.\nIn an opinion dated November 15, 1912, written by then Associate Justice Cornish,\nlater to become Chief Justice, this Court held that the bequest constituted a good public\ncharitable trust. The opinion provided that a trustee appointed to administer this trust was to\ninvest the residuum of the estate and employ the income for the benefit of indigent seamen.\nIt was stated that the trustee could do this directly, or he could turn over the income to some\nworthy society or association organized for that purpose. The manner in which the money\nwas to be expended was left to the sitting Justice who was to determine to whom the income\nshould be paid and through what channel this kindly gift could be made most effective. This\ncase is reported in 109 Me. 509, 84A. 1070.\nAlthough the mandate of the Law Court directed that a decree should be entered in\naccordance with its opinion, no such decree was written and again the matter remained in\nabeyance for a long period of years. Eventually this case was dismissed from the docket. For\ntwenty-five years the estate was apparently forgotten, probably because the available amount\nwas too small to really be worth-while.\nNow we come to a very interesting part of the story. It appears that a short time\nbefore his death, Captain How had invested the reported amount of $3,000 in a new\ncorporation, which was then being organized by a friend of his in Chicago. Subsequent\ndevelopments indicate that the captain probably did not place must value upon this\ninvestment, and if the certificate representing his stock ownership in this corporation ever\ncame into the possession of the executor, administrator or trustee, they too probably felt\n209\n\n\x0cthere was little value attached to this item, as such poor care was given to the certificate that\nit became lost, misplaced or destroyed. However, the corporation which was engaged in the\nleather business prospered to an extent never dreamed of by its founder, and through a\nseries of stock dividends and accretions in value, the estate of Captain How now amounts to\nmore than $300,000, with more than $100,000 of income ready to be expended for the\npurposes provided for in his will.\nWhen the Court was apprised as to the situation, the case was restored to the docket\nand a decree, pursuant to the opinion of the Law Court in the Pierce case, to be found in\n109 Me. 509, 84 A. 1070, was entered nunc pro tunc on December 12, 1938, and this decree\nholds that the bequest contained in the fifth paragraph of the last will and testament of\nJoseph How is in its terms a good public charitable trust; that the purpose of this public\ncharitable trust is definite in its objects, is lawful and is to be regulated by the trustee of the\nestate of Joseph How, who has been or may be appointed and qualified in the Probate Court\nwithin and for the County of Cumberland. The trustee was ordered to invest the residuum\nof the trust fund and employ the income thereof for the benefit of indigent seamen, doing\nthis directly or turning over the income to some worthy society or association organized for\nthat purpose, but before so doing, the trustee was ordered to apply to a Justice of the\nSupreme Judicial Court for determination to whom and in what amounts the income should\nbe paid. On April 8, 1937, a trustee was appointed. He subsequently resigned, and on March\n8, 1944, Lillian S. Sturgis, the petitioner herein was appointed as successor trustee.\nOn December 29, 1954, Lillian S. Sturgis filed a petition in the Supreme Judicial\nCourt in Equity in Cumberland County in the name of Lewis Pierce, Administrator, asking\nthe Court to determine to whom and in what amounts the income of the trust estate should\nbe paid.\nOn July 16, 1956, the sitting Justice of the Supreme Judicial Court in Equity\ninstructed the trustee to pay to the Portland Seamen\'s Friend Society the amount of $10,000,\nto be used exclusively by it for assistance for the indigent, needy and destitute seamen, and\nfor no other purpose, this money to be expended under the supervision of the Attorney\nGeneral under the provisions of Section 4, Chapter 20, R.S.1954, which provides that the\nAttorney General shall enforce due application of funds given or appropriated to public\ncharities within the state and to prevent breaches of trust in the administration thereof.\n210\n\n\x0cOn August 13, 1956, the trustee filed another petition in the Supreme Judicial Court\nin Equity for a new construction of the will and for instructions concerning the\nadministering of the fund under the cy pres doctrine. It seems to have been assumed by all\nparties that the beneficiaries of the trust were supposed to be seamen of the class to which\nCaptain How belonged. Based upon this assumption, in her petition, she alleged that after\npaying the amount of $10,000 to the Portland Seamen\'s Friend Society, in accordance with\ndecree of Court, she still has income of over $100,000 in her possession, which she is unable\nto expend for the benefit of indigent seamen, for the reason that there are not a sufficient\nnumber of this class to allow for the expenditure of the money available, and she further\nasked for instructions as to whether or not she may be permitted to expend the funds under\nthe cy pres doctrine for the benefit of seamen of other classes such as fishermen,\nlobstermen, and others.\nVarious organizations claiming to have been organized for the purpose of rendering\nassistance to indigent seamen, or who throughout the years have been rendering such\nassistance, filed appearances and were heard by the sitting Justice at the time of the hearing.\nThe heirs-at-law of Captain How who comprise grandnephews, grandnieces, greatgrandnephews, and great-grandnieces also appeared.\nThe State of Maine because of the provisions of Section 4, Chapter 20, R.S.1954,\npreviously referred to, was represented by the Attorney General. The trustee, and those who\nappeared, with the exception of the heirs-at-law, take the position that the fund now\navailable should be administered under the cy pres doctrine, and the class of beneficiaries\nextended to include seamen of types other than that to which Captain How belonged.\nThe heirs-at-law argue, first that the trust has failed; second, that there was no\ngeneral charitable intent on the part of Captain How; and third, that the matter has been\njudicially settled and is res judicata by reason of the decree of the Supreme Judicial Court in\nEquity dated July 16, 1956, at which time the trustee was instructed to pay the sum of\n$10,000 to the Portland Seamen\'s Friend Society. The heirs-at-law, therefore, contend that a\nresulting trust has arisen in the entire fund for their benefit.\nBefore passing to a discussion of the cy pres doctrine, and its applicability to the\ninstant case, we can readily dispose of the third argument advanced in behalf of the heirs-atlaw, to the effect that the matter has been judicially settled by the decree of the Supreme\n211\n\n\x0cJudicial Court previously referred to. One of the essential elements of the doctrine of res\njudicata is identity of issue. It is clear that the issue for our determination at this time is not\nat all the issue which was concluded in the hearing which culminated in the decree of July 16,\n1956. Consequently, it is our opinion that there is no strength to this argument in behalf of\nthe heirs-at-law.\nThe words \xe2\x80\x98cy pres\' are Norman French for \xe2\x80\x98as near.\xe2\x80\x99 The phrase when expressed to\nits full implication was \xe2\x80\x98cy pres comme possible\xe2\x80\x99 which means \xe2\x80\x98as near as possible.\xe2\x80\x99\nThe doctrine of cy pres is the principle that equity will, when a charity is originally or\nlater becomes impossible or impractical of fulfillment, substitute another charitable object\nwhich is believed to approach the original purpose as closely as possible. It is the theory that\nequity has the power to mold the charitable trust to meet emergencies.\nWhere property is given in trust for a particular charitable purpose, the trust will not\nordinarily fail even though it is impossible to carry out the particular purpose. In such a case\nthe court will ordinarily direct that the property be applied to a similar charitable purpose.\nThe theory is that the testator would have desired that the property be so applied if he had\nrealized that it would be impossible to carry out the particular purpose. The theory is that\nalthough the testator intended that the property should be applied to the particular charitable\npurpose named by him, yet he had a more general intention to devote the property to\ncharitable purposes. The settlor would presumably have desired that the property should be\napplied to purposes as nearly as may be like the purposes stated by him rather than that the\ntrust should fail altogether. The principle under which the courts thus attempt to save a\ncharitable trust from failure by carrying out the more general purpose of the testator and\ncarrying out approximately though not exactly his more specific intent is called the doctrine\nof cy pres.\xe2\x80\x99 Scott on Trusts, Vol. 3, \xc2\xa7399.\n\xe2\x80\x98Cy pres means \xe2\x80\x98as near to,\xe2\x80\x99 and the doctrine is one of construction, the reason or\nbasis thereof being to permit the main purpose of the donor of a charitable trust\nto be carried out as nearly as may be where it cannot be done to the letter.\' 14\nC.J.S. Chapter \xc2\xa7 52 a., p. 512.\nThe cy pres doctrine is properly applied in a case where there is a general charitable\npurpose, but a literal compliance with the terms of the trust becomes impossible or\n212\n\n\x0cimpracticable in which case the court directs the administration of the trust as nearly as\npossible in conformity with the intention of the donor or testator.\xe2\x80\x99 14 C.J.S. Charities \xc2\xa7 52 c.,\np. 514. The doctrine of cy pres does not apply to private trusts.\nA very fine exposition of the prerequisites to the application of the doctrine of cy\npres can be found in Chapter 5, of the book entitled The Cy Pres Doctrine in the United\nStates by Edith L. Fisch.\nThe author points out that before the cy pres doctrine will be applied three\nprerequisites must be met. First, the court must find that the gift creates a valid charitable\ntrust. Second, it must be established that it is to some degree impossible, or impractical to\ncarry out the specific purpose of the trust, for the cy pres doctrine is inapplicable when the\nparticular purpose of the settlor can be effectively carried out. The third prerequisite is the\nrequirement of a general charitable intention, and it is this prerequisite which has given rise\nto most of the litigation in cy pres cases. This requirement of general charitable intent grew\nup as a result of the theory that the cy pres doctrine is a device to carry out the intent of the\nsettlor of the trust.\nThe first prerequisite, :-That the gift creates a valid charitable trust, has been taken\ncare of by the decision of this Court in509, 84A 1070, Petition of Pierce, 109 Me. 509, 84A.\n1070, in which the Court held that the bequest in the How will is in terms a good public\ncharitable bequest.\nPassing now to the second prerequisite, that it must be established that it is to some\ndegree impossible or impractical to carry out the specific purpose of the trust, we find a\nsituation where all the interested parties are agreed, and this statement applies to the heirs-atlaw as well, that while the number of indigent seamen of the class seemingly intended by the\ntestator has become substantially reduced, it has not entirely disappeared. Moreover, the\nrecord clearly indicates that there are still indigent seamen in existence, even of the class to\nwhich the testator belonged. Consequently, the trust has not entirely failed. However, it is\nalso clear that the trust fund now available is in an amount too large to permit its application\nfor the relief of indigent seamen of the class to which the testator belonged. It has, therefore,\nbecome impossible to carry out the specific purpose of the trust, if the specific purpose was\nto render assistance only to indigent seamen of the class to which the testator belonged.\n\n213\n\n\x0cThe important issue, therefore, for determination is whether or not the testator\nexpressed in his will a general charitable intent. If so, then the application of the cy pres\ndoctrine would be in order and the scope of the beneficiaries seemingly covered in the trust\ncan be broadened and enlarged. In other words, seamen of a type different from that to\nwhich the testator belonged can be included as beneficiaries.\nWe give our attention, therefore, to the issue of determining whether or not Captain\nHow manifested a general charitable intention when he created the trust which is now\nbefore us for construction.\nLegal authors all describe this general charitable intention as a desire to give to\ncharity generally, rather than to any one party, object or institution.\nThe question of whether or not a testator is making a charitable bequest has evinced\na general charitable intent or is making a specific bequest to a specific beneficiary for a\nspecific charitable purpose is a question of interpretation of the particular will under\nconsideration. To attempt to formulate a general rule which would solve all such cases would\nbe an attempt to achieve the impossible. Nor do the cases from our own or other\njurisdictions materially aid in deciding the particular question of interpretation with which we\nare here concerned, as distinguished from a decision of the fundamental principles of law\nfrom which the authority of the Court to apply the cy pres doctrine arises.\xe2\x80\x99 First Universalist\nSoc., Bath v..Swett, 148 Me 142, 150, 90 A2d 812, 817.\nAuthors on the subject of trusts are all in accord that if property is given in trust to\nbe applied to a particular charitable purpose, and at the time when the property is given it is\npossible and practical and legal to carry out the particular purpose, but subsequently owing\nto a change of circumstances it becomes impossible or impractical or illegal to carry out the\nparticular purpose, it is easier to find a more general charitable intention of the settlor than it\nis where the particular purpose fails at the outset.\nA review of the cases decided by this Court in which the principle of the cy pres\ndoctrine was involved may be of interest. The doctrine was discussed in Allen v. Trustees of\nNasson Institute, 107 Me. 120, 77 A 638. In this case, the Court pointed out that the doctrine\napplies only when two prerequisites exist, viz., when the court may see in the instrument a\ngeneral charitable purpose as well as a specific gift, which has failed. In deciding that the cy\n214\n\n\x0cpres doctrine did not apply, the court found that neither of these prerequisites existed. The\ntrust had not failed and there was no evidence of a general charitable intent.\nIn Brooks v. Belfast, 90 Me. 318, 38 A. 222, the Court found that there was a gift for a\nspecific purpose with no general charitable intent and so the doctrine was not applied. Again\nin Doyle v. Whalen, 87 Me. 414, 32 A. 1022, 31 L.R.A. 118, it was held that the trust created in\nthis instance was for the benefit of definite persons who could be identified, and so the\ndoctrine was not applied.\nThe doctrine was applied in Manufacturers National Bank v. Woodward, 141 Me. 28, 38\nA.2d 657; in Stevens v. Smith, 134 Me. 175, 183 A. 344; in Snow & Clifford v. President and\nTrustees of Bowdoin College, 133 Me. 195, 175 A. 268 and in Lynch v. South Congregational Parish of\nAugusta, 109 Me. 32, 82A. 432..\nThe doctrine was not applied in Dupont v. Pelletier, 120 Me. 114, 113 A. 11; Bancroft v.\nMaine State Sanatorium Association, 119 Me. 56, 109 A. 585; Gilman v. Burnett, 116 Me. 382, 102\nA. 108, L.R.A. 1918A, 794 in Merrill v Hayden, 86 Me. 133, 29 A. 949.\nIn the case of Merrill v. Hayden, supra, a testator had left all of his property to one of\nhis two daughters, to hold during her lifetime, and at her death the residue was to go to the\nMaine Free Baptist Home Missionary Society. During the lifetime of the testator this society\nwas dissolved by act of the Legislature and all its property transferred to another Association\ncreated for a different purpose. It was held that the legacy lapsed and the cy pres doctrine\nnot applicable.\nIn Gilman v. Burnett, supra, and Bancroft v. Maine State Sanatorium Association, supra, the\ncy pres doctrine was not applied because the Court found no evidence of general charitable\nintent.\nIn the case of Lynch v. South Congregational Parish of Augusta, supra, the Court found\nthat after reading the will in the light of existing conditions, the testator had evinced a\ngeneral charitable intention and the doctrine of cy pres was applied.\nIn the cases of Snow & Clifford v. President and Trustees of Bowdoin College, supra, and\nStevens v. Smith, supra, the Court reached the conclusion that the testators had evinced a\ngeneral charitable intention and upon inability to comply with the original purpose of the\ntrust, the doctrine of cy pres became applicable.\n215\n\n\x0cTwo cases from other jurisdictions where the doctrine was applied are of interest. In\nthe case of Society for Promoting Theological Education v. Attorney General, 135 Mass. 285, a trust\nwas set up providing that indigent students in theology who should be deemed worthy of\nassistance would be paid sums not exceeding one hundred or one hundred fifty dollars a year\nfor three years. The trust income increased substantially and there was not a sufficient\nnumber of indigent students to exhaust the income. The court ruled that under the cy pres\ndoctrine the payments could be increased.\nIn the case of Hoyt v. Bliss, a Connecticut case, 93 Conn. 344, 105 A. 699, a trust was\nset up providing for the support of one student. A surplus of money developed and the\ncourt ruled that the trustee could use the money to support additional students.\nWhile, as previously stated, it seems to have been assumed by all interested parties\nthat the beneficiaries of the trust created by Captain How were indigent seamen of the class\nto which he belonged, we are not thoroughly convinced that this is so. At times much earlier\nthan the year when Captain How\'s will was executed, our Court had described crewmen of\nother types of vessels as seamen.\nIt seems apparent that even in 1870, the term \xe2\x80\x98seamen\xe2\x80\x99 was not limited to mariners\nof the type who manned vessels such as the Ellen Stevens.\nThat this is so, is shown by a decision of this Court in Lewis v. Chadbourne, 54 Me.\n484; a case decided prior to 1868, in which fishermen in the mackerel industry were\ndescribed as seamen. Another is Holden v. French, 68 Me. 241, decided in 1878, in which this\nCourt described the crewmen of a fishing vessel as seamen.\nIf we endeavor to project ourselves into the past and contemplate upon the intention\nof Captain How, we may well suppose that while he was perhaps primarily interested in\ncrewmen of ships such as he was master of, he nevertheless had in mind that wider group of\nmen whose major means of livelihood was gained from the sea. He used the expression, in\nhis will \xe2\x80\x98the class of indigent seamen.\xe2\x80\x99 Webster describes the word \xe2\x80\x98class\' as \xe2\x80\x98a group of\nindividuals ranked together as possessing common characteristics or as having the same\nstatus;\xe2\x80\x99 and also \xe2\x80\x98a group of persons, having common characteristics or attributes.\xe2\x80\x99\nWebster defines the word \xe2\x80\x98indigent\xe2\x80\x99 as follows: \xe2\x80\x98Destitute of property or means of\ncomfortable subsistence; needy; poor; in want; necessitous\'; and Joseph Addison the English\n216\n\n\x0cpoet and essayist said: \xe2\x80\x98Charity consists in relieving the indigent.\xe2\x80\x99\nAfter making provision for those most dear and close to him, his wife, mother and\nbrother, Captain How gave all of his estate for a public charity. The will neither provides for\nforfeiture or limitation over. We are convinced that when he executed his will on the day\nbefore he died, he was imbued with a deep charitable intent, and that he intended all of his\nwordly goods and effects to be devoted forever to the relief of indigent seamen, not only of\nthe class to which he belonged, but to all classes of indigent seamen.\nIt is, therefore, our opinion that the scope of the beneficiaries of this kindly gift\nshould be widened and enlarged. We reach this conclusion not necessarily through the\napplication of the cy pres doctrine, but rather through an interpretation of the intention of\nthe testator at the time be executed his will. See Guilford Trust Company v. LaFleur (Inhabitants of\nGulford), 148 Me. 162, 91 A.2d 17.\nThe trustee is, therefore, authorized to use and employ the income for the benefit of\nindigent seamen not only of the class to which Captain How belonged, but to other classes,\nby way of illustration and not of limitation, such as crewmen of merchant vessels, oil tankers\nand fishing vessels.\nIn the determination of who shall be classed as indigent seamen, the trustee may give\nconsideration to the modern laws and latter day adjudications as to the interpretation of\nwhat a \xe2\x80\x98seaman\xe2\x80\x99 is.\nA good definition is to be found in 79 C.JH.S. Seamen \xc2\xa7, (a.) p. 490.\n\xe2\x80\x98While the word \xe2\x80\x98seaman\xe2\x80\x99 is a flexible word, the meaning of which ordinarily\ndepends on the circumstances in which it is used, in the broad sense of the word\na seaman is a mariner of any degree, including one who does any sort of work\naboard a ship in navigation.\'\nIn her petition, the trustee requested instructions as to whether or not lobster\nfishermen may be included among the beneficiaries. We are of the opinion that lobster\nfishermen are not seamen within the meaning of the foregoing definition, nor within the\nintention of the testator.\nThe trustee is given the right to employ agents for the purpose of investigating\n217\n\n\x0ccases, and to pay such agents reasonable compensation for their services and charge the\nsame to the trust fund. The trustee in using and employing the income for the benefit of\nindigent seamen of the classes above described, may do this directly or she may turn over the\nincome to some worthy association or associations organized for that purpose; the exact\ndetails to be left to a Justice of the Supreme Judicial Court who is to determine to whom the\nincome shall be paid and through what channel the gift can be made most effective.\nAssociations to whom any portion of the income is paid may charge a reasonable\ncommission for expenses of administration, the amount of such commission to be\ndetermined by the trustee, subject to the approval of a Justice of the Supreme Judicial Court.\nAny association to whom any of the income is paid shall file at least annually an account of\nits disbursements with the trustee. The Portland Seamen\'s Friend Society to whom the sum\nof $10,000 has already been paid shall forthwith file an account of its disbursements with the\ntrustee. Copies of all accounts of the trustee which are filed in the Probate Court, as well as\ncopies filed by associations to whom any portion of the income has been paid are to be filed\nwith the Attorney General of the State of Maine.\nCase remanded to the sitting Justice for a decree in accordance with this opinion.\n\nIn the Matter of the Lucas Charitable Gift, 261 P.3d 800\nOpinion of the Court by LEONARD J.\nPetitioner\xe2\x80\x93Appellant Hawaiian Humane Society (HHS) appeals from the following\njudgment and orders of the Circuit Court of the First Circuit, sitting in Probate (Probate\nCourt): (1) Order Denying Petition to Approve Land Exchange Free and Clear of Use\nRestrictions (Order Denying Petition), filed on May 18, 2009; (2) Order Denying Petition for\nRelief from Order Denying Petition to Approve Land Exchange Free and Clear of Use\nRestrictions and for Entry of Final Judgment, filed on December 21, 2009 (Order Denying\nRelief); and (3) Judgment Pursuant to Order Denying Petition to Approve Land Exchange\nFree and Clear of Use Restrictions (Judgment), filed on December 21, 2009. In this case, the\nProbate Court declined to apply the doctrine of cy pres to modify a charitable gift of land.\nThe position of all parties on appeal is that the Probate Court erred in failing to apply cy pres\nto approve the proposed land transaction. We agree and, accordingly, vacate the Judgment\nand remand with instructions.\n218\n\n\x0cI. BACKGROUND\nA. The Charitable Gift\nThe underlying petition in this case stems from HHS\'s acquisition of an interest in\ncertain land in the Niu Valley, obtained through a charitable gift. On December 28, 1976,\nElizabeth J.K.L. Lucas (Mrs. Lucas) granted HHS a 50.6183968% undivided interest in the\nland by way of deed. On December 30, 1982, she conveyed an additional 1.4% undivided\ninterest in the land to HHS by way of a second deed. Both deeds contain the following use\nrestriction:\n[F]or and as a charitable gift, [Mrs. Lucas] does hereby grant, bargain, sell and\nconvey the property hereinafter described unto the HAWAIIAN HUMANE\nSOCIETY ... so long as the same shall be used for the benefit of the public for\nthe operation of an educational preserve for flora and fauna, to be made\naccessible as an educational experience for the public under the control and\nadministration of said Hawaiian Humane Society and its successors and assigns,\nand, if not so used, then to State of Hawaii and its successors and assigns, for\nand as a public park.\nUpon Mrs. Lucas\'s death in 1986, her remaining 47.981603% interest in the land\npassed through her estate to her daughter, grandchildren, and great-grandchildren (the\nThompsons), all of whom have resided on the land for many years. The Thompsons formed\na Hawai\xe2\x80\x98i general partnership, Respondent\xe2\x80\x93Appellee Tiana Partners, to which they\ntransferred their interest in the land.\nB. Attempts to Use the Gifted Land\nAfter receiving the land, HHS made numerous attempts to plan a feasible use for the\nland in furtherance of the deed restrictions. In consultation with Tiana Partners, HHS\nconsidered many different ideas for effectuating the purpose stated in the deeds, but\nultimately rejected them as physically or economically unfeasible.\nIn 2003, HHS commissioned a feasibility study for a proposed low-intensity\ndevelopment that would be accessible to the public. The study led HHS to conclude that\nusing the land for a public educational preserve would be extremely expensive and\nimpractical. It would require disrupting the Thompson residences and surrounding\n219\n\n\x0cneighborhood.\nDuring 2004 and 2005, HHS and Tiana Partners conducted a series of meetings with\nvarious community organizations, including the Honolulu Zoo, the Hawai\xe2\x80\x98i Nature Center,\nand the Department of Education. The purpose of the meetings was to identify potential\nuses for the land that would be consistent with the intent of the gift, beneficial to the\ncommunity, and physically and economically feasible. Due to the residential character of the\nsurrounding neighborhood, an overriding consideration was maintaining peaceful\ncoexistence with the Thompsons and other residents in the area. Access to the property was\nalso a key consideration. The land is remote; much of it is steep; and it is accessible only by\ntwo residential roads. Using either road for public access would have a disruptive impact on\nthe neighboring residents.\nThe State of Hawai\xe2\x80\x98i (State) Department of Land and Natural Resources (DLNR)\nlikewise determined that the land was not suitable for use as a public park. However, it\ndetermined that a portion of the land, Parcel 2, was best-suited for watershed and forest\nreserve purposes.\nC. Land Exchange Agreement\nHHS and Tiana Partners began considering other ways to further the intent of the\noriginal gift. On September 11, 2006, after extensive negotiations, they signed a\nMemorandum of Understanding (MOU). The MOU contemplates a three-way land\nexchange and sale between HHS, Tiana Partners, and the State. HHS and Tiana Partners\nagreed to convey their interests in Parcel 2 to the State. In exchange, the State would release\nits executory interest in the remaining parcels. HHS also agreed to convey its interest in the\nremaining parcels (1, 20, and 21) to Tiana Partners, free and clear of the use restriction, for\n$1,082,850. HHS would use the proceeds to establish a segregated fund known as the\n\xe2\x80\x9cCharles and Clorinda Lucas Educational Fund\xe2\x80\x9d (Educational Fund). The principal and\ninterest would be dedicated exclusively to HHS\'s educational programs. These programs are\ndesigned to foster compassion and caring for all life, focusing on the interdependent\nrelationship between animals, humans, and the environment and our role as stewards and\ncaregivers.\nThe MOU conditioned the proposed land exchange upon: (1) the agreement of the\n220\n\n\x0cState Board of Land and Natural Resources (BLNR); (2) the approval of the Hawai\xe2\x80\x98i\nLegislature, pursuant to Hawaii Revised Statutes (HRS) \xc2\xa7 171-50 and (3) the approval of the\nProbate Court. At board meetings on December 8, 2006 and December 14, 2007, the BLNR\napproved in principle the land exchange transaction. In December of 2007, the Legislature\nalso approved the transaction.\nD. Petition to Approve Land Exchange\nOn October 28, 2008, HHS filed a Petition to Approve Land Exchange Free and\nClear of Use Restrictions (Petition) with the Probate Court. The Petition sought an order\napproving the proposed land transaction and eliminating the use restriction on the land.\nHHS maintained that the Probate Court had authority to modify the terms of the charitable\ngift because its stated purpose was impracticable and could not reasonably be accomplished.\nThe Attorney General, acting as parens patrie, filed a response to the Petition on\nNovember 19, 2008. He stated no objection to the relief sought and affirmed that the use\nrestriction \xe2\x80\x9chas been proven demonstrably impracticable or impossible and ... the relief\nsought in the petition is fair and reasonable and is consistent with the doctrine of cy pres.\xe2\x80\x9d\nThe State filed a joinder in the Petition on November 21, 2008. The Administrator of the\nDivision of Forestry and Wildlife of the DLNR filed a declaration attesting that the DLNR\nhad inspected and reviewed the properties described in the Petition. The DLNR\n\xe2\x80\x9cdetermined that these properties are not presently suitable for use as a public park, and in\nparticular that Parcel 2 is best used for watershed and forest reserve purposes.\xe2\x80\x9d\nLaura Thompson (Thompson), Mrs. Lucas\'s daughter, filed a declaration attesting\nthat Mrs. Lucas would have fully supported the land exchange \xe2\x80\x9cas a compromise necessary\nto further her deep interest in all things natural and her strong commitment to education,\nwhich can be accomplished far better through the broad reach of the Hawaiian Humane\nSociety than in a narrow urban valley.\xe2\x80\x9d She attested that Mrs. Lucas \xe2\x80\x9cwas actively involved\nwith the Hawaiian Humane Society throughout her life\xe2\x80\x9d and served on its Board of\nDirectors. Mrs. Lucas fully supported its mission \xe2\x80\x9cto promote the bond between humans\nand animals and to foster the humane treatment of all animals.\xe2\x80\x9d Thompson believed her\nmother was not aware of the obstacles preventing development of the land in accordance\nwith the deeds. She believed her mother\'s original intent in gifting the land was \xe2\x80\x9cto benefit\nthe people of Hawai\xe2\x80\x98\'i through the work of the Hawaiian Humane Society\xe2\x80\x9d and to \xe2\x80\x9chelp the\n221\n\n\x0cSociety provide an educational experience for the public.\xe2\x80\x9d\nE. Probate Court Order and Judgment\nFollowing a hearing, the Probate Court entered the Order Denying Petition on May\n18, 2009. The court stated the following grounds as its basis for the denial:\n1. The deeds provide, \xe2\x80\x9c... for and as a charitable gift, does hereby grant,\nbargain, sell and convey the property hereinafter described unto the\nHawaiian Humane Society, ... so long as the same shall be used for the\nbenefit of the public for the operation of an educational preserve for flora\nand fauna, to be made accessible as an educational experience for the public\nunder the control and administration of said Hawaiian Humane Society, ...\nand if not so used, then to State of Hawaii, its successors and assigns for and\nas a public park, ...\xe2\x80\x9d\n2. Even if the Court finds that the deeds create a charitable trust, the\nMemorandum of Understanding does not involve the use of the properties\nas stated in the deeds. The Memorandum of Understanding states that the\nPetitioner will receive cash in exchange for conveying its interest in the\nproperties and will use the cash \xe2\x80\x9c... to establish a segregated fund to be\nknown as the \xe2\x80\x98Charles and Clorinda Lucas Educational Fund,\xe2\x80\x99 the principle\n[sic] and interest of which fund shall be used exclusively to pay the costs\nassociated with educational programs designed to foster compassion and\ncaring for all life, focused on the interdependent relationship between\nanimals, humans and the environment and on our roles as stewards and\ncaregivers.\xe2\x80\x9d\n3. Mrs. Lucas\' charitable purpose as stated in the deeds is to use the\nproperties for the operation of an educational preserve for flora and fauna, to\nbe made accessible as an educational experience for the public. The deeds\nalso provide that if the petitioner does not use the properties for the stated\ncharitable purpose, the properties would go to the State of Hawaii.\n4. The doctrine of cy pres does not apply to the Petitioner since the deeds\nprovide for an alternative if the properties are not used by the Petitioner as\n222\n\n\x0cMrs. Lucas intended.\nOn August 3, 2009, HHS filed a petition for relief from the Probate Court\'s Order\nDenying Petition. The Attorney General and Tiana Partners filed joinders in the petition for\nrelief, and the State filed a memorandum of no opposition. All interested parties agreed that\nthe Probate Court misconstrued the cy pres doctrine and that it should have approved the\ntransaction.\nOn December 21, 2009, the Probate Court entered the Order Denying Relief and the\nJudgment. HHS timely appealed.\nII. POINTS OF ERROR\nOn appeal, HHS argues that the Probate Court erred in denying the Petition and\nrefusing to modify the terms of the charitable gift to approve the proposed land exchange.\nTiana Partners filed an Answering Brief in support of HHS\'s position. The State filed an\nAnswering Brief expressing its non-opposition and joinder in HHS\'s request for relief.\nIII. STANDARDS OF REVIEW\nHawai\xe2\x80\x98i courts have not addressed the applicable standard of review for a lower\ncourt\'s refusal to apply the doctrine of cy pres. In applying an analogous doctrine to reform\nthe terms of a private trust, the supreme court analyzed the issue as a question of law. In re\nEstate of Chun Quan Yee Hop, 52 Haw. 40-45, 46, 469 P.2d 183, 186-87 (1970). Other\njurisdictions have held that whether cy pres applies is a question of law, reviewable de novo. See,\ne.g., Koln v. City of Storm Lake, 736 N.W.2d 546, 552-53 (Iowa 2007); In re R.B. Plummer\nMemorial Loan Fund Trust, 266 Neb. 1, 661 N.W.2d 307, 311 (2003); Puget Sound Nat\xe2\x80\x99l Bank of\nTacoma v. Easterday, 56 Wash.2d 937, 350 P.2d 444, 447 (1960); ABC for Health, Inc. v. Comm\xe2\x80\x99r\nof Ins., 250 Wis.2d 56, 640 N.W.2d 510, 515 (Wis. Ct. App. 2001). Accordingly, we hold that\nthe issue of whether the doctrine of cy pres is applicable is a question of law, reviewable de\nnovo. Once cy pres is determined to be applicable, the lower court has discretion in\ndetermining the appropriate modification of the charitable gift. Obermeyer v. Bank of America,\nN.A., 140 S.W.3d 18, 22 (Mo. 2004).\nIV. DISCUSSION\nA. Cy Pres Generally\n223\n\n\x0cThe doctrine of cy pres \xe2\x80\x9cpermits a gift for a charitable purpose which cannot, for one\nreason or another, be carried out as directed by the donor, to be applied \xe2\x80\x98as nearly as may be\xe2\x80\x99\nto the fulfillment of the underlying charitable intent.\xe2\x80\x9d 15 Am. Jur.2d Charities \xc2\xa7149\n(2011)(Am.Jur.2d). Under the doctrine\'s traditional formulation, three elements are required:\n(1) there must be property given in trust for a charitable purpose; (2) it must be impossible,\nimpracticable, or illegal to carry out the specified charitable purpose; and (3) the settlor must\nhave manifested a general intent to devote the property to charitable purposes. Id.\nHawai\xe2\x80\x98i courts have not directly addressed or applied the cy pres doctrine. However,\nthe supreme court has recognized the doctrine in dictum. Chun Quan Yee Hop, 52 Haw. at 45,\n469 P.2d at 186. It noted that \xe2\x80\x9c[i]f it is impossible, impractical or illegal to carry out the\nspecific terms of a charitable trust in which the settlor has indicated a general charitable\npurpose, many courts will authorize the substitution of another charitable scheme within the\ntestator\'s general purposes.\xe2\x80\x9d Id. The court went on to apply an analogous doctrine to save a\nprivate trust from failing due to its contravention of the Rule Against Perpetuities. Id. 45-46,\n469 P.2d at 186-87.\nCy pres is only applicable to charitable trusts. Restatement (Third) of Trusts \xc2\xa7 67, cmt.\na (2003) (Restatement 3d); Am.Jur.2d \xc2\xa7149. Various policy considerations underlie its\napplication. First and foremost, the doctrine stems from the inability of charitable settlors to\nforesee the future. Restatement 3d, Reporter\'s Notes, cmt. a (recognizing that without cy pres,\n\xe2\x80\x9cmany charities would fail by change of circumstances and the happening of contingencies\nwhich no human foresight could provide against\xe2\x80\x9d). Circumstances change and contingencies\nfrequently arise that the settlor did not or could not anticipate. This is particularly true for\ncharitable trusts, as they may be perpetual in duration. Id.; Ronald Chester, George Gleason\nBogert, and George Taylor Bogert, The Law of Trusts & Trustees \xc2\xa7 431, at 117 (3d. ed.\n2005)(Bogert on Trusts ). The \xe2\x80\x9cneeds and circumstances of society evolve over time,\xe2\x80\x9d\nimpacting the potential benefit of the trust. Restatement 3d \xc2\xa7 67, cmt. a. Rather than allowing\nthe trust to fail, cy pres preserves the settlor\'s charitable intent by conforming the trust to the\ncontingencies that arise. Thus \xe2\x80\x9c[j]ust as it is against the policy of the trust law to permit\nwasteful or seriously inefficient use of resources dedicated to charity, trust law also favors an\ninterpretation that would sustain a charitable trust and avoid the return of the trust property\nto the settlor or successors in interest.\xe2\x80\x9d Id. at cmt. b. Similarly, because charitable trusts\n224\n\n\x0cimpact a broad spectrum of the public and \xe2\x80\x9care allowed by the law to be perpetual,\xe2\x80\x9d they\noften merit a greater exercise of judicial discretion than a private trust. Id. at Reporter\'s\nNotes, cmt. a.\nCourts widely recognize that the charitable purpose need not be impossible to\nwarrant applying cy pres. It is sufficient that achieving the settlor\'s stated purpose would be\nimpracticable or unreasonable to effectuate. Restatement 3d \xc2\xa7 67, cmt. c (\xe2\x80\x9cThe doctrine of cy\npres may also be applied, even though it is possible to carry out the particular purpose of the\nsettlor, if to do so would not accomplish the settlor\'s charitable objective, or would not do so in\na reasonable way.\xe2\x80\x9d) (second emphasis added); Bogert on Trusts \xc2\xa7 438, at 194-96 (recognizing\ninsufficiency of funds as basis for doctrine); Scott on Trusts \xc2\xa7 39.5.2, at 2717\xe2\x80\x9320; \xc2\xa7 39.5.4, at\n2740\xe2\x80\x9341; Am.Jur.2d \xc2\xa7 151 (doctrine is applicable where donor\'s directions \xe2\x80\x9ccannot beneficially\nbe carried into effect\xe2\x80\x9d) (emphasis added; punctuation altered). \xe2\x80\x9cAn impractical restriction is\none that is not capable of being carried out in practice.\xe2\x80\x9d Am.Jur.2d \xc2\xa7 157. If literal\ncompliance would \xe2\x80\x9cdefeat or substantially impair\xe2\x80\x9d the purposes of the trust, cy pres is\napplicable. Restatement 2d \xc2\xa7399, cmt. a. The purpose of the trust becomes impaired if \xe2\x80\x9cthe\napplication of [trust] property to such purpose would not accomplish the general charitable\nintention of the settlor.\xe2\x80\x9d 88 Am. Jur.. Proof of Facts 3d 469, \xc2\xa7 10 (2006) (Am.Jur. Proof of Facts\n3d).\nThus, cy pres is applicable where a settlor creates a charitable trust of real property to\nbe used for a particular purpose, but the property turns out to be unsuitable for that\npurpose. See Scott on Trusts \xc2\xa7 39.5.2, at 2724\xe2\x80\x9325; Roberds v. Markham, 81 F.Supp. 38, 40\n(D.D.C. 1948) (recognizing that courts may order sale of gifted land if conditions have\ndrastically changed or land otherwise becomes unsuitable for its dedicated purpose); Bd. of\nEduc. Of Rockford v. City of Rockford, 372 Ill. 442, 24 N.E.2d 366, 369-73 (1939) applying cy pres\nto allow sale of land in charitable trust where its dedicated use as school became\nimpracticable due to shifting populations, deterioration of existing building, and existence of\nanother school that met needs of the area). In one case, for example, a settlor gifted certain\nland to a charity for the purpose of building a public library upon the land. Bosson v. Woman\xe2\x80\x99s\nChristian Nat\xe2\x80\x99l Library Ass\xe2\x80\x99n, 216 Ark. 334, 225 S.W.2d 336, 337 (1949). The land turned out\nto be unsuitable for constructing a library. Id. The charity reached an agreement with a\ncounty library board under which it would sell the land and use the proceeds to build a\n225\n\n\x0cpublic library upon property owned by the county board. Id . The board agreed to operate\nthe library for the benefit and use of the public. Id at 337-38. On appeal, the court applied cy\npres to approve the transaction. Id at 338-39. It noted that cy pres applies where the\ncircumstances \xe2\x80\x9chave changed to such an extent that in order to carry out properly the\ncharitable intention of the donor, it is necessary to dispose of the trust property and devote\nthe funds to the acquisition of a more suitable location[.]\xe2\x80\x9d. Id at 338. (internal quotation\nmarks and citation omitted).\nSimilarly, a California court applied cy pres where the stated purposes of the gifted\nproperties became impracticable. In re Estate of Zahm, 16 Cal. App.3d 196, 93 Cal.Rptr. 810\n(1971). There, the testatrix left two residential properties to the Salvation Army. . Id at 811.\nShe directed the Flower Street property to be used as a home for Christian women, and the\nKeniston Avenue property as a music home. Id. After her death, the Flower Street property\nwas taken pursuant to eminent domain and the Keniston Avenue property was deemed\nunsuitable for development due to zoning issues. . Id at 813. The Salvation Army proposed\nto use the funds from the Flower Street property to erect and furnish a new building on a\ndifferent site. Id. It further proposed to sell the Keniston Avenue property and use the\nproceeds to either construct a music conservatory on another site or endow a music room\nunder construction at another Salvation Army center. Id.\nThe court confirmed that cy pres was applicable. . Id at 814. It concluded that because\nneither property was suitable for carrying out the testatrix\'s declared intentions, the lower,\ncourt \xe2\x80\x9cproperly directed that her charitable purposes be given effect at some other suitable\nlocations.\xe2\x80\x9d Id.; see also Bogert on Trusts \xc2\xa7 439, at 218-20 (noting that cy pres is applicable where\ntrust property is taken under eminent domain).\nThe third element\xe2\x80\x94general charitable intent\xe2\x80\x94has been a source of uncertainty and\nreform. Under the traditional rule, cy pres may only be applied if the settlor possessed a\ngeneral charitable intent. Am.Jur.2d \xc2\xa7 153. His or her intent must have encompassed\n\xe2\x80\x9csomething beyond the specific terms used in designating the beneficiary or purpose of the\ngift or how it shall be carried into effect.\xe2\x80\x9d Id.; see also Restatement 2d \xc2\xa7399; Bogert, on Trusts \xc2\xa7\n431, at 119; \xc2\xa7 436, at 157\xe2\x80\x9360. The donor must have had a general charitable intent, as\nopposed to a narrow intent to benefit only a \xe2\x80\x9cparticular project, objective, or institution[.]\xe2\x80\x9d\nAm.Jur.2d \xc2\xa7 153. For example, where a settlor\'s dominant intent is to restrict the charitable\n226\n\n\x0cgift to the exact purpose specified, courts may presume that the donor would not have\nwanted the property to be applied to any other purpose, however closely related, even if the\noriginal purpose fails. Restatement 2d \xc2\xa7399, cmt. d. / In such situations, cy pres is not applicable\nbecause the settlor did not have a general charitable intent. Id.; see also Shoemaker v. Am. Sec.\n& Trust Co., 163 F.2d 585, 588 (D.C. Cir. 1947) (noting that cy pres does not apply if settlor\'s\n\xe2\x80\x9cdominant purpose has become altogether impossible of achievement\xe2\x80\x9d). In contrast, if the\nsettlor\'s designation of a particular property or site is incidental to the dominant charitable\npurpose, then courts will presume that the settlor\'s primary intent was to dedicate the\nproperty to charitable purposes. Shoemaker, 163 F.2d at 589; see also In re Wilkey\xe2\x80\x99s Estate, 337\nPa. 129, 10 A.2d 425, 428 (1940) (recognizing that cy pres applies where \xe2\x80\x9cthe physical location\nof the edifice or institution provided for in a charitable trust has been held to be of\nsecondary importance in comparison with the general purpose for which the erection of the\nbuilding or the carrying on of the charitable activity was designed\xe2\x80\x9d). In such cases, cy pres is\nreadily applicable to effectuate the settlor\'s general charitable intent. Shoemaker, 163 F.2d at\n589.\nIncreasingly, the \xe2\x80\x9cgeneral charitable intent\xe2\x80\x9d requirement has shifted to an \xe2\x80\x9copt-out\xe2\x80\x9d\nframework under which the settlor is presumed to have a general charitable intent unless the\nterms of the trust provide otherwise. See Restatement 3d \xc2\xa7 67, cmt. b; Reporter\'s Notes, cmt. b;\nUnif. Trust Code \xc2\xa7413(a). 7C U.L.A. 509 (2006); Bogert on Trusts \xc2\xa7 436, at 160 (noting that \xe2\x80\x9cit\nwould seem preferable\xe2\x80\x9d either to employ presumption in favor of general intent or apply cy\npres regardless of whether settlor\'s charitable intent was general or specific); but see Am.Jur.\nProof of Facts 3d \xc2\xa7 6 (noting that \xe2\x80\x9cpresumption of general charitable purpose has not yet been\ndiscussed in the reported decisions\xe2\x80\x9d). Commentators have noted that the \xe2\x80\x9cgeneral intent\xe2\x80\x9d\nrequirement is vague and difficult to apply consistently. Ronald Chester, Cy Pres or Gift Over?:\nThe Search for Coherence in Judicial Reform of Failed Charitable Trusts, 23 Suffolk U.L. Rev. 41, 4546 (1989); accord Bogert on Trusts \xc2\xa7 436, at 183-89; \xc2\xa7 437, at 183\xe2\x80\x9389 (noting widespread\ninconsistency in applying this requirement). It turns on a fine, and often subjective,\ndistinction between a settlor\'s dominant and incidental or subsidiary objectives. See Bogert on\nTrusts \xc2\xa7 437, at 183-89. In contrast, the opt-out rule provides a clearer delineation that avoids\nguesswork as to the subtleties of the settlor\'s intent.\nFinally, in applying cy pres, courts must generally seek a purpose that conforms to the\n227\n\n\x0cdonor\'s objective \xe2\x80\x9cas nearly as possible.\xe2\x80\x9d Am.Jur.2d \xc2\xa7 157. This may be attained by limiting\nor modifying the objective; by diverting the funds to another use in the \xe2\x80\x9csame generally\ncontemplated field\xe2\x80\x9d; or by directing sale of the subject property. Id.; Am.Jur. Proof of Facts 3d\n\xc2\xa7 10; Restatement 2d \xc2\xa7399, cmt. p (cy pres allows sale of land even if \xe2\x80\x9cthe settlor in specific\nwords directed that the land should not be sold and that the institution should not be\nmaintained in any other place\xe2\x80\x9d). In the case of a sale, the proceeds may be applied to\npurchase a new, more suitable site, or to further the settlor\'s charitable intent in another\nmanner. See Am.Jur. Proof of Facts 3d \xc2\xa7 21. Where a charitable gift of property is subject to\nuse restrictions, the court may apply cy pres to modify or eliminate those restrictions. Id. at \xc2\xa7\n22; Bogert on Trusts \xc2\xa7 431, at 115; Scott on Trusts \xc2\xa7 39.5.2, at 2716.\nIn determining the appropriate modification, courts must consider a variety of\nfactors and evidence to ascertain what the settlor\'s wishes would have been had he or she\nanticipated the circumstances. Restatement 3d \xc2\xa7 67, cmt. d. Chief among them is the settlor\'s\nprobable intent. Id. Where the settlor is deceased, this intent may be discerned from extrinsic\nevidence as well as the language of the trust instrument. Such evidence includes the interests\nand attitudes that motivated the settlor\'s gift; his or her involvement or interest in particular\ncharitable institutions; and the settlor\'s \xe2\x80\x9crelationships, social or religious affiliations, personal\nbackground, charitable-giving history, and the like.\xe2\x80\x9d Id.; accord Bogert on Trusts \xc2\xa7 442, at 25758. The language of the trust instrument is also pertinent. Restatement 2d \xc2\xa7 399, cmt. d.\nThe modern approach to cy pres also emphasizes considering the efficiency and\nbeneficial impact of the proposed use. Restatement 3d \xc2\xa7 67, cmt. d. As the settlor\'s intent\ncannot be known for certain, applying cy pres necessarily involves some level of speculation.\nId.; accord Scott on Trusts \xc2\xa7 39.5.2, at 2709 (noting that courts must make \xe2\x80\x9can educated guess\xe2\x80\x9d\nas to settlor\'s wishes). Thus, it is generally \xe2\x80\x9creasonable to suppose that among relatively\nsimilar purposes, charitably-inclined settlors would tend to prefer those most beneficial to\ntheir communities. Restatement 3d \xc2\xa7 67, cmt. d (emphasis omitted; punctuation altered). To an\nincreasing extent, courts thus seek to apply the trust property toward \xe2\x80\x9ca scheme which on\nthe whole is best suited to accomplish the general charitable purpose of the donor.\xe2\x80\x9d\nRestatement 2d \xc2\xa7 399, cmt. b. Finally, the wishes of the trustees, the Attorney General as parens\npatrie, the beneficiaries, and other interested parties also warrant consideration. Id. at cmt. f;\nBogert on Trusts \xc2\xa7 442, at 258.\n228\n\n\x0cB. Gift over Rule\nHaving established the broad contours of the cy pres doctrine, we now turn to the\nheart of the issue on appeal: whether the Probate Court erred in concluding that cy pres is not\napplicable in this case. The Probate Court reasoned that cy pres does not apply because the\ndeeds provide an alternative distribution in the event that the primary charitable purpose\nfails. It concluded that \xe2\x80\x9cif [HHS] does not use the properties for the stated charitable\npurpose, the properties would go to the State of Hawaii.\xe2\x80\x9d\nThe Probate Court\'s rationale appears to invoke the gift over rule. A gift over is a\nprovision that sets forth an alternative distribution in the event that the primary purpose of\nthe charitable gift fails. Am.Jur.2d \xc2\xa7 151. The presence of a gift over provision may\npotentially preclude application of cy pres in two ways: (1) by negating the existence of a\ngeneral charitable intent, and (2) by providing an alternative distribution in the event that the\nsettlor\'s original purpose fails. Restatement 2d \xc2\xa7 399, Reporter\'s Notes, cmt. c; Am.Jur.2d \xc2\xa7\n151; Scott on Trusts \xc2\xa7 39.5.2, at 2710\xe2\x80\x9313; \xc2\xa7 39.7.5, at 2795\xe2\x80\x9397; 14 C.J.S. Charities \xc2\xa7 56 (2011).\nThe first application of the gift over rule is only relevant to the traditional\nrequirement that the settlor exhibit a general charitable intent. Under this reasoning, the gift\nover confirms the settlor\'s narrow and specific intent. 14 C.J.S. Charities \xc2\xa7 56. This is\nespecially true where the gift over is to a non-charity, such as a possibility of reverter. Nelson\nv.Kring, 225 Kan. 499, 592 P.2d 438, 444 (1979); In re Goehringer\xe2\x80\x99s Will, 69 Misc.2d 145, 329\nN.Y.S.2d 516, 521 (N.Y. Surr. Ct 1972) (noting that presence of gift over provision \xe2\x80\x9cis a\nclear manifestation that [the] testator had a particular rather than general charitable\nintention\xe2\x80\x9d); Roberds, 81 F.Supp. at 40-42 (concluding that because deed contained possibility\nof reverter if land ever ceased to be used for its prescribed purpose, settlor\'s intent was\nspecific to that purpose). Such a provision indicates that the settlor only wished to dedicate\nthe property to a specific purpose and, if that specific purpose failed, to not dedicate it to\ncharity at all. In re Goehringer\xe2\x80\x99s Will, 329 N.Y.S.2d at 521 (\xe2\x80\x9c[A] specific gift over will almost\nconclusively preclude any determination that he had other than an intent to benefit the\nparticular charity.\xe2\x80\x9d).\nIn contrast, where the gift over is to another charity or charitable purpose, many\ncourts recognize that it confirms a general charitable intent. See Bogert on Trusts \xc2\xa7 437, at 16570; Scott on Trusts \xc2\xa7 39.5.2, at 2713; First Nat\xe2\x80\x99l Bank of Chicago v. Elliott, 406 Ill. 44, 92 N.E.2d\n229\n\n\x0c66, 74 (1950). Such a provision illustrates the settlor\'s intent to dedicate the property to\ncharity, even if the original purpose fails. Bogert on Trusts \xc2\xa7 437, at 165-70.\nHere, the deeds provide an alternative charitable purpose: for the land to be used by\nthe State as a public park. Under the traditional formulation of the charitable intent\nrequirement, the gift over in this case confirms Mrs. Lucas\'s general charitable intent. Thus,\nregardless of the continuing viability of the general intent requirement, the gift over\nprovision does not prevent application of cy pres under the first rationale.\nIn any event, it does not appear that the Probate Court applied the first rationale of\nthe gift over rule. The Order Denying Petition contains no mention of general charitable\nintent. Instead, the Court\'s reasoning conforms to the second rationale. It concluded that\nbecause the deeds direct an alternative distribution, cy pres is inapplicable.\nThis second application of the gift over rule provides that cy pres is inapplicable as the\ntrust property should be applied toward its alternative purpose. 14 C.J.S. Charities \xc2\xa7 56. The\nrule reasons that the settlor foresaw the potential failure of the first purpose and accordingly\nprovided an alternative purpose. Id. Thus, effectuating the alternative distribution matches\nthe settlor\'s intent more closely than applying cy pres to maintain the first, failed purpose.\nA number of cases affirm the straightforward application of this rule. In Roberdss v.\nMarkham, for example, the settlor conveyed property in trust to a church for its continuing\noperation as a church or place of worship. 81 F.Supp. at 39. The deed provided that if the\nproperty ever ceased to be used for church purposes, it would revert to the settlor\'s heirs and\nassigns. Id. Many years later, when the character of the surrounding neighborhood had\nchanged and the church\'s population had shifted, the trustees sought to sell the property and\nre-erect the church at another, more suitable location. Id. The court concluded that because\nthe deed contained a possibility of reverter, the settler had intended the land to revert to her\nheirs and assigns if its use as a church ever became impracticable or impossible. . Id at 40-42.\nIt therefore did not apply cy pres to permit the sale. Id at 42; see also First Nat\xe2\x80\x99l Bank of Chicago\nv. Am. Bd. of Comm\xe2\x80\x99rs for Foreign Missions, 328 Ill. App. 481, 66 N.E.2d 446, 448-49 (1946)\ndeclining to apply cy pres where will impliedly provided for substitute distribution); accord\nConn. Bank & Trust Co. v. Cyril and Julia C. Johnson Mem\xe2\x80\x99l Hosp., 30 Conn. Supp. 1, 294 A.2d\n586, 591-93 (1972); Hail v. Cook, 294 S.W.2d 87, 88-89 (Ky. 1956).\n\n230\n\n\x0cYet this application of the gift over rule is subject to an important caveat. Where the\nalternative distribution is unfeasible, impracticable, or impossible, then the gift over rule\ndoes not preclude the application of cy pres to save the first charitable purpose. Am.Jur. Proof\nof Facts 3d \xc2\xa7 19; 14 C.J.S. Charities \xc2\xa7 56; Restatement 3d \xc2\xa7 67, cmt. b. In such cases, applying\nthe alternative purpose would likewise frustrate or substantially impair the settlor\'s intent. Cy\npres is thus necessary to save the trust from failure.\nIt appears that only one reported case has addressed this relatively rare scenario. Burr\nv. Brooks, 75 Ill. App.3d 80, 30 Ill. Dec. 744, 393 N.E.2d 1091 (1979), aff\'d, Burr v. Brooks, 83\nIll.2d 488, 48 Ill. Dec. 200, 416 N.E.2d 231 (1981). In Barr, the testator bequeathed certain\nreal property and funds to the City of Bloomington for the construction and operation of a\nmemorial hospital. Id. at 1093. The will directed the hospital to be constructed on the site\nwhere the testator had resided. . Id. It was to be operated especially for the benefit of\nindigent accident victims. Id. The will also directed an alternative distribution in the event\nthat the City declined the bequest. Id. The substitute purpose required the trustees to\nconstruct and maintain an \xe2\x80\x9cIndustrial School for Girls\xe2\x80\x9d on the site of his former residence.\nId.\nThe City adopted a resolution purporting to accept the bequest. Id. at 1094.\nHowever, it determined that the site was not suitable for construction of a hospital, that\nthere were already sufficient hospitals in the area, and that it could not obtain the requisite\npermission from governing authorities. Id. It thus sought to sell the real property and apply\nthe proceeds and remaining funds toward three related purposes that were more suitable to\nthe City\'s present needs: (1) to provide health care for indigent persons; (2) to establish a\nmemorial family care and diagnostic center that would offer free services to indigent\npersons; and (3) to establish an emergency medical services program. Id.\nThe intervenors, the city school district and a non-profit successor to the county\nWomen\'s Industrial Home, opposed application of cy pres on the basis that the will provided\nfor an alternative charitable distribution. Id. They maintained that because the first purpose\nwas impracticable, the court should apply the funds toward housing and educational\nprograms in conformance with the alternative distribution. Id.\nThe parties agreed that neither proposed use of the property effected literal\ncompliance with the will; both the primary and alternative distributions were impracticable\n231\n\n\x0cor impossible. Id. at 1095. Because the alternative distribution was also impracticable, the\npresence of the gift over provision did not defeat application of the cy pres doctrine. Id. at\n1095, 1097. The court noted that it would \xe2\x80\x9cmake[ ] no sense\xe2\x80\x9d to apply the gift over rule in\ncases where the alternative distribution, like the primary one, is incapable of literal\nperformance. Id. at 1097. It concluded that cy pres is applicable where a trust instrument \xe2\x80\x9c(1)\nprovides for a primary and alternate charitable gift, neither of which can be carried out, and\n(2) also indicates a strong desire that the charitable interest of the document be followed.\xe2\x80\x9d\nId. at 1097 (punctuation altered). The appellate court thus held that the trust property should\nnot be summarily redirected to its alternative distribution because the alternative\nbeneficiaries, \xe2\x80\x9clike the City, would be unable to comply with the terms of either charitable\ngift and could also make only a [c]y pres use of the property.\xe2\x80\x9d Id. It remanded for the lower\ncourt to apply cy pres and determine which proposed use \xe2\x80\x9cmost nearly follow[s] the interest\nof the [testator].\xe2\x80\x9d Id. at 1098.\nBurr v. Brooks thus recognizes that where the settlor provides for an alternative\ncharitable distribution, but that secondary purpose is also impracticable or impossible, cy pres\nmay apply to save the first. See Am.Jur. Proof of Facts 3d \xc2\xa7 19 (\xe2\x80\x9cWhere the donor provides that\non failure of the primary charitable purpose the gift shall be used for a second charitable\npurpose, but makes no provision concerning the failure of the second purpose, and both\npurposes fail, cy pres may be applied.\xe2\x80\x9d) (citing Burr v. Brooks); accord 14 C.J.S. Charities \xc2\xa7 56\n(\xe2\x80\x9cWhere the donor provides that on failure of the primary charitable purpose, the gift will be\nused for a second charitable purpose, but makes no provision concerning the failure of the\nsecond purpose, and both purposes fail, cy pres may be applied.\xe2\x80\x9d) (citing Burr v. Brooks). As\none commentator recognized, if the alternative distribution \xe2\x80\x9crequires cy pres in order to be\nviable, the presumption for saving the initial gift is strengthened. This is because the second\ngift\'s only practical advantage over the first\xe2\x80\x94that it can be plugged in automatically\xe2\x80\x94no\nlonger remains.\xe2\x80\x9d Chester, Cy Pres or Gift Over?, 23 Suffolk U.L. Rev. at 62 (citing Burr v.\nBrooks). The Third Restatement of Trusts has also expressly adopted this approach:\nA trust provision expressing the settlor\'s own choice of an alternative charitable\npurpose will be carried out, without need to apply the cy pres doctrine, assuming\nnot only that the initially specified purpose cannot be given effect or continued\nbut also that the alternative purpose is one that properly can be given effect.\n232\n\n\x0cRestatement 3d \xc2\xa7 67, cmt. b (emphasis added).\nThe approach expounded in Burr v. Brooks comports with the policies underlying cy\npres. Fundamentally, the doctrine exists to save a charitable trust from failure while\npreserving the settlor\'s original, charitable intent. Restatement 3d \xc2\xa7 67, cmt. b. Thus where\nboth the primary and alternative charitable distributions are impracticable, courts may\npresume that the settlor would have intended one or both purposes to survive under\napplication of cy pres.\nHere, the deeds provide that if the first purpose\xe2\x80\x94an educational nature preserve\noperated by HHS\xe2\x80\x94fails, the property passes to the State \xe2\x80\x9cfor and as a public park.\xe2\x80\x9d This\nsecondary purpose, however, is likewise impracticable. The DLNR determined that the land\nwas unsuitable for use as a public park, and that only a portion of the land could be used as a\nforest preserve and watershed. Thus, the Legislature approved the proposed land exchange,\nand the State filed a joinder in HHS\'s Petition. Redirecting the land to the State would not\neffectuate Mrs. Lucas\'s charitable intent. Rather, it would result in the failure of the trust. As\nin Burr, both the primary and alternative purposes of the gift are impracticable, as the land\ncannot feasibly be used for either purpose. Burr, 30 Ill. Dec. 744, 393 N.E.2d at 1095. The\nProbate Court therefore erred in concluding that the gift over rule precludes application of cy\npres.\nHHS, Tiana Partners, and the State request this court to remand the case with\ninstructions to apply cy pres to approve the proposed land exchange free and clear of the use\nrestrictions. We agree that cy pres so applies in this case.\nAs discussed above, cy pres applies where: (1) property is given in trust for a charitable\npurpose; (2) it is impracticable to carry out the specified charitable purpose; and (3) the\nsettlor manifested a general intent to devote the property to charitable purposes. Supra part\nIV(A). Here, those elements are met. Mrs. Lucas conveyed the land to HHS for charitable\npurposes for the use and benefit of the public. The parties do not dispute, and the evidence\nreadily establishes, that Mrs. Lucas\'s specified purposes for the land are both impracticable.\nThe conveyance also satisfies the traditional requirement of general charitable intent.\nIn determining whether the settlor possessed a general charitable intent, courts consider the\nlanguage of the instrument, the nature and duration of the gift, the character of the recipient\n233\n\n\x0corganization, the presence or absence of a reversionary clause, and the mode for effectuating\nthe gift. Am.Jur.2d \xc2\xa7 154. Courts may also consider extrinsic evidence of the settlor\'s\nprobable intent. Am.Jur. Proof of Facts 3d \xc2\xa7 20; accord Bogert on Trusts \xc2\xa7 437, at 160-73. If the\nsettlor intended the gift to \xe2\x80\x9cbe continued within the limits of its general purpose\xe2\x80\x9d rather than\ncease upon the failure of its specific purpose, this constitutes a general intent. Obermeyer, 140\nS.W.3d at 24. Gifts in support of educational goals often demonstrate a general charitable\nintent because there is a perpetual need and use for them. Id.; accord Bogert on Trusts \xc2\xa7 436, at\n157.\nIn this case, the deeds convey the land \xe2\x80\x9cfor and as a charitable gift\xe2\x80\x9d for the purpose\nof educating the public. They specify an alternative means of achieving the charitable\npurpose in the event the first method fails. The deeds thus confirm that Mrs. Lucas did not\nintend the trust to fail should use of the land become impracticable. See Bogert on Trusts \xc2\xa7 437,\nat 165-70 (gift over to another charitable purpose confirms general charitable intent); accord\nScott on Trusts \xc2\xa7 39.5.2, at 2713; First Nat\xe2\x80\x99l Bank of Chicago, 92 N.E.2d at 74. The declaration of\nMrs. Lucas\'s daughter, evidencing Mrs. Lucas\'s probable wishes regarding the property had\nshe been alive, further supports a general charitable intent.\nFinally, the proposed land exchange closely conforms to Mrs. Lucas\'s original\npurpose. The deed restriction contemplates a nature preserve to function \xe2\x80\x9cas an educational\nexperience for the public.\xe2\x80\x9d Mrs. Lucas\'s daughter attested that her mother intended to\ngenerally benefit the people of Hawai\xe2\x80\x98i by enabling HHS to provide \xe2\x80\x9can educational\nexperience for the public.\xe2\x80\x9d The Educational Fund preserves those goals by promoting\neducational programming that focuses on the natural environment. This use of the funds\nalso comports with Mrs. Lucas\'s lifelong interest and involvement with HHS. It\naccomplishes her probable wishes regarding the use of the land had she been aware of the\nobstacles preventing its development. Unlike in Burr v. Brooks, the interested parties all agree\nthat the proposed land exchange effectuates Mrs. Lucas\'s charitable intent as nearly as\npossible. Cf. Burr, 30 Ill. Dec. 744, 393 N.E.2d at 1095. This unanimous accord further\nsupports applying cy pres to approve the transaction. See Restatement 2d 399, cmt. f; Bogert on\nTrusts \xc2\xa7 442, at 258 (recognizing that wishes of trustees, beneficiaries, attorney general, and\nother interested parties warrant consideration). There is no evidence, either extrinsic or in\nthe deeds themselves, to support a contrary conclusion.\n234\n\n\x0cV. CONCLUSION\nFor these reasons, we conclude that the Probate Court erred in concluding that cy\npres is not applicable to approve the proposed transaction on the basis that the deeds provide\nfor an alternative distribution. Accordingly, we vacate the Judgment and remand to the\nProbate Court to apply cy pres consistent with this Opinion.\nClass Discussion Tool One\nAaron\xe2\x80\x99s will contains the following provision:\n\xe2\x80\x9cThe rest, residue and remainder of my estate, real, personal, intangible and\nmixed, of whatsoever kind and wherever situated I leave in trust to my wife\nDiane for her life. After Diane dies, the funds in the trust are to go to State\nBank in trust to be used to send five members of my church choir a year to\nthe Oak River Wellness Center. The trustee is to use the annual net income\nof the trust property to fund the trips, and has the discretion to select the five\nmembers. The trustee must select the five members by May 1st of each year.\nThe trust is to continue until the death of Pastor Ben Franklin and\nChoirmaster Joy Williams. Then, the trust corpus is to be divided between\nany of my living blood descendants.\xe2\x80\x9d\nAfter Diane died, the trustee started following the terms of the trust. A few years\nlater, the church choir decided to go in another direction, so the church discharged Williams.\nThe church hired Kirk, Pastor\xe2\x80\x99s Franklin\xe2\x80\x99s son. Kirk recruited younger members. Thus, the\naverage age of the choir went from 58 to 24. Given the youngness of the choir and the\ncongregation, Kirk decided to start performing hip hop gospel music. He added other\ninstruments, including drums and cymbals, to accompany the piano and organ.\nDuring a storm, the roof of the church started leaking. As a result, the church\xe2\x80\x99s\npiano and organ were damaged. The church does not have the money to replace the\nequipment. The members of the church believe that, in order to make a joyful noise unto the\nLord, they need music. Therefore, they refuse to continue performing without music. The\nchoir requested that the trustee use some of the annual trust income to purchase new\nmusical equipment.\n\n235\n\n\x0cThe town of Play, located 45 minutes away from the church, recently opened up a\nnew age spa. Oak River is a resort town located four hours away from where the church is\nlocated. The members of the choir asked the trustee to send members to the new spa instead\nof the wellness center. It would be cheaper to go to the new spa than the wellness center, so\nmore than five choir members would be able to attend.\nPastor Franklin was injured in a car accident and is in a coma. It is unclear when, or\nif, he will regain consciousness. He is not brain dead.\nThe trustee would like to know what he should do. Please analyze all of the relevant\nlegal issues.\nClass Discussion Tool Two\nJudy was a practicing vampire priestess. During her lifetime, she spent a great deal of\nmoney supporting activities sponsored by members of the local vampire temple. Judy\nbelieved that vampires had evolved and were able to live normal lives. As a consequence,\nJudy and the members of the temple believed that modern vampires could walk in sun light\nwithout being injured. The members of the temple also believed that, although vampires\nwere immortal, they aged. In her will, Judy created the following trust. \xe2\x80\x9cI leave one million\ndollars in trust to the town of Bloodville in order for them to build a retirement home for\naging vampires.\xe2\x80\x9d\nAfter Judy died, the City Council of Bloodville accepted the trust funds. At that time,\nthe vampire temple had been destroyed by fire and most of the practicing vampires had left\nthe area. The City Council voted to use the million dollars in the trust to build an apartment\ncomplex for low-income senior citizens who lived in the town.\nAfter the apartment complex was partially built, the executor of Judy\xe2\x80\x99s estate sued to\nget an injunction to prevent the City Council from using the trust money to build the\napartment complex. What result?\n\n236\n\n\x0cChapter 8 Supervision/Enforcement of\nCharitable Trusts\nThe charitable trust is considered to be a public trust. Instead of the beneficiary of\nthe trust being a specific ascertainable person, the trust must be meant to benefit a particular\norganization or class of persons. Since a charitable trust is a public trust, unlike the case\ninvolving a private trust, the beneficiary of the charitable trust does not have standing to\nforce the trustee to live up to his fiduciary duties. The state attorney general or another\ngovernment official has the authority to enforce the provisions of a charitable trust. Unless\nthe trust provides otherwise, the donor does not have authority to enforce the charitable\ntrust.\n\n8.1\n\nDonor Standing\n\nRussell v. Yale University, 737 A.2d 941\nLAVERY, J.\nThe plaintiffs, an heir of the settlor of a charitable trust, alumni donors and students\nof the named defendant, Yale University (Yale), appeal from the judgment of dismissal\nrendered by the trial court in granting the Yale\'s motion to dismiss, which asserted that the\ntrial court lacked subject matter jurisdiction on the ground that the plaintiffs lacked standing.\nOn appeal, the plaintiffs claim that the trial court improperly granted Yale\'s motion to\ndismiss because, where the attorney general elects not to participate in a proceeding\ninvolving a charitable trust, a person with a \xe2\x80\x9cspecial interest\xe2\x80\x9d may appear on behalf of the\ntrust to protect the interests of the beneficiaries and that the plaintiff heir, alumni donors\nand students have the special interest necessary to confer standing on them. We affirm the\njudgment of the trial court.\nThe following facts are necessary for our resolution of this appeal. Yale is a\nnonprofit corporation organized pursuant to a 1745 charter, which was reconfirmed in\narticle eighth, \xc2\xa7 3, of the constitution of Connecticut in 1965. The settlor, John W. Sterling,\n237\n\n\x0cdied in 1918. At that time, he left, in trust, money for the erection of a building or buildings\nthat would constitute a fitting memorial reflecting his gratitude and affection for his alma\nmater, Yale. The trustees were given broad discretion in the disposition of these funds and\ndirected, if their discretion made it advisable, to consult with Sterling\'s sisters with regard to\nthe use of the funds. The will directed that the money not be used for the purchase of land\nor as part of Yale\'s general fund. In 1930, the Sterling trustees voted to contribute money for\nthe erection and maintenance of the divinity school quadrangle that bears Sterling\'s name.\nNo other restrictions existed in the will and no property rights were reserved for Sterling\'s\nheirs by the will.\nThe divinity school is one of Yale\'s graduate professional schools, which educates\nmen and women for the Christian ministry and provides theological education for persons\nengaged in other professions. Prior to the commencement of this action, the president of\nYale appointed a committee to undertake a comprehensive study of the divinity school and\nits future. In late 1996, the Fellows of the Yale Corporation approved certain\nrecommendations, as made to them by the president and dean of the divinity school, calling\nfor the reorganization of the divinity school, including the demolition of large portions of\nthe Sterling Divinity Quadrangle.\nThe plaintiffs took exception to the reorganization and instituted this action seeking\na temporary and permanent injunction enjoining Yale from carrying out the reorganization, a\ndeclaratory judgment that Yale\'s reorganization plan constitutes an abuse of discretion as a\ntrustee of a public charitable trust, and an accounting of all gifts and donations Yale received\nfor the benefit of the divinity school and of charges against the divinity school\'s endowment.\nYale moved to dismiss the complaint on the ground that the plaintiffs lack standing to bring\nsuit. The trial court granted the motion to dismiss and the plaintiffs appealed. Additional\nfacts will be addressed as necessary.\n\xe2\x80\x9cIt is a basic principle of our law ... that the plaintiffs must have standing in order for\na court to have jurisdiction to render a declaratory judgment.... A party pursuing declaratory\nrelief must ... demonstrate, as in ordinary actions, a justiciable right in the controversy sought\nto be resolved, that is, contract, property or personal rights ... as such will be affected by the\n[court\'s] decision.... When standing is put in issue, the question is whether the person whose\nstanding is challenged is a proper party to request an adjudication of the issue and not\n238\n\n\x0cwhether the controversy is otherwise justiciable, or whether, on the merits, the plaintiff has a\nlegally protected interest that the defendant\'s action has invaded....\n\xe2\x80\x9cStanding is established by showing that the party claiming it is authorized by statute\nto bring suit or is classically aggrieved.... The fundamental test for determining aggrievement\nencompasses a well-settled twofold determination: first, the party claiming aggrievement\nmust successfully demonstrate a specific, personal and legal interest in [the challenged\naction], as distinguished from a general interest, such as is the concern of all members of the\ncommunity as a whole. Second, the party claiming aggrievement must successfully establish\nthat this specific personal and legal interest has been specially and injuriously affected by the\n[challenged action].... The determination of aggrievement presents a question of fact for the\ntrial court and a plaintiff has the burden of proving that fact.... The conclusions reached by\nthe trial court cannot be disturbed on appeal unless the subordinate facts do not support\nthem.... Where a plaintiff lacks standing to sue, the court is without subject matter\njurisdiction.\xe2\x80\x9d (Citations omitted; internal quotation marks omitted.) Steeneck v. Univeristy of\nBridgeport, 235 Conn. 572, 578-80, 668 A.2d 688 (1995).\n\xe2\x80\x9cA motion to dismiss admits all facts well pleaded and invokes any record that\naccompanies the motion, including supporting affidavits that contain undisputed facts Barde\nv. Board of Trustees, 207 Conn. 59, 63, 539 a.2d (1988).. A motion to dismiss raises the\nquestion of whether a jurisdictional flaw is apparent on the record or by way of supporting\naffidavits. Bradley\xe2\x80\x99s Appeal from Probate, 19 Conn. App. 456, 461-62, 563 A.2d 1358 (1989).\xe2\x80\x9d\nCarl J. Herzog Foundation Inc. v. University of Bridgeport, 41 Conn. App. 790, 793, 677 A.2d 1378\n(1996), rev\'d on other grounds, 243 Conn. L. 699 A.2d 995 (1997).\nAlthough Carl J. Herzog Foundation, Inc. v. University of Bridgeport, 243 Conn. 1, 699\nA.2d 995 (1997) concerns the interpretation of a statute, in that case, our Supreme Court set\nout, at length, the common-law rule with regard to standing to bring suit against a charitable\nentity, which controls the issues here. \xe2\x80\x9cAt common law, a donor who has made a completed\ncharitable contribution, whether as an absolute gift or in trust, had no standing to bring an\naction to enforce the terms of his or her gift or trust unless he or she had expressly reserved\nthe right to do so. Where property is given to a charitable corporation and it is directed by\nthe terms of the gift to devote the property to a particular one of its purposes, it is under a\nduty, enforceable at the suit of the [a]ttorney [g]eneral, to devote the property to that purpose.... At\n239\n\n\x0ccommon law, it was established that [e]quity will afford protection to a donor to a charitable\ncorporation in that the [a]ttorney [g]eneral may maintain a suit to compel the property to be held\nfor the charitable purpose for which it was given to the corporation.... The general rule is\nthat charitable trusts or gifts to charitable corporations for stated purposes are [enforceable]\nat the instance of the [a]ttorney [g]eneral.... It matters not whether the gift is absolute or in\ntrust or whether a technical condition is attached to the gift.\xe2\x80\x9d (Citations omitted; emphasis in\noriginal; internal quotation marks omitted.) Id., at 5-7, 699 A.2d 995; see also 4A A. Scott,\nTrusts (4th Ed. Fratcher 1989) \xc2\xa73481.\n\xe2\x80\x9c[T]he donor himself has no standing to enforce the terms of his gift when he has\nnot retained a specific right to control the property, such as a right of reverter, after\nrelinquishing physical possession of it.... As a matter of common law, when a settlor of a\ntrust or a donor of property to a charity fails specifically to provide for a reservation of rights\nin the trust or gift instrument, neither the donor nor his heirs have any standing in court in a\nproceeding to compel the proper execution of the trust, except as relators.... There is no\nsuch thing as a resulting trust with respect to a charity.... Where the donor has effectually\npassed out of himself all interest in the fund devoted to a charity, neither he nor those\nclaiming under him have any standing in a court of equity as to its disposition and control.\xe2\x80\x9d\n(Citations omitted; internal quotation marks omitted.) Car J. Herzog Foundation, Inc. v.\nUniversity of Bridgeport, 243 Conn. at 7-8, 699 A.2d 995.\nThe trial court found the facts noted previously in this opinion and concluded that if\nSterling were alive today, he would have no right to enforce conditions of his gift, and that,\ntherefore, his heir and successor lacks standing to bring this suit, as well. We agree. See id. at\n5-6, 699 A.2d 995.\nFor the same reasons, the trial court also concluded that the plaintiff alumni donors\nalso lack standing as contributors of unrestricted charitable gifts to their alma mater and\nnothing about the fact that they are graduates of the divinity school gives them standing. We\nagree with that conclusion as well. See id.\nWith regard to the third group of plaintiffs, the students, the trial court determined\nthat they also lack standing. We agree with the trial court and hold that, absent special injury\nto a student or his or her fundamental rights, students do not have standing to challenge the\nmanner in which the administration manages an institution of higher education. See Trustees of\n240\n\n\x0cDartmouth College v. Woodward, 17 U.S. 518, 641, 4 L.Ed. 629 (1919), Miller v. Alderhold, 228\nGa. 65, 184 S.E.2d 172 (1971). The plaintiff students lack standing because they alleged no\ninjuries to themselves or to any of their fundamental rights, collectively or individually.\nWe hold, therefore, that the trial court properly concluded that, although the\nplaintiffs are sincere in their efforts to maintain the divinity school as a leader in theological\neducation and preparation for the Christian ministry and they acted in good faith based on\nmotives that are beyond question, the plaintiffs, as a matter of law, lack standing to\nadjudicate the equitable remedies they seek.\nThe judgment is affirmed.\n\nHatdt v. Vitae Foundation, 302 S.W.3d 133\nKAREN KING MITCHELL, Judge.\nEdwin Hardt and Karl Hardt (\xe2\x80\x9cthe Hardts\xe2\x80\x9d) appeal from the circuit court\'s judgment\ndismissing for lack of standing their petition to enforce their charitable gift and the\nconditions thereon to the Vitae Foundation, Inc. (\xe2\x80\x9cVitae\xe2\x80\x9d). We affirm.\nFactual and Procedural Background\nAppellants Edwin Hardt and Karl Hardt are executors of the estate of Selma J.\nHartke. Pursuant to Ms. Hartke\'s will, they were given discretion to distribute the remainder\nof her estate to charitable organizations of their choosing. The Hardts determined to use a\nlarge portion of the estate to support the pro-life cause. In January 2001, the Hardts\nrequested a meeting with Vitae, a non-profit charitable corporation describing itself as an\n\xe2\x80\x9cadvertising campaign for life ... [that] research[es], produce[s] and purchase [s] airtime in an\neffort to encourage a greater respect for human life, restore traditional values in our\nAmerican culture, and reduce the number of abortions by using mass media education.\xe2\x80\x9d The\nHardts requested that Vitae submit a proposal for a possible grant.\nIn March 2001, the Hardts met with Sandra Faucher, Vitae\'s then-National Project\nDirector, and Vitae\'s President Carl Landwehr. Vitae presented a grant proposal to the\nHardts at that meeting, which focused on ten of the top twenty-five media markets in the\nUnited States. The proposal stated that Vitae planned to air media campaigns in all twentyfive media markets by 2003 but that Vitae lacked the funding to effectuate this goal in the\n241\n\n\x0cten markets contained in the proposal. Vitae stated that airing media campaigns in all of the\ntop twenty-five markets was vitally important because television advertising was the most\neffective way of reaching women most vulnerable to abortions. The proposal set out a dollar\nfigure for funds needed in each of the ten markets in order to fulfill Vitae\'s goals of airing\nmedia campaigns there. To illustrate why the Hardts\' gift was needed, the proposal also\ncontained a brief description of each market\'s importance, the type of broadcast to be used,\nthe relative cost of broadcasting there, and the current status of local financial support.\nMs. Faucher suggested at the March 2001 meeting that any gift from the Hardts be\nused as a \xe2\x80\x9cmatching gift,\xe2\x80\x9d to be spent in equal proportions to funds raised by Vitae in each\nof the ten markets. By utilizing this 50/50 matching concept, the grant would entice other\ndonations in the various markets to ensure a lasting donor base for future media campaigns.\nOn March 9, 2001, following the meeting and proposal, the Hardts granted to Vitae\n$4,242,000 (\xe2\x80\x9c2001 gift\xe2\x80\x9d), the total amount identified in the proposal as needed to air media\ncampaigns to the ten specified markets. A letter of intent accompanied the grant to Vitae,\nwhich stated the grant was given:\nto permit the development of Florida, Oregon, Ohio, Maryland, Texas,\nArizona, and Washington and Generation Y in San Francisco and Los\nAngeles as set forth in the proposal prepared for Ed Hardt dated March\n2001. It is their understanding that the Foundation will use these funds as a\nchallenge gift so that the funds will not be fully consumed in the initial media\ncampaign but will be the basis for establishing an ongoing presence in these\nmarkets.\nOn March 12, 2001, receipt of the gift was acknowledged and the letter of intent was\nsigned by Landwehr as \xe2\x80\x9cagree[ing] to the terms and conditions of the gift.\xe2\x80\x9d\nIn November of 2002, the Hardts granted an additional $4,000,000 from the estate\nto Vitae (\xe2\x80\x9c2002 gift\xe2\x80\x9d). Of this gift, $3,000,000 was to be used as matching funds for media\ncampaigns in markets of Vitae\'s choosing. The additional $1,000,000 was to be used by Vitae\nfor the continued development of a website aimed at teens without mention of matching\nfunds. This additional $1,000,000 is not at issue in this suit.\nIn August of 2003, Ms. Faucher contacted the Hardts\' counsel and informed him\n242\n\n\x0cthat some portions of the Hardts\' grant to Vitae were not being used in accordance with the\nconditions placed on the gifts but, instead, were being expended for administrative expenses,\nincluding the hiring of significant new staff members, and were being spent without the\nreceipt of matching funds. She also told the Hardts\' counsel that Vitae\'s promised expansion\nof media campaigns in new markets was not occurring.\nOn September 8, 2003, the Hardts requested an accounting from Vitae with respect\nto both gifts. On September 26, 2003, Landwehr sent a letter to the Hardts indicating that\nsubsequent to their gifts, Vitae had adopted a new development strategy. The Hardts later\nlearned that little money was being used for media campaigns at all.\nOn January 13, 2004, Landwehr sent a letter to the Hardts describing a \xe2\x80\x9cradically\ndifferent\xe2\x80\x9d development strategy that he had implemented subsequent to the Hardts\' gifts.\nThe new strategy \xe2\x80\x9cscaled back\xe2\x80\x9d Vitae\'s plans to enter additional media markets and, instead,\nfocused on building relationships with \xe2\x80\x9chigh level influential leaders\xe2\x80\x9d in the various markets\nand building an \xe2\x80\x9coperational support team\xe2\x80\x9d to assist with new fundraising.\nThe Hardts claim that the last accounting provided to them by Vitae, dated June 30,\n2005, evidences extensive misuse of the 2001 gift as:\n(a) nearly half of the funds expended have been spent on administrative expenses,\nin fact, in multiple markets no media expenditures have been made whatsoever,\n(b) the gift has been spent in the absence of the receipt of matching funds, and (c)\nfunds have been spent in markets not part of the terms of the 2001 gift.\nThe Hardts also claim that they have not received sufficient information from Vitae\nto ascertain whether Vitae has fully complied with its restrictions in regard to the 2002 gift.\nOn August 6, 2008, the Hardts filed a petition in the Cole County Circuit Court\nseeking: (a) a detailed accounting of both the 2001 and 2002 gifts, (b) the restoration of any\npart of either gift spent in contravention of conditions placed on the gifts, (c) an injunction\npreventing any future expenditure of funds from either gift in any manner inconsistent with\nthe applicable conditions, or (d) in the alternative, the transfer of the 2001 gift to another\ncharitable organization of the Hardts\' choosing.\nOn September 22, 2008, Vitae filed a motion to dismiss the Hardts\' petition. The\n243\n\n\x0cmotion was heard by the trial court on November 25, 2008. On December 5, 2008, the trial\ncourt granted the motion to dismiss and held that the Hardts lacked standing to bring their\nclaims.\nStandard of Review\nWhen reviewing the trial court\'s granting of a motion to dismiss, \xe2\x80\x9cwe engage in an\nessentially de novo review of an issue of law.\xe2\x80\x9d In re Swearingen, 42 S.W.3d 741, 745 (Mo. App.\nW.D. 2001) (internal quotation marks omitted). We assume all of the facts alleged in the\nplaintiffs\' petition are true. Id. However, \xe2\x80\x9cit is not enough that the plaintiff alleges a cause of\naction existing in favor of someone; he must show that it exists in favor of himself, and that\nit accrued to him in the capacity in which he sues.\xe2\x80\x9d Voelker v. Saint Louis Mercantile Library\nAss\xe2\x80\x99n, 359 S.W.2d 689, 693 (Mo. 1962) (internal quotation marks omitted).\nLegal Analysis\nAt common law, only the Attorney General had standing to enforce the terms of a\ncharitable gift. Id. at 695. This rule applied to gifts both to charitable trusts and charitable\ncorporations and was made primarily to prevent potential beneficiaries without a \xe2\x80\x9cspecial\ninterest\xe2\x80\x9d in the gift from \xe2\x80\x9cvex [ing]\xe2\x80\x9d public charities with \xe2\x80\x9cfrequent suits, possibly based on\nan inadequate investigation.\xe2\x80\x9d Id. Since the Attorney General represents the public at large, he\ncan enforce the terms of the charitable donation on behalf of all of the beneficiaries, which\nfor public charities means the general public.\nDonors were also prevented from enforcing their gifts in court, because non-trustee\ndonors retained no interest in the gift, \xe2\x80\x9cexcept the sentimental one that every person who\ncontributed\xe2\x80\x9d to the charity would be presumed to have. Id. at 694.. Accordingly, the donor\nwas left with no ability to make sure the charitable organization used the gift according to\nthe gift\'s terms and conditions.\nAn exception to this rule existed, however, when the donor specifically made the\ncharitable gift subject to a condition subsequent to the donation. In these cases, if the\ncharitable trust or charitable corporation failed to perform the specified act, the gift would\nrevert back to the donor or to a designated third party. L.B. Research & Educ. Found v. UCLA\nFound, 130 Cal.App. 4th 171, 29 Cal.Rptr.3d 710, 713 (2005). The donor of such a gift had\nstanding to enforce the conditions placed on the gift because it retained an interest in the\n244\n\n\x0cproperty. Id. at 714. The parties agree that this exception does not apply in this case.\nRecently, there has been a trend in the law to give donors more control over the\nenforcement of the terms of their charitable gifts. In 2005, Missouri adopted the Uniform\nTrust Code (\xe2\x80\x9cMUTC\xe2\x80\x9d). This law specifically granted settlors of charitable trusts the ability to\n\xe2\x80\x9cmaintain a proceeding to enforce the trust.\xe2\x80\x9d \xc2\xa7 456.4-403.3 RSMo. The law was also made\nretroactive to apply to trusts created before its enactment. 456.11-1106 RSMo The law, on\nits face, clearly applies only to trusts.\nThe Hardts do not claim that their gift was made in trust, constructive or otherwise.\nThey simply contend that the MUTC also applies to gifts made, absent a trust, to charitable\ncorporations. To support this contention, they cite Voelker, a case from 1962. In Voelker, the\ncourt specifically held that only the Attorney General had standing to sue but did remark\nthat \xe2\x80\x9cmany of the principles applicable to charitable trusts are applicable to charitable\ncorporations.\xe2\x80\x9d 359 S.W.2d at 694. (internal quotation marks omitted).\nThe Hardts argue that because common law charitable trust principles have often\napplied to charitable corporations, newly enacted statutes addressing only charitable trusts\nmust also apply to charitable corporations. The extension of common law charitable trust\nprinciples to gifts to charitable corporations is not enough to authorize this court\'s extension\nof the MUTC, a statutory provision that on its face applies only to charitable trusts, to gifts\nmade outright to charitable corporations.\nWhere the language of a statute is clear and unambiguous, there is no room for\nconstruction. In re Brams Trust #2 v. Haydon, 266 S.W.3d 307, 312 (Mo. App. W.D. 2008).. If\na term is defined within a statute, a court must give effect to the legislature\'s definition. Jones\nv. Dir. of Revenue, 832 S.W.2d 516, 517 (Mo. Banc. 1992). Not only does the MUTC grant\nonly the settlor of a charitable trust the right to maintain an action to enforce conditions of a\ntrust, it also defines \xe2\x80\x9ccharitable trust\xe2\x80\x9d and \xe2\x80\x9csettlor.\xe2\x80\x9d A \xe2\x80\x9ccharitable trust\xe2\x80\x9d is \xe2\x80\x9ca trust, or\nportion of a trust, created for a charitable purpose,\xe2\x80\x9d and a \xe2\x80\x9csettlor\xe2\x80\x9d is \xe2\x80\x9ca person, including a\ntestator, who creates, or contributes property to, a trust.\xe2\x80\x9d See \xc2\xa7456.1-103 RSMo. As such, the\nMUTC is limited by its unambiguous terms to charitable trusts, and this court lacks the\nauthority to apply common law precedent to construe the legislation in a manner that is\ninconsistent with the express language of the MUTC.\n\n245\n\n\x0cMoreover, just this year, Missouri adopted the Uniform Prudent Management of\nInstitutional Funds Act (\xe2\x80\x9cUPMIFA\xe2\x80\x9d), which expressly applies to both charitable trusts and\nnonprofit corporations. This law grants charitable organizations more discretion than they\nmay have had under the common law to make prudent investment decisions regarding\ncharitable funds and endowments. While the UPMIFA stresses that charitable fund\nmanagers give primary consideration to the donor\'s intent as expressed in the gift\ninstrument, it does not expressly grant the donor standing to enforce this intent as the\nMUTC does in the case of charitable trusts. On the contrary, the prefatory note explicitly\nacknowledges that \xe2\x80\x9cthe [A]ttorney [G]eneral continues to be the protector both of the donor\'s\nintent and of the public\'s interest in charitable funds.\xe2\x80\x9d National Conference of\nCommissioners on Uniform State Laws, Preferatory Note, Uniform Prudent Management of\nInstitutional Funds Act, at 4 (2006) (emphasis added). The UPMIFA is retroactive and does,\ntherefore, apply to the Hardts\' gifts. Thus, the two statutory schemes are inconsistent with\nrespect to the enforcement of donor intent. A comment to the UPMIFA specifically\nacknowledges this possibility, stating, \xe2\x80\x9c[t]rust precedents have routinely been found to be\nhelpful but not binding authority in corporate cases.\xe2\x80\x9d In fact, the drafters of the UPMIFA\nreportedly considered an amendment granting standing to donors, and yet the amendment is\nabsent from the final version adopted by the drafting committee. See Marion R. Freemont\xe2\x80\x93\nSmith, The Search for Greater Accountability of Nonprofit Organizations: Recent Legal Development and\nProposals for Change, 76 Fordham L.Rev. 609, 621-22 (2007). For these reasons we find no\nstatutory authority granting standing to the Hardts to enforce the restrictions of their gift.\nThe Hardts\' second argument is that even if there is no statutory authority giving\nthem standing to sue, Missouri should follow New York, which recently expanded the\ncommon law to allow donors to sue to enforce the terms of charitable gifts. In Smithers v. St.\nLuke\xe2\x80\x99s-Roosevelt Hospital Center, 281 A.D.2d 127, 123 N.Y.S2d 426, 427 (N.Y. App. Div.\n2001), a man made a charitable gift to a hospital over the span of many years. His gift was\nsubject to many restrictions on how the money could be spent, and the hospital expressly\nagreed to his restrictions. Id. at 428. The donor kept a close watch on the hospital\'s actions,\nwithholding future installments of the gift until he was satisfied that the hospital was\ncomplying with his wishes. Id. at 427-28.\nYears after the gift was complete, the donor passed away. His widow became\n246\n\n\x0cconcerned that the hospital was not using the charitable gift pursuant to the restrictions. She\nnotified the Attorney General, who became involved with the enforcement of the\nrestrictions. Id. at 429. Not satisfied with the vigilance of the Attorney General, the widow\nsued to enforce the restrictions. Id. at 430-31. The court noted that New York statutes rested\nstanding to enforce restrictions with the Attorney General. This was true for both charitable\ntrusts and absolute gifts. Id. However, the court found that the common law granted the\ndonor standing as well, stating, \xe2\x80\x9c[t]he donor of a charitable gift is in a better position than\nthe Attorney General to be vigilant and, if he or she is so inclined, to enforce his or her own\nintent.\xe2\x80\x9d Id. at 434. There was a vigorous dissent, which argued that the majority\nimpermissibly expanded the common law. Id. at 440.\nArguing that \xe2\x80\x9cpublic policy\xe2\x80\x9d favors granting donors standing to enforce restrictions\non charitable gifts, the Hardts urge this court to follow New York\'s example. They claim that\nthe donor\'s interest is distinct from that of the Attorney General and hint that the Attorney\nGeneral might not be vigilant or might even have a conflict of interest in enforcing the\nrestrictions of the gift. This argument is not persuasive. In this case, unlike in Smithers, there\nis no indication in the record that the Attorney General was even notified of Vitae\'s failure\nto comply with the conditions. The Hardts apparently did not attempt to involve the\nAttorney General in the matter, taking it directly to court based upon their own interests.\nWhile it is conceivable that there may be times when the Attorney General does not\nsufficiently represent a donor\'s interest, it has not been shown to be the case here, and we\nfind no reason to expand the common law to give standing to the Hardts. Indeed, in light of\nthe legislature\'s passage of the UPMIFA, it would not be appropriate for us to do so.\nFinally, the Hardts claim that the trial court erred in dismissing their action because\nthe cy pres doctrine could be used to transfer their gift to another charity that will act\nconsistent with the conditions they placed on the gift. The trial court\'s order stated that\n\xe2\x80\x9cMissouri law is clear that the cy pres doctrine applies only to trusts.\xe2\x80\x9d This is a misstatement\nof Missouri law. Obermeyer plainly states, \xe2\x80\x9c[w]hile acknowledging the historical limitation of\nthe cy pres doctrine to trusts, the doctrine is appropriate in certain cases involving gifts to\ncharitable corporations.\xe2\x80\x9d 140 S.W.3d at 23. The Obermeyer court then goes on to apply the\ndoctrine to facilitate the completion of a charitable gift. Id. at 24-27.\nDespite the trial court\'s misreading of Obermeyer we do not find the doctrine of cy\n247\n\n\x0cpres applicable to this case. Cy pres \xe2\x80\x9cis based on the concern of equity to protect and\npreserve charitable bequests.\xe2\x80\x9d Id. at 22. Cy pres means \xe2\x80\x9cas near as possible\xe2\x80\x9d to the intent of\nthe donor and is used to prevent, if possible, charitable gifts from failing. Id. at 23. The\nObermeyer case is typical of those to which cy pres applies. In that case, a donor left a portion\nof his estate to his nieces and nephews for the duration of their lives, with the residue to go\nto a particular fund at the dental school of Washington University. Id. at 20. By the time the\nnieces and nephews were all deceased, neither the fund nor the dental school was in\nexistence. Id. The court found, looking to both the gift instrument and extrinsic evidence,\nthat the donor had the general donative intent to give the money to Washington University\nto be used for the support of dental education and so allowed the gift to be completed to the\nUniversity.\nThis case is nothing like Obermeyer or any other case the Hardts cite using or\nconsidering the cy pres doctrine. Here, the gift was completed. The donee did not cease to\nexist. There was not a substantial separation of time between the granting of the gift and its\ncompletion. The Hardts simply feel that Vitae is not using the gift pursuant to the\nrestrictions imposed when the gift was given. Accordingly, cy pres is not applicable.\nFurthermore, if cy pres were appropriate, the Hardts would still face their standing challenge.\nAssuming the Hardts\' gift to Vitae is subject to legitimate, enforceable restrictions\nand that Vitae is not using the gift appropriately pursuant to those restrictions, the Hardts\'\ncourse of action should be to notify the Attorney General and to ask him to enforce the\nrestrictions. Therefore, and for all of the above reasons, we affirm the judgment of the trial\ncourt.\n\n8.2\n\nBeneficiary Standing\n\nWarren v. Board of Regents of the University System of Georgia, 544 S.E. 2d 190\nMILLER, Judge.\nPlaintiff-appellants Carl S. Warren and Earl Davis contributed money to a charitable\ntrust establishing the Herbert E. Miller Chair in Financial Accounting, an endowed chair in\nthe Terry College of Business at the University of Georgia. They subsequently sued the\nBoard of Regents of the University System of Georgia, the University of Georgia\nFoundation, and Russell Barefield as the Director of the J.M. Tull School of Accounting at\n248\n\n\x0cthe University of Georgia, alleging a breach of fiduciary duty under the terms of the trust. In\nessence, plaintiffs claimed the Miller Chair was harmed when Barefield, allegedly ignoring\nboth appointment criteria under the trust and university hiring procedures, named an\nunqualified, non-certified Public Accountant personal friend as the first holder of the Miller\nChair in Financial Accounting and caused more than $135,000 to be improperly paid to that\nholder between **192 1992 until his resignation in 1996. Plaintiffs prayed for an accounting,\nthe return to the trust of all money paid to the chairholder, and the disqualification of\nBarefield as administrator or trustee.\nDefendants admitted the chronology while denying the material allegations regarding\nbreach of fiduciary duty and immediately moved to dismiss the complaint. The trial court\ngranted these collective motions, concluding that standing to enforce the terms of the\ncharitable Miller Trust is granted exclusively to the Attorney General under OCGA \xc2\xa7 53-12115. The trial court further determined that there was no just reason for delay and made the\ndismissal final under OCGA \xc2\xa7 9-11-54(b).\nPlaintiffs appealed directly to the Supreme Court of Georgia, which transferred the\ncase to the Court of Appeals. They contend dismissal was erroneous because they have a\nspecial interest that confers standing to enforce the trust and because the Attorney General\nought to be disqualified. We affirm the dismissal due to lack of standing.\n1. Plaintiffs argue that the Attorney General is not the only entity authorized to bring\nsuit to enforce the terms of a charitable trust where the plaintiffs have a special interest.\nIt is undisputed that the Miller Trust is a charitable trust, in that it promotes human\ncivilization through the advancement of education by paying a salary supplement to the\nholder of the endowed chair. Since 1952, Georgia law has provided,\n[i]n all cases in which the rights of beneficiaries under a charitable trust are\ninvolved, the Attorney General ... shall represent the interests of the\nbeneficiaries and the interests of this state as parens patriae in all legal matters\npertaining to the administration and disposition of such trust.\nScott\'s treatise on trusts explains:\nIt is frequently said in the cases that the Attorney General alone has [the]\npower to maintain suits for the enforcement of charitable trusts. This,\n249\n\n\x0chowever, is not strictly true. It is clear, for example, that where there are several\ntrustees, one of them may maintain an action against the others to enforce the\ntrust or to compel the redress of a breach of trust.\nIn such a case, or where suit is brought by others to invalidate a charitable trust, the\nAttorney General is a necessary party. The language of OCGA \xc2\xa7 53-12-115 does not address\n\xe2\x80\x9cspecial interests\xe2\x80\x9d and does not forbid co-trustees from bringing suit to enforce the\ncharitable trust. Nor does that Code section expressly make the Attorney General (or district\nattorney) the sole or exclusive representative of the beneficiaries. Its mandatory language\nclearly makes that officer the primary or presumptive representative and so a necessary party.\nWe note that the Restatement provides:\nA suit can be maintained for the enforcement of the charitable trust by the\nAttorney**193 General or other public officer, or by a co-trustee, or by a person\nwho has a special interest in the enforcement of the charitable trust, but not by\npersons who have no special interest or by the settlor or his heirs, personal\nrepresentatives or next of kin.\nThe Restatement is consistent with Georgia law allowing certain individuals who\nhave a special interest in a charitable trust to maintain an action to enforce its provisions.\nSince the General Assembly is presumed to enact legislation with full knowledge of the\nexisting condition of the law, including decisions by the courts, we conclude that the 1952\nact as amended does not make the Attorney General (or district attorney) the exclusive entity\nauthorized to initiate a suit to enforce a charitable trust, where individuals can demonstrate a\nspecial interest.\n2. Nevertheless, we conclude that plaintiffs, either as contributors to the trust or as\nfaculty members who might be eligible to be named to the Miller Chair, fail to demonstrate\nthat special interest.\nThe rule is settled that an individual member of the public has no right, as such, to\nmaintain a suit to enforce or administer a benevolent or charitable trust. While a person\nhaving a special interest is sometimes permitted to maintain a suit to enforce a charitable\ntrust, the mere possibility that one may be a beneficiary of a charitable trust does not give\nhim standing to maintain a suit to enforce the trust. Thus, those who can enjoy the status of\n250\n\n\x0cbeneficiaries only when selected by the trustees are generally held to have no right to initiate a suit\nfor the enforcement of a charitable trust. The reason is that if any third person were\npermitted to sue as a matter of right it would ... subject the charity to harassing litigation.\nSimilarly, the comments to the Restatement confirm that \xe2\x80\x9c[t]he mere fact that a\nperson is a possible beneficiary is not sufficient to entitle him to maintain a suit for the\nenforcement of a charitable trust.\xe2\x80\x9d To authorize an individual to enforce a charitable trust in\nGeorgia, the plaintiff must have some pecuniary interest in it or show that she is a\nbeneficiary or else show in some way she may avail herself of its educational advantages.\nA charitable trust for the promotion of education may provide that particular\npersons shall be entitled to a preference to benefits under the trust, in which case any such\nperson can maintain an enforcement suit. But the selection criteria of the trust agreement in\nthis case do not identify either plaintiff, by name, position, or association, as a member of a\nclass of potential beneficiaries entitled to a preference. Indeed, the trust specifies that the\n\xe2\x80\x9cfirst chairholder will be a new appointee to the University of Georgia faculty,\xe2\x80\x9d thus\nexcluding a current or former faculty member. Plaintiffs have no standing to enforce this\ncharitable trust by virtue of their positions as faculty members arguably eligible to be selected\nby Barefield to hold the Miller Chair.\n3. A suit for the enforcement of a charitable trust cannot be maintained by the settlor\nor his heirs or personal representative as such. Thus, the fact that they contributed money to\nthe trust does not confer upon plaintiffs any \xe2\x80\x9cspecial interest\xe2\x80\x9d in the enforcement of the\ntrust that the Attorney General cannot adequately represent. The trial court did not err in\nfailing to rule that plaintiffs had standing on these bases.\n4. The second enumeration contends the Attorney General should be disqualified as\nthe representative of the beneficiaries because he also represents the Board of Regents. In\nour view, this contention is without merit.\nUnder the Disciplinary Standards of the State Bar of Georgia, the term \xe2\x80\x9cclient\xe2\x80\x9d does\nnot include a public agency when represented by a full-time public official, such as the\nAttorney General. Nothing in the Code of Professional Responsibility prohibits a full-time\npublic lawyer, representing this State or its agencies, from taking a position adverse to the\nState, its agencies or officials, when such action is authorized or required by the Constitution\n251\n\n\x0cor statutes of this State. Moreover, the remedy for a conflict of interest is to involve the\ndistrict attorney or appoint a Special Assistant Attorney General. Such conflict certainly\nwould not mandate that persons with no \xe2\x80\x9cspecial interest\xe2\x80\x9d (such as plaintiffs here) be\ngranted standing to enforce a charitable trust.\nJudgment affirmed.\nNote-Beneficiaries With Special Interests\nA beneficiary who has a special interest has standing to sue to enforce the provisions of a\ncharitable trust. That person is required to demonstrate that he is entitled to receive a benefit\nunder the trust that is not available to the general public or to an average beneficiary.\nProblems\nIn which of the following situations might a beneficiary be deemed to have a special interest\nin the trust?\na). Garlock left money in trust to build a dental school at a local university. The university\ntook the money and constructed the dental school. Ten years later, when Joe was in his\nsecond year at the dental school, the university announced that it was closing the dental\nschool and using the money to open up a nursing school. Does Joe have standing to sue the\nuniversity on behalf of the trust?\nb). Thelma left money in trust to build a charitable home for low-income senior citizens. The\nfacility was built and a board of trustee was created to operate it. Twenty-years later, the\nBoard decided to relocate the home to a new neighborhood. Bertha, a resident of the home,\nwas upset about the proposed relocation because it would take her far away from her family,\nher doctor and her church. Does Bertha have standing to sue the Board on behalf of the\ntrust?\nc). Warren left money in trust to construct a new building for his church. The church took\nthe money, but instead of erecting a new building the board decided to use the money to\nrenovate the old building. Claire, a member of the church, suspected that the pastor and the\nboard were misappropriating the trust money. Does Claire have standing to sue the Board\non behalf of the trust?\ne). Gilbert left money in trust to provide scholarships for law students. The dean of the law\n252\n\n\x0cschool decided to use the money for faculty writing grants instead of for scholarships.\nClifford, a scholarship recipient, cannot afford to attend law school without the scholarship.\nDoes Clifford have standing to sue the Board on behalf of the trust?\n\n253\n\n\x0cChapter 9 - Treatment of Trust\nProperty\nThe most important aspect of the trust is the trust property. The primary purpose\nfor creating a trust is to provide for the needs of the beneficiaries. That goal cannot be\naccomplished if the trust property is destroyed or depleted. The trustee is responsible for\ncollecting and protecting the trust property. He or she has the legal title to the property and\nowes a fiduciary duty to the beneficiary of the trust to preserve the property. In addition, the\ntrustee has a duty to prudently invest the trust property in order to ensure that the income is\nsufficient to meet the needs of the beneficiaries.\n\n9.1\n\nThe Duty to Collect and Protect Trust Property\nWhen the testator dies, the testator is legally obligated to obtain possession of the\n\ntrust assets from the executor of the estate as soon as it is feasible. After he receives the\nproperty, the trustee is required to examine the property tendered to make sure it\ncorresponds with the property listed in the trust instrument. In the event there is a problem\nwith the trust property, the trustee has duty to challenge the executor, including filing a law\nsuit to make sure that the trust property is restored. For instance, O leaves $400,000 to A in\ntrust for the benefit of B. After O dies, O\xe2\x80\x99s executor notifies A and B about the existence of\nthe trust, and delivers the money to A. If A receives $300,000 instead of the $400,000\nmentioned in the trust instrument, A has a duty to resolve the discrepancy with O\xe2\x80\x99s\nexecutor. Once the trustee receives the trust property, that person has a duty to protect the\nproperty. The steps the trustee must take to preserve the trust property depend on the\nnature of the property. If the property in the trust is a house, the trustee has duty to do\nthings like keeping the house in good repair and paying the necessary taxes. For trusts that\nare funded by money, the trustee has the duty to invest the principle in order to make\nenough money, so that the beneficiary receives the necessary income.\n\n9.2 The Duty to Earmark Trust Property and to Not Comingle Trust\nFunds\nOnce the trustee obtains the trust property, he has a duty to earmark the property as\nbelonging to the trust. For example, if A receives a house to hold in trust for B, A must put\n254\n\n\x0cthe trust\xe2\x80\x99s name on the deed instead of his own name. The purpose of this requirement is to\nprevent the trust property from being attached by the trustee\xe2\x80\x99s creditors. Thus, the trustee\nmust make it clear that he owns the house as trustee and not as an individual. The trustee is\nnot obligated to earmark certain types of securities. If the trustee fails to earmark the trust\nproperty, he is only liable for any losses that result from his failure to earmark. Consider the\nfollowing example: O gives A an apartment building to hold in trust to pay the income from\nthe rents to B for life. A records the deed to the apartment building in his name. A few\nyears later, the main employer in the area goes out of business, so people leave the area to\nfind new jobs. As a result, the vacancy rate in the apartment building rises to 90% and the\ntrust loses substantial revenue. The trustee is not liable for the loss because it was a result of\nthe general economic conditions in the area. On the other hand, if one of A\xe2\x80\x99s creditor is able\nto attach a lien to the property, A would be responsible for any loss that occurs.\nThe duty to not comingle is similar to the duty to earmark. The trustee must keep\nthe trust property separate from his own property. Consequently, if O leaves $400,000 in\ntrust to A for the benefit of B, A cannot legally place that money in A\xe2\x80\x99s bank account.\nInstead, A is obligated to place the money in a separate trust account. Nonetheless, A is only\nliable for the loss the trust suffers as a result of the comingling. Thus, if A places the money\nin his bank account and his creditors are able to get it, A is liable to the trust for the amount\nof the loss. Nonetheless, if the trust loses money because the bank goes out of business or\nsome one steals the fund, the trustee is not responsible for the loss. Litigation over breaches\nof the duty not to comingle usually involves individual trustees. Some jurisdictions permit\ncorporate trustees to comingle trust funds by statute or common law. The rationale behind\nthis position is to encourage corporate entities to manage small trusts by being able to pool\ntrust resources.\nEarmarking vs. Comingling\nThe students often confuse violations of the duties to earmark and to not comingle.\nThe simple way to look at is to focus upon the trustee\xe2\x80\x99s actions. When the trustee fails to\nearmark, he treats the trust property like it is his property. Since it is registered or titled in his\nname, legally the property does belong to the trustee. However, a trustee who comingles\ntrust funds acknowledges that the property belongs to the trust. The difficulty lies in\ndetermining which property belongs to the trustee and which property belongs to the trust.\n255\n\n\x0cProblems\nIn the following cases determine whether the trustee has violated the duty to earmark or the\nduty not to comingle.\n1. Albert leaves a large number of expensive jewels in trust for the benefit of his children.\nThe trustee lists the jewels on his homeowner\xe2\x80\x99s insurance policy and stores them in his safe\ndeposit box.\n2. Bernard leaves twenty Arabian horses in trust for the benefit of his children. The trustee\nplaces the horses in the stable with his collection of Arabian horses.\n3. Collin leaves an art collection in trust for the benefit of his children. The trustee registers\nthe art collection in his name.\n4. David leaves a million dollars in trust for the benefit of his children. The trustee deposits\nthe million dollars in his bank account.\n5. Ellen leaves a collection of antique cars in trust for the benefit of her children. The trustee\nrecords the titles to the cars in his name.\n\nIn re Dommerich\xe2\x80\x99s Will, 74 N.Y.S.2d 569\nHECHT, Justice.\nThis is a motion by trustees made pursuant to Article 79 of the Civil Practice Act for\na judicial settlement of their account. The only question presented is one raised by the\nguardian ad litem appointed by the court to protect the interests of the infant beneficiaries.\nHe objects to the trustees\' investment in and holding as part of the trust fund, certain\nmunicipal and United States Treasury bonds in bearer form when registered bonds of the\nsame issue are available.\nIt has been stated by leading authorities on trust law that bonds payable to bearer are\na proper investment, and need not be registered. In Scott on Trusts, Vol. 2, Par. 179.3, the\nrule is stated as follows:\n\xe2\x80\x98A trustee does not commit a breach of trust by investing trust funds in\nbonds payable to bearer, instead of registering the bonds in his name as\ntrustee. It is arguable, of course, that a trustee should not invest in bonds\npayable to bearer and that he should have the bonds registered in his name as\n256\n\n\x0ctrustee for the particular estate for which he holds them, since otherwise they\nare not earmarked as property of the trust. It would seem, however, that long\nestablished practice permits trustees to invest in bonds payable to bearer.\xe2\x80\x99\nThe rule is similarly stated in the Restatement of the Law on Trusts at par. 179, p.\n458:\n\xe2\x80\x98d. Duty to earmark trust property. Ordinarily it is the duty of the trustee to\nearmark trust property as trust property. Thus, title to land acquired by the\ntrustee as such should be taken and recorded in the name of the trustee as\ntrustee. Certificates of stock should be issued in the name of the trustee as\ntrustee. If bonds held in trust are registered, they should be registered in the\nname of the trustee as trustee. If a bond is otherwise a proper trust\ninvestment, however, the mere fact that it is payable to bearer does not\nrender it an improper trust investment, unless the terms of the trust prohibit\nholding securities payable to bearer.\xe2\x80\x99\nIn considering the obligation of a fiduciary to register bonds pursuant to the\nprovisions of Section 231, Surrogate\'s Court Act (applicable to testamentary trusts), Mr.\nSurrogate Foley in Matter of Erlanger\xe2\x80\x99s Estate, 183 Misc. 607, 49 N.Y.S.2d 819, 820-821 said:\n\xe2\x80\x98Since the enactment in 1916 of the predecessor section of the Code of Civil\nProcedure to Section 231, Surrogate\'s Court Act, and for a period of twentyeight years the practical construction accorded to the terms of the section has\nbeen that a fiduciary was permitted to invest in and retain bearer bonds.\n\xe2\x80\x98By a coincidence, the author of this decision drafted and introduced as a\nmember of the State Senate the legislative measure which became the\npredecessor section of the Code of Civil Procedure referred to above\n(Section 2664\xe2\x80\x93a.)\n\xe2\x80\x98The pertinent part of Section 231 reads: \xe2\x80\x98Every executor, administrator,\nguardian or testamentary trustee shall keep the funds and property received\nfrom the estate of any deceased person separate and distinct from his own\npersonal fund and property. He shall not invest the same or deposit the same\nwith any person, association or corporation doing business under the\n257\n\n\x0cbanking law or other person or institution, in his own name, but all\ntransactions had and done by him shall be in his name as such executor,\nadministrator, guardian or testamentary trustee. Any person violating any of\nthe provisions of this section shall be guilty of a misdemeanor.\xe2\x80\x99\n\xe2\x80\x98Under these terms a fiduciary is not compelled to register bonds in the name\nof the fiduciary of the estate as such. He may retain bearer bonds taken over\nat the death of the testator and any fiduciary may invest in new bearer bonds.\n\xe2\x80\x98The section prohibits him from mingling the bearer bonds with his own\nproperty. They must be kept in a safe deposit box or other form of\nearmarked custody in the name of the fiduciary of the specific estate as such.\nThe fiduciary must purchase such bonds in his name as fiduciary. They\ncannot be bought in his individual name. Sales likewise are required to be\nmade in the name of the fiduciary as such.\n\xe2\x80\x98The construction referred to above, which has been uniformly followed by\nthe Surrogates\' Courts, by trustees and their attorneys and by special\nguardians, was confirmed by the Legislature in the explanatory note to the\namendment of Section 231 made by Chapter 343 of the Laws of 1939. That\namendment was recommended by the Executive Committee of the\nSurrogates\' Association of the State of New York. The explanatory note\nprinted in the legislative bill read: \xe2\x80\x98The changes proposed by this amendment\nrelate only to registered securities. It is not intended to compel the fiduciary\nor the depository to register bearer bonds or to prohibit their retention\nwithout registration so long as such bearer bonds are identified, earmarked\nand segregated as assets of the estate.\xe2\x80\x99\'\nThe amendment of Section 231 referred to in the above opinion authorized nominee\nregistration by trustees. Nominee registration was likewise authorized in the case of intervivos trusts by Section 25 of the Personal Property Law, added by L. 1944, C. 215, effective\nMarch 21, 1944.\nWhile there are conflicting decisions at Special Term, New York County, on this\nsubject, it appears to me that the weight of authority permits retention of bearer bonds by\n258\n\n\x0ctrustees. In Cooper v. Illinois Central R.R., First Department 1899, 38 App. Div. 22, 57 N.Y.S.\n925, the court affirmed a judgment on the opinion of the referee who held (page 27 of 38\nApp. Div. page 927 of 57 N.Y.S.):\n\xe2\x80\x98There is no rule that I am aware of that requires a trustee, if trust funds are\ninvested in such securities, (bearer bonds) to have the securities registered.\nThe new trustees had the right to have the registration in the name of the\ndeceased executor canceled. They were not bound to have the bonds reregistered in their own names, but might restore them to their original\nnegotiability by having them transferred to bearer.\xe2\x80\x99\nMatter of Halstead, Surr. Ct. Dutchess County, 44 Misc. 176, 89 N.Y.S. 806, affirmed on\nthe opinion of the Surrogate in 110 App. Div. 909, 95 N.Y.S. 1131, affirmed Court of\nAppeals in 184 N.Y. 563, 76 N.E. 1096, presents a direct holding on the question. In that\ncase the beneficiaries sought to hold a surviving trustee liable for failing to require that\nsecurities belonging to the trust consisting of unregistered railroad and municipal bonds, be\npayable to or registered in the names of the trustees jointly and for failure to examine the\nsafe deposit box where the securities were kept. The court (page 181 of 44 Misc., page 809\nof 89 N.Y.S.) held that it was not negligent of the surviving trustee to permit the bonds to\nremain negotiable, nor to purchase others in such form, and stated:\n\xe2\x80\x98It has been urged that the surviving trustee was negligent in permitting the\nsecurities to remain of the same negotiable character as they were at the death of\nthe testator, and in purchasing other securities without requiring that they be\nmade payable to or registered in the names of the trustees jointly. The\nbeneficiaries have failed to show and circumstance which tended to arouse the\nsuspicion of the surviving trustee or themselves, or that there was the slightest\nreason to believe that the safety of the fund was endangered. No American\nauthority has been cited to sustain this contention, and, in view of the situation\noutlined in this case, it was not, in my judgment, negligent for Halstead to permit\nthe continuance of the methods which the testator had established and assented\nto. Wilkinson resided in Poughkeepsie, while Halstead lived in Brooklyn, and,\nowing to the circumstances referred to and the situation of the trustees, it would\nhave been expensive and unusually cumbersome if the fund was so controlled\n259\n\n\x0cthat every detail of the administration required the joint action of the trustees.\xe2\x80\x99\nThe guardian ad litem argues that the decision of the Court of Appeals in Matter of\nUnion Trust Company (Hoffman Estate) 219 N.Y. 514, 114 N.E. 1057 is authority for his\ncontention. That case involved mortgage participations, a type of security which, by its very\nnature, must be registered in someone\'s name. The court stated (page 521 of 219 N.Y., page\n1059 of 114 N.E.):\n\xe2\x80\x98It is suggested that corporate or municipal bonds in which a trustee is authorized\nto invest trust funds may be payable to bearer, and consequently lack any stamp\nof ownership by the trust. While this is so of securities payable to bearer, the lack\nof any stamp of ownership on such securities arises from the peculiarity of the\ninvestment, and it does not affect the rule in regard to investments that can\nproperly be made distinctive and bear upon their face evidence of their\nownership.\xe2\x80\x99\nHowever, the question of the right of the trustees to hold bearer bonds was not\nbefore the court. It seems to me, in the light of the court\'s affirmance in the Halstead case,\nsupra, that it was referring to all bearer bonds, whether capable of registration or not, as a\npeculiar and distinct type of investment which need not be registered, as contrasted with\nother types of securities which, by their very nature, have to be put in someone\'s name, and\nconsequently must be registered in the name of the trustee as such. Accordingly the\nobjection of the guardian is overruled. Settle order at which time allowances will be fixed.\n\n9.3\n\nThe Duty Not to Delegate\nA settlor expects the trustee to administer the trust. The settlor selected the\n\ntrustee because the settlor had confidence in that person\xe2\x80\x99s judgment and ability to carry out\nthe settlor\xe2\x80\x99s instructions. The settlor did not want someone else to manage the trust\nproperty. Thus, traditionally, the trustee was obligated not to delegate his discretionary duties\nto a third party. However, it would be too burdensome to force a trustee to personally\nperform all acts necessary to administer a trust. Therefore, the trustee may delegate\nministerial duties but not delegate discretionary acts. For instance, the trustee of a\ndiscretionary support trust cannot let a third party make the decision about if and when to\ndistribute money to the beneficiary. The main duty of a trustee is usually to invest the trust\n260\n\n\x0cproperty to ensure that there is enough income to pay to the beneficiary. The law recognizes\nthat the trustee may not have enough expertise to make investment decisions. Therefore, a\ntrustee who delegates his investment duties to a stockbroker does not breach his duty not to\ndelegate. In fact, the duty of prudence requires the trustee to delegate such tasks. However,\nthe trustee is obligated to monitor the activities of the stockbroker. He cannot simply turn\nover the management of the trust funds to that person. He has a duty to exercise reasonable\ncare in selecting and monitoring the person to whom he delegates his trust duties.\n\n9.4\n\nDuty of Prudence\nAt common law, when dealing with trust funds, the trustee had a duty to exercise\n\nsuch care and skill as a prudent man would exercise when dealing with his own property.\nThis was similar to the \xe2\x80\x9creasonable man\xe2\x80\x9d standard applicable in tort cases. Thus, the\ntrustee\xe2\x80\x99s actions were evaluated based upon the totality of the facts. Currently, the trustee\nhas a duty to invest trust property in a manner consistent to that of a reasonable prudent\ninvestor. The duty of prudence includes the duty to be sensitive to risks and return of\ninvestments, to diversify and to delegate when appropriate. A portfolio may be undiversified\nwhen special circumstances warrant it. The trustee has a duty to diversify unless he decides\nthat because of special circumstances the purposes of the trust would be better served\nwithout diversifying. The cases in which courts find special circumstances justifying the\nfailure to diversity are few in number. The special circumstances usually occur when the trust\nconsists of family property. The trustee must monitor the actions of the person to which the\ntrustee delegates investment responsibility. The prudent investor standard is based upon the\nUniform Prudent Investor Act and the Restatement (Second) of Trusts. The standard has\nbeen codified in the majority of American jurisdictions.\n\nEstate of Cooper, 913 P2d 393\nSWEENEY, Chief Judge.\nWashington\'s prudent investor rule requires a trustee to \xe2\x80\x9cexercise the judgment and\ncare under the circumstances then prevailing, which persons of prudence, discretion and\nintelligence exercise in the management of their own affairs....\xe2\x80\x9d RCW 11.100.020(1). This\nexercise of judgment requires, among other things, \xe2\x80\x9cconsideration to the role that the\n261\n\n\x0cproposed investment or investment course of action plays within the overall portfolio of\nassets.\xe2\x80\x9d RCW 11.100.020(1). In this case of first impression, we are asked to decide whether\nthe prudent investor rule limits the court\'s consideration to the overall performance of the\ntrust, or whether, instead, the court may consider the performance of specific assets in the\ntrust. We hold the prudent investor rule focuses on the performance of the trustee, not the\nresults of the trust. The trial court here then appropriately considered individual assets, and\ngroups of assets, in finding that the trustee had improperly weighed trust assets in favor of\nhimself, the income beneficiary. We affirm that portion of the court\'s judgment which\nrequired the trustee to reimburse the trust corpus for the loss caused by that investment\nstrategy.\nFACTS\nThe Estate\nDe Anne Cooper died on March 6, 1978. In her will, she provided that her one-half\nof the community property would be held in trust during her husband Fermore B. Cooper\'s\nlifetime, and that Mr. Cooper and The Old National Bank of Washington (ONB) would\nserve as co-trustees of the testamentary trust. The trust required payment of income to Mr.\nCooper and distribution of the corpus to her children after Mr. Cooper\'s death. The\nnonintervention will named Mr. Cooper personal representative. At the time of her death,\nMrs. Cooper had two children, Joyce Johnston and Richard Cooper. Her one-half of the\ncommunity property was worth about $800,000.\nMr. Cooper filed his wife\'s will and started a probate. But he took no further steps to\nconclude the probate until Joyce filed this action. He did not keep a separate estate account\nand continued to manage all of the former community property as his own.\nIn 1986, Mr. Cooper asked Joyce to approve the substitution of Richard for ONB as\nco-trustee of the trust. Joyce refused and asked about Mr. Cooper\'s management of the\nestate. At that point, Mr. Cooper funded the trust by depositing in ONB assets valued at\napproximately $2,000,000. Joyce then petitioned the court to remove Mr. Cooper as personal\nrepresentative of the estate and trustee of the trust, and for an accounting and a declaration\nthat Mr. Cooper\'s second wife had no interest in the trust property. Her petition included a\nrequest for attorney fees and costs.\n262\n\n\x0cThe Inventory\nIn March 1989, Mr. Cooper filed an inventory of estate assets. The asset mix set out\nin that inventory generates the primary dispute in this case. The inventory included (1) an\nunsecured note from Gifford-Hill, Inc., with a balance of $1,200,000 owing on the date of\nMrs. Cooper\'s death; (2) partnership interests in Eight-O-One Investment Company and\nHillside Investment Company, which owned interests in the Deaconess Medical Building;\nand (3) substantial holdings in income-producing assets including tax-exempt bonds. The\ninventory did not include shares in Comtrex, Inc. Mr. Cooper\'s son, Richard, was the chief\nexecutive officer of Comtrex. After Mrs. Cooper\'s death, Mr. Cooper bought shares in the\ncompany and also loaned it approximately $824,000, which Comtrex never repaid.\nBefore Mr. Cooper compiled the inventory, he had sold the community\'s share of\nstock in a closely held corporation, Western Frontiers. The corporation owned the North\nShore, a hotel and restaurant in Coeur d\'Alene. Its shares were valued for estate tax purposes\nin 1978 at 75\xc2\xa2 a share, for a total value of $21,750. Mr. Cooper sold both his and the estate\'s\nshares in 1983 to Duane Hagadone at a profit of about $1 million. The stock had appreciated\nlargely because of a bidding war between Mr. Hagadone and Robert Templin. Both wanted\ncontrol of the company. The purchase gave Mr. Hagadone a majority interest. Mr. Cooper\nreinvested the proceeds in stocks and bonds.\nAn accounting filed along with the inventory calculated the current value of Mrs.\nCooper\'s estate at $1,279,433. Mr. Cooper\'s accountant compiled the accounting from estate\ntax returns and transaction sheets supplied by Mr. Cooper\'s stockbroker. The accounting\nsummarized (1) purchases and sales of assets listed in the 1978 estate tax return, (2) capital\ngains, and (3) income.\nOn December 26, 1989, the superior court appointed John Cummins \xe2\x80\x9cas special\nmaster/referee to assist [it] in resolving various disputes that [had] arisen in connection with\n[the Cooper] estate.\xe2\x80\x9d At the time, Mr. Cummins was a vice-president of Seattle-First\nNational Bank and manager of its trust department. The court asked Mr. Cummins to\ncontact the trust department of U.S. Bank (ONB\'s successor) to \xe2\x80\x9creview what has transpired\nin connection with the assets\xe2\x80\x9d deposited by Mr. Cooper in 1987 to fund the trust. The court\nalso asked Mr. Cooper to forward to Mr. Cummins a copy of the estate accounting. After\nconsulting with Mr. Cummins, the court found that \xe2\x80\x9cthe accounting as accomplished to date\n263\n\n\x0cin connection with the trust estate is not in accordance with generally recognized format and\nprinciples.\xe2\x80\x9d It then instructed Mr. Cooper\'s accountant, James McDirmid, \xe2\x80\x9cto confer with\nMr. Cummins as to what is contemplated to comply with those standards.\xe2\x80\x9d\nMr. Cooper filed a revised inventory accounting in May 1990 based on Mr.\nMcDirmid\'s calculations (McDirmid accounting). It set the 1987 fair market value of the\ninventoried assets at $1,835,821.50. The value of the assets Mr. Cooper had transferred to\nfund the trust in 1987 had a value of $1,959,113. Thus, the trust was overfunded by\n$123,291.50. The accounting also valued the partnership interests in Eight-O-One and\nHillside, half of which the estate owned, at $192,000 and $86,000, respectively. These values\nreflected a 60 percent discount because Mr. Cooper\'s interest was a minority interest and\ntherefore not easily marketable.\nMr. Cummins concluded the amended accounting revealed \xe2\x80\x9cno improprieties.\xe2\x80\x9d The\ncourt refused Joyce\'s request to discover the basis for Mr. Cummins\' opinions. It stated Mr.\nCummins was appointed \xe2\x80\x9csolely for the purpose of deciding whether or not F. Bert Cooper\nshould be removed as Personal Representative.\xe2\x80\x9d\nThe Litigation\nOn December 12, 1990, the court directed the parties to proceed to a hearing on the\nfinal report and petition for distribution. At the hearing, the principal issues were the\naccuracy of the McDirmid accounting and the propriety of Mr. Cooper\'s investment strategy.\nMr. Cooper and Joyce presented expert opinion testimony in support of their respective\npositions.\nThe Ruling\nOn December 15, 1992, following the hearing, the court found Mr. Cooper had\ncommingled income from estate assets and proceeds from the sale of estate assets with his\nown funds. It found the accounting prepared by Mr. Cooper\'s accountant adequately traced\nthe estate\'s assets. The court further found, based on the McDirmid accounting, that Mr.\nCooper \xe2\x80\x9chad more than sufficient funds in his own right as his separate property to make\ngifts and other distributions to and for the benefit of his children.\xe2\x80\x9d\nThe court agreed with Mr. Cooper\'s valuation of the Eight-O-One and Hillside\npartnerships. And it held he had acted prudently in negotiating the sale of the Western\n264\n\n\x0cFrontiers shares. It found that Mr. Cooper had, however, \xe2\x80\x9cmaintained a policy of investment\n... which maximized the income of the estate ... to the detriment of the growth of the corpus\nof the estate.\xe2\x80\x9d It valued the loss to the remainder interest at $342,493 as of July 1987. It\nordered Mr. Cooper to contribute that additional amount, along with $115,840 of expected\nappreciation from July 1987 to entry of the judgment.\nThe court also found that Mr. Cooper had overfunded the trust by $123,292. It\ncredited that sum against the $458,333 surcharge it had levied against Mr. Cooper to\ncompensate the trust for losses it suffered as a result of his investment strategy ($342,493 +\n$115,840). It held estate taxes, attorney and accounting fees, and expenses of administration\nwere properly charged by Mr. Cooper to the estate. The court set 1984 as the outside date by\nwhich Mr. Cooper should have closed the estate. It then awarded him a fee for serving as\npersonal representative from 1978 through 1984. It also awarded him a fee as co-trustee\nfrom July 1987 to the date of the judgment. It ordered the trust divided between Richard and\nJoyce and discharged Mr. Cooper as the trustee over Joyce\'s half because of the \xe2\x80\x9cmutual\ndistrust, conflict, and dissension\xe2\x80\x9d between Joyce and Mr. Cooper.\nThe court further found that \xe2\x80\x9c[a]ll parties to this cause have succeeded to some\ndegree herein and have worked for the benefit of the estate and of their respective clients.\xe2\x80\x9d\nIt therefore awarded all parties a portion of their attorney and accountant fees. Joyce\nreceived $45,600 in attorney fees and $12,421.67 for her accountant\'s fees. The court\nawarded Mr. Cooper $46,400 of the $115,000 in attorney fees he had requested, and\n$48,802.50 for his accountant\'s fees. It awarded Richard $18,400 in attorney fees and $220.47\nin costs. The court approved Joyce\'s additional attorney and professional fees of $156,975,\nbut ordered them charged to her share of the trust.\nDISCUSSION\nThe Appeal\nPrudent Investor. The question presented is whether the trial court improperly\napplied the prudent investor rule. Mr. Cooper and Richard argue the court should have\nevaluated Mr. Cooper\'s performance based on the performance of the trust as a whole rather\nthan focusing on specific assets, or groups of assets. They point out that the return on total\ntrust assets exceeded that of the ONB trust department.\n265\n\n\x0cThe trust\'s favorable performance, as compared to that of the ONB trust\ndepartment, was largely due to the gains from Mr. Cooper\'s sale of the estate\'s Western\nFrontiers stock. The balance of the trust assets were weighted heavily toward current income\nrather than capital appreciation. Common stocks represented 13 percent of the trust\'s\nmarketable securities; bonds and bond equivalents represented 87 percent. The estate\'s gain\nattributable to increases in the value of the securities was only $226,313. This figure\nrepresented a 22.23 percent return on those investments, or a 2.15 percent increase per year\nbetween 1978 and 1987. Inflation averaged 6 percent a year during that same period. The\npurchasing power of these assets decreased then just under 4 percent a year.\nOverall trust performance is a factor in evaluating the performance of the trustee.\nBut it is not by itself controlling. \xe2\x80\x9cThe court\'s focus in applying the Prudent Investor\nstandard is conduct, not the end result.\xe2\x80\x9d J. Alan Nelson, The Prudent Person Rule: A Shield for\nthe Professional Trusts, 45 Baylor L. Rev. 933, 939 (1993). The American version of the prudent\ninvestor rule began with the Harvard College case:\nAll that can be required of a trustee to invest, is, that he shall conduct himself\nfaithfully and exercise a sound discretion. He is to observe how men of prudence, discretion,\nand intelligence manage their own affairs, not in regard to speculation, but in regard to the\npermanent disposition of their funds, considering the probable income, as well as the\nprobable safety of the capital to be invested.\nNelson, 45 Baylor L. Rev. at 939 (quoting Harvard College v. Amory, 26 Mass. (9 Pick),\n446, 460-61 (1830)). In Harvard College, the court recognized that trust assets could never be\nfully protected from the uncertainties of the market place; thus, the prudent investor\nstandard was necessarily flexible. Nelson, 45 Baylor L. Rev. at 938.\nIn the recent New York case of In re Lincoln First Bank, N.A., 165 Misc.2d 743, 630\nN.Y.S.2d 472 (Sur.Ct. 1995), the court interpreted its own version of the prudent investor\nrule and made two observations which are helpful here. First, \xe2\x80\x9cwhether an investment is\nprudent or not is a question of fact.\xe2\x80\x9d Lincoln First Bank, N.A., 165 630 N.Y.S.2d at 474\n(citing In re Clarke\xe2\x80\x99s Estate, 12 N.Y.2d 183, 188 N.E.2d 128, 237 N.Y.S.2d 694 (1962); In re\nYarm, 119 A.D.2d 754, 501 N.Y.S.2d 173 (1986)). Second, the prudent investor standard\nrequires \xe2\x80\x9cthat the fiduciary maintain a balance between the rights of income beneficiaries\nwith those of the remainderman.\xe2\x80\x9d Lincoln First Bank, 630 N.Y.S.2d at 474. This state\'s\n266\n\n\x0cversion of the rule also requires that the trustee consider income as well as the safety of the\ncapital and the requirements of the beneficiaries. RCW 11.100.020(2). Clearly, the focus is on\nthe trustee\'s performance, not simply on the net gain or loss to the trust corpus. Nelson, 45\nBaylor L. Rev. at 939.\nThe trial court here properly applied the prudent investor standard, as set forth\nabove, and its findings of fact on that issue are supported by substantial evidence. Cowiche\nCanyon Conservancy v. Bosley, 118 Wash.2d 801, 819, 828 P.2d 549 (1992).\nBoth parties rely on Baker Boyer Nat\xe2\x80\x99l Bank v. Garver, 43 Wash. App. 673, 719 P.2d\n583, review denied, 106 Wash.2d 1017 (1986). There, the trust beneficiaries sued for damages\nresulting from imprudent investments made by Baker Boyer, the trustee bank. They argued\nthe bank had breached a duty to diversify when it invested primarily in fixed-income\nsecurities. The bank responded it had no duty to diversify under the prudent investor rule, as\ncodified in former RCW 30.24.020 (now RCW 11.100.020.). Even if such a duty existed, the\nbank contended diversification between fixed-income securities and equity investment in real\nproperty satisfied the duty under a \xe2\x80\x9ctotal asset\xe2\x80\x9d management approach.\nThe court agreed with the beneficiaries that the prudent investor standard includes\nthe duty to diversify trust assets. But it found it unnecessary to decide whether former RCW\n30.24.020 incorporated the \xe2\x80\x9ctotal asset\xe2\x80\x9d approach. The evidence supported the trial court\'s\nfinding \xe2\x80\x9cthe Bank had not weighed the investment in securities against the investment in the\nfarmland for purposes of diversification.\xe2\x80\x9d Baker Boyer, 43 Wash. App. 673, 719 P.2d 583\n(emphasis added).\nLikewise, Mr. Cooper did not weigh his investment in income-producing securities\nagainst his investment in Western Frontiers. The overall trust performance was boosted\ndramatically by the sale of the Western Frontiers stock in 1983. But Mr. Cooper\'s investment\nstrategy could not have anticipated the gain from the sale of the stock before it occurred. By\n1983, when the stock was sold, he had been administering the estate for five years.\nFurthermore, after the sale, he invested the estate assets almost exclusively in marketable\nsecurities, 87 percent in bonds, favoring again the income beneficiary-him. There was no\nother asset or group of assets which Mr. Cooper could have balanced against this\ninvestment.\n\n267\n\n\x0cSUMMARY\nIn Mr. Cooper\'s appeal, we affirm the trial court\'s finding that his management of\nthe estate\'s marketable securities breached his duty to act as a prudent investor.\n\nIn re Matter of the Stuart Cochran Irrevocable Trust, 901 N.E.2d 1128\nBAKER, Chief Judge.\nAppellants-petitioners Chanell and Micaela Cochran (the Beneficiaries) appeal the\ntrial court\'s order entering final judgment in favor of appellee-respondent KeyBank, N.A.\n(KeyBank), on the Beneficiaries\' petition seeking an accounting and alleging that KeyBank\nhad breached its obligations as Trustee. The Beneficiaries argue that the trial court\nerroneously concluded that KeyBank did not violate the prudent investor rule and or breach\nits duties as trustee. Finding no error, we affirm.\nFACTS\nOn December 28, 1987, Stuart Cochran created an irrevocable trust (the Trust) and\nnamed his two daughters, Chanell and Micaela, as the Beneficiaries. At that time, the\nBeneficiaries were two and four years old, respectively. In 1989, Stuart\'s wife, now Mary Kay\nVance, filed for divorce and was awarded full custody of the children.\nStuart funded the Trust with life insurance policies and was assisted by an insurance\nadvisor, Art Roberson. Elkhart National Bank was the initial trustee; subsequently, Pinnacle\nBank (Pinnacle) was named as a successor trustee. Pinnacle served as the trustee until 1999.\nIn January 1999, Pinnacle called Vance and informed her that it no longer wished to serve as\ntrustee because of Stuart\'s insistence on having third parties\xe2\x80\x94specifically, himself, his sister,\nand Roberson\xe2\x80\x94involved in the trustee\'s decisionmaking process. Pursuant to the terms of\nthe Trust, Vance was required to appoint a successor trustee. Vance retained an attorney,\nand in January 1999, they met with a KeyBank representative to discuss moving the Trust to\nKeyBank. On February 3, 1999, Vance appointed KeyBank as successor trustee.\nThe 1999 Exchange and the VUL Policies\nAt approximately the same time she received notice that Pinnacle intended to resign\nas trustee, Vance received a call from Roberson, who provided new recommendations\nregarding the insurance policies held by the Trust. Specifically, Roberson recommended that\n268\n\n\x0cthe three life insurance policies and one annuity then held by the Trust be replaced with two\nnew life insurance policies\xe2\x80\x94a ManuLife Variable Universal Life policy and an American\nGeneral Variable Universal Life policy (collectively, the VUL policies).\nAt the time KeyBank assumed the duties of successor trustee, the Trust\'s assets\nconsisted of three life insurance policies and one annuity and with a collective net death\nbenefit of $4,753,539.00. As noted above, however, Roberson had recommended an\nexchange of policies, replacing these policies with the two VUL policies. When KeyBank\nassumed its duties, the underwriting for the exchange of policies had been approved and\nStuart had already submitted to the physical exams. In February and March 1999, KeyBank\napproved the transaction and the exchange of policies took place (the 1999 Exchange), with\na new total death benefit of $8 million.\nFollowing September 11, 2001, the stock markets took a dramatic decline. The\ndownward trend in the markets had an adverse effect on the value of the mutual fund\ninvestments contained in the VUL policies. In fact, in 2001, the policies lost money, meaning\nthat the cost of insurance and the carriers\' administrative charges were greater than the\nincome generated by the investments; in 2002, the losses were even greater.\nThe Oswald Review\nIn the spring of 2003, KeyBank retained Oswald & Company (Oswald), an\nindependent outside insurance consultant, to audit the VUL policies. At that time, Stuart was\nfifty-two years old and the VUL policies had a combined death benefit of $8,007,709.\nTherefore, in the trial court\'s words, \xe2\x80\x9c[t]he Oswald review indicated that it was likely\nthat the two existing policies would lapse before [Stuart] reached his life expectancy of 88\nyears.\xe2\x80\x9d Appellants\' App. p. 16. Moreover, because Stuart\'s \xe2\x80\x9cfinancial fortune had also taken a\nnegative turn by this point in time, he had no financial wherewithal to supplement the trust\nwith additional resources or through the purchase of additional policies of life insurance.\xe2\x80\x9d Id.\nat 17.\nAs Oswald conducted its review of the VUL policies, Roberson completed his own\nreview of alternative policies. Roberson eventually proposed to KeyBank that a John\nHancock policy be purchased to replace the two VUL policies. The John Hancock policy\noffered a lump sum death benefit of $2,787,624 that was guaranteed to age 100.\n269\n\n\x0cKeyBank requested Oswald to review the John Hancock policy. Representatives of\nthose companies exchanged some emails, in which an Oswald employee noted that the John\nHancock policy \xe2\x80\x9cdrastically reduces\xe2\x80\x9d the expected death benefit, asking, \xe2\x80\x9c[i]s this ... what\n[your] client wants to do?\xe2\x80\x9d Id. at 318. The KeyBank representative replied in the affirmative,\nstating that \xe2\x80\x9c[i]t is [Stuart\'s] intention to reduce his life insurance coverage to the amount\nseen on the John Hancock illustrations.\xe2\x80\x9d Id. at 317. Oswald reviewed the John Hancock\npolicy and compared it to the two VUL policies. Id. at 334\xe2\x80\x9335. In an email, an Oswald\nemployee summarized its conclusion:\nWe\'re sure the guarantees in this John Hancock product have a lot of appeal to\n[Stuart] given the fact of his substantial investment losses in his current [VUL]\npolicies.\nGiven the facts that he is moving to a fixed product with the death benefit\nguaranteed to age 100 and $0 future outlay, our recommendation would be to\nmove forward with the proposed John Hancock coverage if the client is\ncomfortable with the reduction in death benefit.\nId. at 317.\nAfter reviewing Oswald\'s analyses of the respective policies and considering the\nrecommendations contained in the reports, in June 2003, KeyBank decided to retire the\nVUL policies and purchase the John Hancock policy in their stead (the 2003 Exchange).\nAfter Stuart underwent a medical exam, John Hancock underwriters rated him as a preferred\nrisk rather than a super preferred. That classification resulted in the guaranteed benefit being\n$2,536,000 rather than $2,787,624. The Oswald employee who had performed the analysis\ntestified that this change would not have altered Oswald\'s ultimate recommendation. In\nJanuary 2004, Stuart died unexpectedly at the age of 53. The Trust received $2,536,000 in life\ninsurance proceeds for the Beneficiaries\' benefit.\nOn April 2, 2004, the Beneficiaries filed a petition to docket the Trust and to require\nKeyBank to account. On March 7, 2005, KeyBank filed a petition to reform the trust and for\napproval of its accounting. The Beneficiaries filed a counterclaim and claim for surcharge,\narguing, among other things, that KeyBank had breached its fiduciary duties as Trustee. A\nbench trial was held on August 28\xe2\x80\x9330, 2007, on the issues raised in the Beneficiaries\'\n270\n\n\x0ccounterclaim and claim for surcharge, with all other issues being reserved for a later time.\nOn May 29, 2008, the trial court entered findings of fact and conclusions of law, ruling in\nKeyBank\'s favor. Among other things, the trial court concluded as follows:\nCONCLUSIONS OF LAW AND ANALYSIS\n***\n(20) The ultimate question facing this Court is whether the actions of the Trustee,\nKeyBank, were consistent with the Settlor\'s intent as expressed in the Trust document and\nmet its fiduciary duties to the Beneficiaries. In essence, based on the circumstances facing\nthe Trust in 2003, was it prudent for the Trustee to move the trust assets from insurance\npolicies with significant risk and likelihood of ultimate lapse into an insurance policy with a\nsmaller but guaranteed death benefit? This Court concludes that this conduct was\nconsistent with the standard established by the prudent investor rule.\n(21) KeyBank and its representative acted in good faith to protect the corpus of the Trust\nbased on the downturn in the stock markets and the prospect that the existing policies\nwould lapse before the expected life expectancy of the Settlor.\n(22) In hindsight, due to the unexpected demise of the Settlor at age 53, KeyBank\'s\ndecision resulted in a significant reduction in the death benefit paid to the beneficiaries.\nHowever, from the perspective of the Trustee at the time of its decision, it was prudent to\nprotect the Trust from the vagaries of the stock market and from predicted lapse of the\nexisting policies. It might also have been prudent to take a \xe2\x80\x9cwait and see\xe2\x80\x9d approach,\nhowever, the prudent investor standard gives broad latitude to the Trustee in making these\ntypes of decisions.\n(23) Had the insurance policies lapsed, the Beneficiaries would have received no\ndistribution from the Trust. Certainly, that outcome was not within the intent of the\nSettlor at the time he established this Trust.\n(24) Frankly, financial trends outside of the control of the Trustee or the Beneficiaries\nwere the direct and proximate cause of the problem facing the Trust in 2003. While it\nwould have been preferable for the Trustee to provide regular accountings to the\nBeneficiaries, the receipt of timely financial reports by the Beneficiaries would not have\nchanged the negative financial condition of the Trust.\n271\n\n\x0c(25) The Beneficiaries want this Court to focus on the defects in KeyBank\'s\ndecisionmaking process, and while the Court recognizes that this process was certainly less\nthan perfect with respect to the Cochran Trust, the Court concludes that it would need to\nengage in sweeping conjecture, which is not supported by the evidence, to find that\ndamages resulted to the Beneficiaries based on the circumstances presented here.\n(26) Accordingly, this Court concludes that KeyBank did not breach its fiduciary\nresponsibility to the Trust or the Beneficiaries, and the lack of financial reporting to the\nBeneficiaries and the decision to the [sic] reinvest the corpus of the Trust in a guaranteed\ninsurance policy was not the proximate cause of damages to the Beneficiaries.\n(27) In conclusion, by insuring [sic] that the Trust was funded by a guaranteed death\nbenefit in the sum of $2,536,000.00, KeyBank acted in good faith to protect the interests\nof the Beneficiaries and to comply with the directives of the Settlor as contained in the\nTrust document.\nId. at 22\xe2\x80\x9324. The Beneficiaries now appeal.\nDISCUSSION AND DECISION\nI. Standard of Review\nThe trial court entered findings of fact and conclusions of law pursuant to Indiana\nTrial Rule 52(A). We may not set aside the findings or judgment unless they are clearly\nerroneous. Menard Inc. v. Dage-MTI. Inc., 726 N.E.2d 1206, 1210 (Ind. 2000). First, we\nconsider whether the evidence supports the factual findings. Id. Second, we consider\nwhether the findings support the judgment. Id. \xe2\x80\x9cFindings are clearly erroneous only when\nthe record contains no facts to support them either directly or by inference.\xe2\x80\x9d Quillen v.\nQuillen, 671 N.E.2d 98, 102 (Ind. 1996)..A judgment is clearly erroneous if it relies on an\nincorrect legal standard. Menard, 726 N.E.2d at 1210.\nIn conducting our review, we give due regard to the trial court\'s ability to assess the\ncredibility of witnesses. Id. .While we defer substantially to findings of fact, we do not do so\nto conclusions of law. Id. We do not reweigh the evidence; rather, we consider the evidence\nmost favorable to the judgment with all reasonable inferences drawn in favor of the\njudgment. Yoon v. Yoon, 711 N.E.2d 1265, 1268 (Ind. 1999).\n\n272\n\n\x0cII. The Prudent Investor Act\nThe Beneficiaries first argue that the trial court erroneously concluded that\nKeyBank\'s actions leading up to the 2003 Exchange did not violate the Indiana Uniform\nPrudent Investor Act (PIA). Ind. Code \xc2\xa730-4-3.5-1 et. seq. In relevant part, the prudent\ninvestor rule, as set forth in the PIA, provides as follows:\n(a) A trustee shall invest and manage trust assets as a prudent investor would, by\nconsidering the purposes, terms, distribution requirements, and other circumstances\nof the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill,\nand caution.\n(b) A trustee\'s investment and management decisions respecting individual assets\nmust be evaluated not in isolation but in the context of the trust portfolio as a whole\nand as a part of an overall investment strategy having risk and return objectives\nreasonably suited to the trust.\n(c) Among circumstances that a trustee shall consider in investing and managing trust\nassets are those of the following that are relevant to the trust or its beneficiaries: (1)\nGeneral economic conditions, (2) The possible effect of inflation or deflation, ***(5)\nThe expected total return from income and the appreciation of capital, (6) Other\nresources of the beneficiaries, (7) Needs for liquidity, regularity of income, and\npreservation or appreciation of capital.\n***\n(d) A trustee shall make a reasonable effort to verify facts relevant to the investment\nand management of trust assets.\n***\n(f) A trustee who has special skills or expertise, or is named trustee in reliance upon\nthe trustee\'s representation that the trustee has special skills or expertise, has a duty\nto use the special skills or expertise.\nI.C. \xc2\xa730-4-3.5-2.\nA. Delegation\nThe Beneficiaries first argue that KeyBank violated the PIA by imprudently and\n273\n\n\x0cimproperly delegating certain decisionmaking functions to Roberson and Stuart. Initially, we\nobserve that the PIA contemplates the delegation of functions by a trustee under certain\ncircumstances:\nA trustee may delegate investment and management functions that a prudent\ntrustee of comparable skills could properly delegate under the circumstances. The\ntrustee shall exercise reasonable care, skill, and caution in: (1) selecting an agent; (2)\nestablishing the scope and terms of the delegation, consistent with the purposes\nand terms of the trust; and (3) reviewing the agent\'s actions periodically in order to\nmonitor the agent\'s performance and compliance with the terms of the delegation.\nI.C. \xc2\xa730-4-3.5-9(a)..\nHere, it is evident that Roberson chose to monitor the Trust throughout its\nexistence. He helped to create it and, in 1999, recommended an exchange of policies. Then,\nin 2003, KeyBank began its own review of the viability of the current structure of the Trust,\nengaging Oswald to analyze the current VUL policies. Simultaneously\xe2\x80\x94and of his own\nvolition, apparently \xe2\x80\x94Roberson conducted his own review. Roberson eventually proposed\nto KeyBank that a John Hancock policy be purchased to replace the two VUL policies.\nAfter Roberson made his proposal, KeyBank again hired Oswald to conduct an\nindependent review of the John Hancock policy. The fact that Roberson submitted the\npolicy for review does not constitute a delegation of KeyBank\'s decisionmaking duties.\nOswald was an outside, independent entity with no policy to sell or any other financial stake\nin the outcome. Under these circumstances, we do not find that KeyBank delegated any\ninvestment or other duties to Roberson. Although the Beneficiaries direct our attention to\nevidence in the record supporting their contention that there was, in fact, a delegation, this is\nmerely a request that we reweigh the evidence\xe2\x80\x94a request we decline.\nB. Oswald\'s Recommendations\nThe Beneficiaries next argue that KeyBank violated the PIA by disregarding\nOswald\'s recommendations. As noted above, KeyBank first asked Oswald to review the\nexisting VUL policies. After comparing the policies\' respective hypothetical performances\ngiven hypothetical interest rates, Oswald rated both policies as a Category Three on a scale\nfrom one to five, noting that \xe2\x80\x9cadditional future premiums may be required\xe2\x80\x9d and that the\n274\n\n\x0cpolicies \xe2\x80\x9cshould be audited every two to three years or more often\xe2\x80\x9d under certain\ncircumstances. Appellants\' App. p. 312\xe2\x80\x9313, 315. KeyBank then asked Oswald to review the\nproposed John Hancock policy. Oswald found that no further premiums would be required\nto maintain that policy until Stuart reached the age of 100. Ultimately, Oswald recommended\nthe purchase of the John Hancock policy, rating the policy as a Category One on a scale\nfrom one to five, with one being the best. No further audits would be necessary. Id. at 334\xe2\x80\x93\n35.\nHaving reviewed these reports, it is evident that Oswald found both options\xe2\x80\x94the\nexisting VUL policies and the John Hancock policy\xe2\x80\x94to be palatable. Each had their own\nsets of pros and cons. The existing VUL policies may have lapsed before Stuart reached the\nage of 60 and would likely have required additional premiums to finance\xe2\x80\x94money that Stuart\nno longer had. The John Hancock policy, on the other hand, offered a significantly reduced\ndeath benefit but was guaranteed to remain in force until Stuart reached the age of 100 and\nwould require no additional financing. Oswald found the John Hancock policy to warrant\nthe highest rating and concluded that no further audits would be necessary. Under these\ncircumstances, we cannot say that KeyBank\'s decision to exchange the VUL policies for the\nJohn Hancock policy parted ways from Oswald\'s advice and recommendations. KeyBank\nmerely chose between two relatively acceptable options\xe2\x80\x94a decision it was entitled to make\nas trustee. We do not find that it acted imprudently on this basis.\nC. Investigation of Alternatives\nThe Beneficiaries next fault KeyBank for failing to investigate alternatives aside from\nretaining the existing VUL policies or exchanging them for the John Hancock policy. It is\nvery likely that, no matter what the circumstances, a trustee could always do more.\nInvestigate further, engage in more brainstorming, expand the scope of its queries, etc. It is\ndifficult, if not impossible, to draw a bright line demarcating the point at which a trustee has\ndone enough from the point at which it must do more. Here, KeyBank was concerned about\nthe state of the economy, the stock market, and Stuart\'s limited financial resources. It\nexamined the viability of the existing policies and investigated at least one other option. Of\ncourse it could have done more, but nothing in the record leads us to second-guess the trial\ncourt\'s conclusion that, while KeyBank\'s \xe2\x80\x9cprocess was certainly less than perfect,\xe2\x80\x9d it was\nadequate. Appellants\' App. p. 22\xe2\x80\x9324. Thus, it was not clearly erroneous for the trial court to\n275\n\n\x0cconclude that KeyBank did not act imprudently for this reason.\nThe Beneficiaries also argue briefly that KeyBank\'s conduct surrounding the 1999\nExchange violated the PIA. As noted above, at the time KeyBank assumed the duties of\nsuccessor trustee, the underwriting for the exchange of policies had been approved and\nStuart had already submitted to the physical exams. Indeed, the exchange had been\ncontemplated since the summer of 1998. Furthermore, the transaction nearly doubled the\ntotal death benefit available under the trust. At trial, the Beneficiaries\' experts testified that\nthey had originally committed a calculation error with respect to the 1999 Exchange and,\nonce the error was corrected, they believed that the risk factors associated with the 1999\nExchange were within the range of defensible possibilities. Appellee\'s App. p. 412\xe2\x80\x9317. Under\nthese circumstances, there is no evidence supporting the Beneficiaries\' argument that\nKeyBank violated the PIA with its conduct in 1999.\nD. No Hindsight\nThe PIA cautions that \xe2\x80\x9c[c]ompliance with the prudent investor rule is determined in\nlight of the facts and circumstances existing at the time of a trustee\'s decision or action and\nnot by hindsight.\xe2\x80\x9d I.C. \xc2\xa730-4-3.5-8. Here, at the time KeyBank was evaluating its options\nbefore the 2003 Exchange, it was working with the following facts and circumstances: (1) a\nrapidly declining stock market; (2) the most recent two years, in which the Trust had lost\nprogressively more money, with every reason to believe that further erosion would occur\nwith every day it held the VUL policies; (3) a grantor in his early 50s with a life expectancy of\n88 years; (4) a grantor who had lost a great deal of money because of the economic decline\nand, consequently, had no further funds to invest in the trust; and (5) a trust that consisted\nof two life insurance policies that an independent expert estimated could lapse within\napproximately five years if no further funds were invested.\nUnder these circumstances, KeyBank\'s decision to exchange the VUL policies for\nthe John Hancock policy was eminently prudent, reduction in death benefit notwithstanding.\nThat a \xe2\x80\x9cwait and see\xe2\x80\x9d approach may also have been a prudent course of action does not alter\nthe propriety of the exchange. We now know, in hindsight, that the economy improved and\nStuart died unexpectedly less than a year after the 2003 Exchange took place\xe2\x80\x94given those\nfacts, of course, we understand that the Beneficiaries wish that KeyBank had made a\ndifferent decision. But keeping in mind only the facts and circumstances at the time\n276\n\n\x0cKeyBank made its decision, we cannot say that its decision violated the PIA.\nIII. Trustee\'s Duties\nThe Beneficiaries next argue that even if KeyBank did not violate the PIA, it\nbreached a number of its duties to them. A trust is a fiduciary relationship between a person\nwho, as trustee, holds title to property and another person for whom, as beneficiary, the title\nis held. I.C. \xc2\xa7 30-4-1-1(a). A \xe2\x80\x9cbreach of trust\xe2\x80\x9d is a violation by the trustee of any duty that is\nowed to the beneficiary, with the duties being established by statute and by the terms of the\ntrust. Davis v. Davis, 889 N.E.2d 374, 380 (Ind. Ct.App. 2008). In relevant part, Indiana Code\nsection 30-4-3-6 provides as follows:\n(a) The trustee has a duty to administer a trust according to its terms.\n(b) Unless the terms of the trust provide otherwise, the trustee also has a duty to do\nthe following: (1) Administer the trust in a manner consistent with [the PIA]. * * *\n(3) Preserve the trust property. (4) Make the trust property productive for both the\nincome and remainder beneficiary. As used in this subdivision, \xe2\x80\x9cproductive\xe2\x80\x9d includes\nthe production of income or investment for potential appreciation. * * * (7) Upon\nreasonable request, give the beneficiary complete and accurate information\nconcerning any matter related to the administration of the trust and permit the\nbeneficiary or the beneficiary\'s agent to inspect the trust property, the trustee\'s\naccounts, and any other documents concerning the administration of the trust.* * *\n(10) Supervise any person to whom authority has been delegated....\nFurthermore, a trustee owes its beneficiaries a duty of accounting, which requires the\ntrustee to deliver an annual written statement of the accounts to each income\nbeneficiary or her personal representative. I.C. \xc2\xa7 30-4-5-12(a). Finally, it is well\nestablished that a trustee \xe2\x80\x9cshall invest and manage the trust assets solely in the\ninterest of the beneficiaries.\xe2\x80\x9d I.C. \xc2\xa7 30-3-5-5.\nA. Relationship to Beneficiaries\n1. Annual Reports\nThe record reveals that when the Beneficiaries were minors\xe2\x80\x94as they were for most\nof the relevant period of time\xe2\x80\x94KeyBank sent its annual reports to Stuart, their father. This\n277\n\n\x0cwas not a perfect solution, inasmuch as it was Vance, their mother, who was the custodial\nparent. But it establishes KeyBank\'s good faith, at the least. Cf. Davis, 889 N.E.2d at 383-84\n(finding a breach of trust where trustee willfully withheld information from the beneficiaries\nand engaged in self-dealing).\nAt some point before the 2003 Exchange, one of the Beneficiaries turned eighteen.\nKeyBank inadvertently failed to send her a copy of the annual report at that time. Following\nher birthday, she requested documents from KeyBank. A KeyBank representative contacted\nthe Beneficiary and Vance and indicated that the documents were ready at a local KeyBank\noffice to be picked up. Yet again, therefore, we cannot conclude that there is any evidence\nthat KeyBank willfully withheld information from the Beneficiary.\nThe Beneficiaries also argue that KeyBank breached its duties by failing to provide\nsufficient information regarding its plan to carry out the 2003 Exchange. We cannot agree,\ninasmuch as the Trust itself gave the trustee the power to surrender or convert the policies\nwithout the consent or approval of anyone: \xe2\x80\x9cThe Trustee shall have all of the rights of the\nowner of such policies and, without the consent or approval of the Grantor or any other person,\nmay sell, assign or hypothecate such policies and may exercise any option or privilege\ngranted by such policies, including ... the right to ... surrender or convert such policies....\xe2\x80\x9d\nAppellants\' App. p. 455 (emphasis added). There was no requirement, therefore, that\nKeyBank notify the Beneficiaries of the impending exchange, inasmuch as neither their\nconsent nor approval were required to carry out the transaction.\nEven if we were to find that KeyBank\'s actions herein constituted a breach of its\nduty to the Beneficiaries, we cannot countenance the Beneficiaries\' argument that the lack of\nreceipt of an annual report or failure to provide information about the exchange, without\nmore, supports an award of compensatory damages. For damages to be warranted, we can\nonly conclude that causation must be established. The trial court found that \xe2\x80\x9cthe receipt of\ntimely financial reports by the Beneficiaries would not have changed the negative financial\ncondition of the trust\xe2\x80\x9d and that the \xe2\x80\x9clack of financial reporting to the Beneficiaries was not\nthe proximate cause of damages to the Beneficiaries.\xe2\x80\x9d Appellants\' App. p. 22\xe2\x80\x9324. There is\ncertainly evidence in the record supporting those findings. We agree with the trial court that\n\xe2\x80\x9cfinancial trends outside of the control of the Trustee or the Beneficiaries were the direct\nand proximate cause of the problem facing the Trust in 2003,\xe2\x80\x9d id., and would add that\n278\n\n\x0canother contributing problem beyond everyone\'s control was Stuart\'s tragic, untimely death.\nWe simply cannot conclude that KeyBank\'s shortcomings vis a vis the provision of annual\nreports and other information to the Beneficiaries was a proximate cause of any damages to\nthe Beneficiaries.\n2. Duty of Loyalty\nNext, the Beneficiaries argue that KeyBank somehow breached its duty of loyalty to\nthem. The only evidence they point to in support of this argument is the fact that KeyBank\nhad various contacts and communications with Stuart between 1999 and 2003. According to\nthe Beneficiaries, this evidence supports an inference that KeyBank was loyal to Stuart rather\nthan to the Beneficiaries, as required by law. We cannot agree. A trustee must, as a practical\nmatter, have contacts with the settlor. Appellee\'s App. p. 474. For example, if changes are\ngoing to be made to an insurance policy, those changes generally require that the settlor\nsubmit to a physical exam; therefore, such a change cannot be effectuated without\ncommunication between a trustee and settler. Id. Nothing in the law prohibits contact\nbetween a trustee and settlor, nor should it. Here, nothing in the record leads us to conclude\nthat KeyBank breached its duty of loyalty to the Beneficiaries.\nB. Delegation\nThe Beneficiaries also argue that KeyBank breached its duties to them by delegating\ncertain decisionmaking functions to Roberson without adequate oversight. As discussed\nabove, however, the record supports a conclusion that, in fact, no such delegation occurred.\nFurthermore, KeyBank engaged its own independent expert to evaluate the VUL policies\nand the John Hancock policy that was suggested by Roberson. Under these circumstances,\nwe do not find that KeyBank breached its duties to the Beneficiaries in this regard.\nC. Grantor\'s Intent\nFinally, the Beneficiaries argue that the trial court erroneously concluded that the\n2003 Exchange was consistent with Stuart\'s intent. The primary goal in construing a trust\ndocument is to ascertain and effectuate the intent of the settlor, which may be determined\nfrom the language of the trust instrument and matters surrounding the formation of the\ntrust. Malachouski v. Bank One, 590 N.E.2d 559, 565-66 (Ind. 1992). The Beneficiaries suggest\nthat the trial court was improperly considering Stuart\'s acts or requests made after the trust\n279\n\n\x0cwas executed in reaching that conclusion. We cannot agree, however, inasmuch as the trial\ncourt explicitly concluded as follows: \xe2\x80\x9cHad the insurance policies lapsed, the Beneficiaries\nwould have received no distribution from the Trust. Certainly that outcome was not within\nthe intent of the Settlor at the time he established the Trust.\xe2\x80\x9d Appellants\' App. p. 22\xe2\x80\x9324 (emphasis\nadded). Nothing in the record suggests that the trial court was clearly erroneous in reaching\nthat conclusion, and we decline to disturb its ruling for this reason.\nCONCLUSION\nIn sum, we find that the trial court did not erroneously conclude that, while\nKeyBank\'s decisionmaking process and communication with the Beneficiaries was not\nperfect, it was sufficient. Although it is tempting to analyze these cases with the benefit of\nhindsight, we are not permitted to do so, nor should we. KeyBank chose between two\nviable, prudent options, and given the facts and circumstances it was faced with at that time,\nwe do not find that its actions were imprudent, a breach of any relevant duties, or a cause of\nany damages to the Beneficiaries.\nThe judgment of the trial court is affirmed.\nClass Discussion Tool\nGlover Washington placed his entire estate in trust for the benefit of his seventy-five\nyear old wife, Sarah for life, with the remainder to be distributed to his five children. The\nprimary corpus of the trust consisted of a stock portfolio. The portfolio contained the\nfollowing: 60% Washington Computer stock; 10% Apple Computer stock; 5% Dell\nComputer stock; and 5% Microsoft stock. The 60% Washington Computer stock\nrepresented a 58% ownership interest in the company. The Washington Computer Company\nhad been in the Washington family for over fifty years and Glover made it clear that he\nwanted his descendants to always have the controlling interest in the company. In 2000,\nGlover died and City Bank assumed its role as trustee. At that time, Washington Computer\nstock was selling for $123 per share. In 2004, the Washington Computer stock was selling\nfor $80 per share. The stock continued to sell as follows: 2005 ($72); 2006 ($108); 2007\n($94). When Sarah died in 2008, the Washington Computer stock was selling for $85 per\nshare. At no time did City Bank discuss selling the trust\xe2\x80\x99s shares of Washington Computer\nstock. In 2009, when City Bank made its accounting to Glover\xe2\x80\x99s five children and prepared\n280\n\n\x0cto distribute the remaining trust funds, the children objected to the accounting.\nchildren sued City Bank for breaching the duty of prudence. What result?\n\n281\n\nThe\n\n\x0cChapter 10 - Duty of Loyalty\nThe trustee must administer the trust solely in the interest of the beneficiaries.\nThis is similar to the exclusive benefit rule under ERISA that requires retirement funds to be\nmanaged for the exclusive benefit of the retirees. The two main indicators of disloyalty occur\nwhen the trustee engages in self-dealing or ignores a conflict of interest. Self-dealing occurs\nwhen the trustee buys or benefits from the sell or purchase of trust property directly or\nindirectly. If the trustee engages in self-dealing, good faith and fairness to the beneficiaries\nare not enough to save the trustee from liability. In case of self-dealing, the court makes no\nfurther inquiry. Therefore, the trustee\xe2\x80\x99s good faith and the reasonableness of the transaction\nare irrelevant. The beneficiaries have several remedies when the trustee engages in selfdealing. First, the beneficiaries can hold the trustee accountable for any profit he made on\nthe transaction. In the alternative, if the trustee purchased the property from the trust, the\nbeneficiary can sue to compel the trustee to restore the property to the trust. In the event the\ntrustee has sold his own property to the trust, the beneficiary can sue to make the trustee\nreturn the purchase price and take back his property. The trustee is not without defenses\nwhen it comes to self-dealing. In order to avoid liability, the trustee must prove that the\nsettlor authorized the self-dealing or that the beneficiaries consented to the transaction after\nhe made full disclosure. Nonetheless, the transaction must be fair and reasonable.\nA conflict of interest occurs when the trustee facilitates the sell or purchase of\ntrust property to a person or entity to which the trustee also owes a fiduciary duty. For\nexample, if an attorney who is acting as trustee sells trust property to one of his clients, a\nconflict of interest arises. The court will evaluate the transaction to see if was fair and\nreasonable to the trust. In that case, the trust pursuit rule provides a remedy for the\nbeneficiary. Under that rule, if the trustee wrongfully disposes of trust property and acquires\nother property, the beneficiary is entitled to enforce a constructive trust on the newly\nacquired property so acquired. Hence, the new property becomes a part of the trust assets.\nIn the event that the trust property ends up in the hands of a third party, there are two\npossible results. If the third party is not a bona fide purchaser (BFP))(one who pays value\nand takes without notice of the breach of trust), he does not hold the trust property free of\n\n282\n\n\x0cthe trust. If the person is a BFP-he holds the trust property free of the trust and is under no\nliability to the beneficiary.\nProblems\n1. Karlowba established a support trust for the benefit of her son Kahn. The corpus of the\ntrust was a collection of antique cars valued at $200,000 and other property. After Karlowba\ndied, Cory assumed his roll as trustee. The trust needed cash in order to pay monthly income\nto Kahn. Thus, Cory decided to purchase the antique car collection from the trust. In order\nto avoid the appearance that he was taking advantage of the trust, Cory purchased the car\ncollection for $350,000. Later, the car collection appreciated to a value of $800,000. Kahn\nsued Cory to recover the profits from the appreciation of the car collection. What result?\n2. Alberto established a trust for his daughter Isabella. The corpus of the trust was an\napartment complex valued at two million dollars. Lionel was appointed as trustee over the\nIsabella trust. Lionel was also trustee over a second trust that had been created by Bradford\nfor the benefit of his son, Carlton. For tax reasons, the Carlton trust needed to make an\ninvestment. Lionel purchased the apartment complex from the Isabella trust for the Carlton\ntrust. Lionel used two million dollars from the Carlton trust to purchase the apartment\ncomplex. Later, the apartment complex was worth three million dollars. Isabella sued Lionel\nto recover the profits from the appreciation of the apartment complex. What result?\n3. Please label the following situations as self-dealing or conflict of interest.\na). Elaine\xe2\x80\x99s brother Chris purchased property from a trust over which she is trustee.\nb) Joseph gives property from a trust over which he is trustee to his mistress, Arlene.\nc) Galvin sells land owned by his medical practice to a trust over which he is trustee.\nd). Melvin, a psychologist, sells property from a trust over which he is trustee to one of his\npatients.\ne) Zach sells property from a trust over which he is trustee to City College. Zach is on the\nboard of trustees of City College.\n\nBoyce Family Trust, 128 S.W.3d 630\nWILLIAM H. CRANDALL, Jr., Judge.\n\n283\n\n\x0cDefendant, Robert B. Snyder, appeals from the judgment, entered in a court-tried\ncase, in favor of plaintiffs, the John R. Boyce Family Trust, John R. Boyce, Mary Ann Boyce,\nDaniel P. Boyce, M. Elizabeth Boyce, Emily Ann Boyce, and Stephen Pallen Boyce, in their\naction for removal of the trustee and for damages for the trustee\'s breach of fiduciary duty.\nWe affirm in part and reverse in part.\nIn a court-tried case, the judgment of the trial court will be affirmed unless there is\nno substantial evidence to support the judgment, it is against the weight of the evidence, or it\nerroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. Banc. 1976.\nWe accept all evidence and inferences favorable to the judgment, and disregard all contrary\nevidence and inferences. Central Dist. Alarm, Inc. v. Hal-Yuc. Inc., 886 S.W.2d 210, 211 (Mo.\nApp. E.D. 1994. The trial court is in the best position to judge the credibility of the\nwitnesses. VanBooven v. Small, 938 S.W.2d 324, 327 (Mo.App. W.D. 1997).\nThe evidence established that the John R. Boyce Family Trust (hereinafter \xe2\x80\x9cfamily\ntrust\xe2\x80\x9d) was created by the Henrietta Boyce Revocable Living Trust upon the death of\nHenrietta Boyce in February 1994. The beneficiaries of the trust were John R. Boyce,\nHenrietta\'s son; Mary Ann Boyce, Boyce\'s wife; and their four children, Daniel P. Boyce, M.\nElizabeth Boyce, Emily Ann Boyce, and Stephen Pallen Boyce. Henrietta named Anthony\nRibaudo as trustee of the family trust; and in the event Ribaudo resigned, designated\ndefendant, Snyder, as successor trustee.\nFor years, plaintiff, Boyce, and defendant, Snyder, were close personal friends and\nbusiness associates; and Boyce, an attorney, represented Snyder in legal matters. Snyder\nbegan working in the family grocery store as a teenager. In 1962, at the age of 22, he\nacquired his first ownership interest in a grocery store. He later formed Arnold Discount\nFoods, Inc. (hereinafter \xe2\x80\x9cADF\xe2\x80\x9d), a corporation that owned and operated several small\ngrocery stores. He converted the stores to Save\xe2\x80\x93a\xe2\x80\x93Lot stores, which were part of a chain of\ndiscount grocery stores. He also bought grocery stores which had failed or were failing. In\n1983, he acquired a store in Eureka, Missouri, forming a second corporation, Eureka\nDiscount Foods, Inc. (hereinafter \xe2\x80\x9cEDF\xe2\x80\x9d), to own and operate the store as a Save\xe2\x80\x93a\xe2\x80\x93Lot\nstore (hereinafter \xe2\x80\x9cEureka store\xe2\x80\x9d). After 1983, Snyder opened additional Save\xe2\x80\x93a\xe2\x80\x93Lot stores\nand placed them in ADF corporation.\nSnyder was also an owner and director of First Exchange Bank (hereinafter \xe2\x80\x9cthe\n284\n\n\x0cbank\xe2\x80\x9d), which failed and was taken over by the FDIC. At Snyder\'s urging, Boyce had placed\nseveral loans with the bank. After the bank\'s failure, the FDIC called Boyce\'s loans. When\nBoyce was unable to obtain financing elsewhere, the FDIC obtained a judgment against him.\nIn the fall of 1994, Boyce met with Snyder several times to discuss Boyce\'s financial\nproblems. During the meetings, Boyce learned that Snyder was interested in selling the\nEureka store. Snyder\'s reasons for selling the Eureka store, as stated by him, were that he\nwanted to lessen his workload, to reduce the number of stores he owned, and to work with\nhis son under only one corporation, ADF.\nBoyce expressed an interest in purchasing the Eureka store not only as an investment\nopportunity for the family trust but also as a way of providing a job for his son, Daniel.\nBoyce expressed concern to Snyder, however, that neither he nor Daniel had any experience\nin the grocery business. Snyder assured Boyce that Daniel could be trained to operate the\nstore. Snyder and Boyce were both aware that a Wal\xe2\x80\x93Mart super center was planning to\nopen in Eureka.\nSnyder provided Boyce with the past financial records for the Eureka store and\nintroduced him to Save\xe2\x80\x93a\xe2\x80\x93Lot executives. The Save\xe2\x80\x93a\xe2\x80\x93Lot representatives told Boyce that\nthe stores were so easy to run that a \xe2\x80\x9cchimpanzee could run one.\xe2\x80\x9d On the basis of their\nexperience, they predicted that the opening of the Wal\xe2\x80\x93Mart super center would cause an\ninitial drop in sales of ten to 15 percent, but that the Eureka store would recover the loss\nwithin six months. Snyder concurred in that opinion.\nBoyce determined that the family trust should purchase the Eureka store and agreed\nwith Snyder on a purchase price of $403,000.00. The sale was structured as a sale of the\ncommon stock of EDF, so that Snyder could offset the capital gain from the sale of the\nstore against the capital loss he incurred when the bank failed. No date was set for closing.\nBoyce agreed to close when Snyder felt that Daniel was sufficiently trained to operate the\nEureka store successfully.\nIn January 1995, Daniel began working at one of Snyder\'s stores located in Fenton,\nMissouri. Snyder told his general manager to train Daniel to take over the Eureka store. The\nFenton store manager started Daniel at an entry level position and after two months moved\nhim into a management trainee program when he became aware that he was training Daniel\n285\n\n\x0cto take over the management of the Eureka store. In May 1995, Daniel continued his\ntraining at the Eureka store under Bob Heaton, the manager of the Eureka store who had\nbeen interested in purchasing the Eureka store but had decided against it. Snyder\'s general\nmanager continued to monitor Daniel\'s training several times per week and told Daniel to\ncontact her whenever necessary. Daniel was also free to contact the manager of the Fenton\nstore for guidance. Heaton and Daniel, however, did not get along. Heaton eventually left\nemployment at the Eureka store at Daniel\'s request. Daniel was left to manage the Eureka\nstore on his own, with occasional help from Snyder and his two managers. Snyder\'s own\nstore managers had years of experience in the grocery business before they were promoted\nto store manager.\nThe Wal\xe2\x80\x93Mart super center was scheduled to open in the mid-summer of 1995.\nSnyder was anxious to close on the sale of the Eureka store. In May 1995, Snyder told Boyce\nthat Daniel was ready to manage the Eureka store. Boyce relied on Snyder\'s representation in\ndeciding to proceed with the closing. When the purchase of the Eureka store was proposed\nto the trustee of the family trust, Anthony Ribaudo, he resigned as trustee because he did not\nhave any experience in the grocery business. As the designated successor trustee, Snyder\nagreed to serve as trustee.\nOn May 30, 1995, Snyder signed documents accepting the trustee position. On May\n31, 1995, the closing on the sale of the Eureka store took place. Boyce drafted the terms of\nthe purchase agreement, which provided as follows: $265.00 to purchase one share of EDF\nfrom Snyder and $265,000.00 to redeem the remaining shares from Snyder, with the result\nthat the family trust owned the only share of EDF corporation; $13,000.00 to Snyder for\nADF corporation to provided consulting to EDF corporation, payable in monthly\ninstallments; $125,000.00 to Snyder for a non-compete agreement to prohibit him from\nowning or operating a grocery store within 10 miles of the Eureka store for a period of five\nyears, payable in monthly installments. The family trust guaranteed EDF\'s loan of\n$175,000.00 from Rockwood Bank and loaned EDF an additional $75,000.00. Snyder signed\nthe documents for the sale and financing on his own behalf and as successor trustee of the\nfamily trust.\nFor the first fiscal year the Eureka store was in business, after the opening of the\nWal\xe2\x80\x93Mart super center, the figures reflected an average decline in sales of 17 percent per\n286\n\n\x0cweek. In addition, shortly after closing, the Eureka store\'s refrigeration equipment needed\nextensive repairs and in some cases replacement. In the fall of 1995, Snyder acquired an\ninterest in real property within a ten-mile radius of the Eureka store, with the intent of\nopening another grocery store with his son. Snyder and his son formed a new limited liability\ncompany to operate the new store and opened the store in May 1998. Rockwood Bank\nrenewed EDF\'s loan in August 1997, August 2000, and August 2001. At the time of trial, the\nfamily trust remained liable on its guaranty of the EDF loan; and the family trust\'s loan to\nEDF remained unpaid and had increased to $160,676.27.\nIn 2000, plaintiffs brought the present action against Snyder. Their petition against\nSnyder was in six counts: Count I for his removal as trustee; Count II for breach of his\nfiduciary duty; Count III for his ultra vires acts; Count IV for avoidance of the ultra vires\nacts; Count V for fraudulent misrepresentation; and Count VI for imposition of a\nconstructive trust. In their action, they sought money damages, a rescission of the sale of the\nEureka store, and the imposition of a constructive trust on the proceeds of the sale of the\nEureka store for the benefit of the family trust. Plaintiffs also brought one count for\nnegligent misrepresentation (Count VII) against Moran Foods, Inc. d/b/a Save\xe2\x80\x93a\xe2\x80\x93Lot, Ltd.;\nbut dismissed that count without prejudice before trial. Snyder counterclaimed, seeking\nindemnification from the family trust for his attorney\'s fees and a declaratory judgment that\nhe was entitled to indemnification. During the pendency of this action, Snyder resigned as\ntrustee and the court appointed Daniel as interim trustee.\nAfter a bench trial, the court entered judgment in favor of plaintiffs and against\nSnyder on Count I for the removal of Snyder as trustee. On Count II for breach of fiduciary\nduty, the court awarded total damages of $285,000.00: $185,000.00 for the family trust\'s\npurchase of the Eureka store; and $100,000.00 for the monies loaned by the family trust,\nwhich the trial court determined was a total loss. On Count VI, the court imposed a\nconstructive trust in the amount of $285,000.00 on the proceeds of the sale of the Eureka\nstore. The court dismissed as moot plaintiffs\' claims in Counts III, IV, and V and entered\njudgment in favor of plaintiffs on Snyder\'s counterclaims. Snyder appeals from that\njudgment.\nIn his first point, Snyder contends that the trial court erred in entering judgment in\nfavor of plaintiffs because his challenged conduct did not amount to misrepresentations, but\n287\n\n\x0cwere merely expressions of opinion or predictions. In addition, he argues that the conduct\noccurred prior to his assuming the role of trustee and that he became trustee only after the\ndeal was fully negotiated and set for closing.\nA trustee is a fiduciary of the highest order and is required to exercise a high\nstandard of conduct and loyalty in administration of the trust. Ramsey v. Boatmen\xe2\x80\x99s First Nat\xe2\x80\x99l\nBank of K.C., N.A., 914 S.W.2d 384, 387 (Mo. App. W.D. 1996). Although the trustee has\nmany duties emanating from the fiduciary relationship, the most fundamental is the duty of\nloyalty. Id. As part of this duty, the trustee is to administer the trust solely in the interest of\nthe beneficiary. Id. This duty precludes self-dealing, which under most circumstances is a\nbreach of the fiduciary duty. Id.\nHere, Snyder\'s argument that he merely expressed opinions and predictions in lieu\nof misrepresentations is without merit. He was very familiar with the grocery business,\nhaving worked in the business for well over 40 years in varying capacities. During that time,\nhe had negotiated for and purchased several failed or failing grocery stores. There was\nevidence that Snyder had no personal experience regarding the impact a Wal\xe2\x80\x93Mart super\ncenter would have on the sales of the Eureka store, although he admitted at trial that he was\nconcerned about the competition from a Wal\xe2\x80\x93Mart super center. Yet, he assured Boyce that\nthe decline in store sales would be minimal and would be recovered six months after the\nopening of the Wal\xe2\x80\x93Mart super center. He also was anxious to close on the Eureka store and\npushed for closing, presumably because he was worried about the increased competition\nfrom the Wal\xe2\x80\x93Mart super center. At trial, he was unable to explain his eagerness to close the\nsale of the Eureka store. He withheld information from Boyce about the true value of the\nstore, especially as it faced competition from a Wal\xe2\x80\x93Mart super center. Knowledge of the\nvalue of the Eureka store was particularly within his province, in light of his experience in\npurchasing grocery stores experiencing financial difficulty. Snyder was under a duty to\ninform the beneficiaries of all facts known by him so that they could make an informed\ndecision about whether to proceed with the purchase of the Eureka store.\nIn addition, Snyder represented to Boyce that Daniel was ready to assume\nmanagement of the Eureka store. He did this, despite the fact that Daniel did not have any\nprior grocery store experience and had been in a management-trainee program for less than\nsix months. Further, his own store managers had many years of experience in the grocery\n288\n\n\x0cbusiness before he promoted them to managerial positions.\nFinally, Snyder misrepresented his reasons for selling the Eureka store, as evidenced\nby his subsequent conduct. His stated motives for selling were his desire to lessen his\nworkload, to reduce the number of stores he owned, and to work with his son under one\ncorporation. Yet, after selling the Eureka store, he opened an additional store in violation of\nthe non-compete agreement and even formed a new business entity to operate that store.\nThe trial court was not obligated to believe Snyder\'s proffered reasons for selling the\nEureka store. Nor was the court required to believe Snyder about what facts were known to\nhim at the time of closing. In a court-tried case, the court is free to disbelieve the testimony\nof a witness. See Ford Motor Credit Co. v, Freihaut, 871 S.W.2d 129, 131 (Mo. App. E.D. 1994).\nBoyce testified that, had Snyder apprised him of Daniel\'s lack of readiness to manage\nthe Eureka store successfully and of Snyder\'s true reasons for wanting to sell the Eureka\nstore, Boyce would not have recommended that the family trust purchase the store.\nSnyder\'s argument that the transaction was for all practical purposes completed prior\nto his assuming the position of trustee draws a distinction without a difference. Snyder was\nacting in his capacity as trustee at the time of closing the sale of the Eureka store. At that\ntime, he had the duty not only to disclose any information relevant to the sale but also to\navoid engaging in a financial transaction beneficial to his interests and detrimental to the\ninterests of the family trust. The trial court did not err in finding that Snyder breached his\nfiduciary duty to the family trust. Snyder\'s first point is denied.\nIn his second point, Snyder asserts that the trial court erred in entering judgment in\nfavor of plaintiffs because they not only consented to the transaction prior to closing but\nalso ratified the transaction after the fact by operating the Eureka store for five years before\nfiling the present action.\nWhen a competent beneficiary who has full knowledge of the facts and of his legal\nrights consents to a transaction, he cannot thereafter seek redress against the trustee even\nthough the transaction would otherwise be a breach of trust. Ramsey, 914 S.W.2d at 387. The\nconsent of the beneficiary, however, does not preclude him from holding the trustee liable\nfor a breach of trust, (1) if when he gave his consent, the beneficiary did not know of his\nrights and of the material facts which the trustee knew or should have known and which the\n289\n\n\x0ctrustee did not reasonably believe that the beneficiary knew or (2) if the consent of the\nbeneficiary was induced by improper conduct of the trustee. Id. (citing Section 216\nRestatement (Second) of Trusts). When a transaction involves a trustee, it must be fair and\nopen, and consent must be informed with all parties holding equal knowledge of material\nfacts and rights and otherwise free of influence. Ramsey, 914 S.W.2d at 388.\nHere, as discussed above, Boyce did not have full knowledge of all of the material\nfacts and did not have knowledge equal to Snyder\'s. Boyce had never been involved in the\ngrocery business, unlike Snyder who had been in the business for over 40 years. Boyce relied\non Snyder\'s estimate of the impact of the Wal\xe2\x80\x93Mart super center on the Eureka store\'s sales.\nBoyce relied on Snyder\'s representations that Daniel was ready to assume management of\nthe Eureka store. Snyder was aware that his knowledge regarding the sale of the Eureka store\nwas superior to Boyce\'s, yet he induced Boyce to proceed with the sale by representing that\nDaniel was ready to manage the store. Under these circumstances, Snyder breached his\nfiduciary duty to the trust.\nFurther, Snyder\'s argument that the plaintiffs\' continuing to operate the Eureka store\nwas tantamount to a ratification of the sale after the fact is specious. Plaintiffs, once they\npurchased the Eureka store, had no choice but to continue to operate it to protect their\ninvestment as much as possible. That conduct did not amount to ratification of the sale.\nSnyder\'s second point is denied.\nIn his third point, Snyder contends that the trial court erred in imposing a\nconstructive trust on the proceeds of the sale of the Eureka store. He first argues that there\nwas no underlying breach of fiduciary duty to warrant the imposition of a constructive trust.\nHis second argument is that there was no evidence that there were identifiable proceeds\nremaining on which to impose a constructive trust. We only discuss Snyder\'s second claim,\nbecause it is dispositive of this point on appeal.\nA constructive trust is a device employed by a court of equity to provide a remedy in\ncases of actual or constructive fraud or unjust enrichment. U.S. Fidelity and Guaranty Co. v.\nHiles, 670 S.W.2d 134, 137 (Mo. App. 1984). It may be imposed where, as the result of the\nviolation of confidence or faith reposed in another, or fraudulent act or conduct of such\nother, the plaintiff has been deprived wrongfully of, or has lost, some title, right, equity,\ninterest, expectancy, or benefit, in the property which, otherwise and but for such fraudulent\n290\n\n\x0cor wrongful act or conduct, he would have had. Id. The plaintiff may seek to impose the\nconstructive trust on the specific property after it has left the wrongdoer\'s hands, until it\nreaches the hands of a bona fide purchaser. Id. The plaintiff may also seek to impose the\nconstructive trust on, or to trace his property into, the proceeds of the property which are in\nthe hands of the wrongdoer. Id.. In this latter event, the plaintiff may recover any profit or\nincrease in value that has accrued. Id. The plaintiff is limited, however, to a proportionate\ninterest in the proceeds, if other separate property is commingled with wrongfully taken\nproperty to produce the price paid for the proceeds. Id. The plaintiff must prove his claim,\nboth the fact of wrongful taking and any tracing, by clear, cogent and convincing evidence.\nId.\nSnyder posits that the essence of a constructive trust is the identification of specific\nproperty or fund as the res upon which the trust may be attached. See Blue Cross Health\nServices, Inc. v, Sauer, 800 S.W.2d 72, 76 (Mo.App. 1990). Plaintiffs did not allege and did not\nestablish that any such identifiable property or fund existed to which the proceeds from the\nsale of the Eureka store could be traced.\nThe appropriate action to enforce a constructive trust is an action for money had\nand received. Campbell v. Webb, 363 Mo. 1192, 258 S.W.2d 595, 602 (1953). Notwithstanding\nthe fact that plaintiffs prayed for the equitable remedy of a constructive trust and for an\naccounting for all the proceeds of the sale, in the absence of any allegation of the existence\nof specific property or fund constituting the res upon which the trust might be imposed,\ntheir petition failed to invoke equity jurisdiction. See Blue Cross, 800 S.W.2d at 76. Nothing in\nthe record shows that plaintiffs are entitled to more than a money judgment. The trial court\nerred in imposing a constructive trust on the proceeds of the sale.\nUnder the circumstances of this case, however, it does not follow that Snyder is\nentitled to a new trial because of this error. See id. The case was fully tried with ample\nopportunity for all parties to present evidence on all issues framed by the pleading. There\nwas sufficient evidence that plaintiffs are entitled to have Snyder removed as trustee and to\nbe awarded an amount which represented the money wrongfully taken by Snyder as a result\nof his breach of his fiduciary duty to the family trust. The second part of Snyder\'s third point\nis granted.\nIn his fourth point, Snyder asserts that the trial court erred in entering judgment for\n291\n\n\x0cplaintiffs for money damages, because plaintiffs lacked standing to assert those claims, which\ncould only be brought by the successor trustee.\nThe beneficiaries have standing to bring the equitable actions for removal of the\ntrustee, disqualification of the successor trust, and for an accounting. Deutsch v. Wolff, 994\nS.W.2d 561, 566 (Mo. Banc. 1999 (citing Restatement (Second) of Trusts, section 177, 197199). The trustee, however, should bring the claims for money damages. Deutsch, 994 S.W.2d\n566. In Deutsch, Missouri Supreme Court recognized that several factors justified an\nexception to the general rule. Id. In the instant action, there are factors similar, although not\nidentical, to those in Deutsch that mitigate against the application of the rule requiring the\nsuccessor trustee to bring the present action. See Id. First, Snyder was actively involved in\nadministering the family trust during the pendency of this action. Although he resigned as\nsuccessor trustee, he did so 13 months after the action began. In addition, the court required\nthe interim trustee, who was appointed to serve during the litigation, to submit monthly\nincome and expense reports to Snyder and any withdrawals had to be submitted to Snyder\nfive days in advance of the proposed withdrawal. Second, Snyder denied that his conduct\njustified removal. Plaintiffs were required to prove their right to removal by establishing that\nSnyder had breached his fiduciary duty to the family trust and that the trust had been\ndamaged. Thus, the fact issues on the legal and equitable claims were identical. Third, Snyder\ndid not make any claim before the trial court that the proper party to assert the claim was the\nsuccessor trustee, but instead undertook a defense of the legal claims on their merits,\nincluding raising affirmative defenses and pleading counterclaims. Fourth, in addition to all\nthe beneficiaries, the family trust itself was a party-plaintiff. Fifth, the pleading alleged a\nbreach of Snyder\'s fiduciary duty to the trust. Sixth, the money judgment was entered in\nfavor of all plaintiffs, which included the family trust itself. To allow actions at law to be\nprosecuted with the equitable actions is also consistent with the doctrine that once equity\nacquires jurisdiction, it will retain it so as to afford complete justice between the parties. Id. at\n567. Thus, under the facts of this case, the beneficiaries had standing to bring this action.\nSnyder\'s fourth point is denied.\nIn his fifth point, Snyder challenges the award of damages of $285,000.00, because\nthe award was not supported by the evidence.\nThe trial court\'s findings relating to actual damages are entitled to great weight on\n292\n\n\x0cappeal and will not be disturbed unless the damages awarded are clearly wrong, could not\nhave been reasonably determined, or were excessive. Williams v. Williams, 99 S.W.3d 552, 557\n(Mo.App. W.D. 2003). If an award of damages is within the range of the evidence, an award\nof a particular amount may be considered responsive even though it does not correspond\nprecisely with the amount claimed. Id.\nHere, Boyce testified that the actual value of the Eureka store at the time of sale was\nabout $150,000.00. The measure of damages for misrepresentation is the difference between\nthe actual value of the thing sold and the value as represented. Smith v. Tracy, 372 S.W.2d\n925, 938 (Mo. 1963). The difference between the purchase price of $403,000.00 and actual\nvalue was $253,000.00. The court\'s award of $185,000.00 for this element of damages was\nwithin the range of the evidence.\nPlaintiffs also claimed damages for the money the family trust loaned in conjunction\nwith the Eureka store. The evidence was that at closing the family trust loaned $75,000.00 of\nthe purchase price and throughout the years of operation the family trust loaned additional\nmonies, with the result that the amount loaned increased to $160, 767.27. The court\'s award\nof $100,000.00 for this element of damages was within the range of the evidence. The trial\ncourt did not err in awarding damages. Snyder\'s fifth point is denied.\nThat part of the judgment imposing a constructive trust on the proceeds of the sale\nof the Eureka store is reversed. In all other respects, the judgment of the trial court is\naffirmed.\n\nEdwards v. Edwards, 842 P.2d 299\nWALTERS, Chief Judge.\nThis is a family dispute involving two agreements to develop real property located in\nthe vicinity of the Cascade Reservoir. Franklin Edwards (Frank), a real estate developer,\nbrought this action against his children and the estate of his deceased mother, seeking a\ndeclaratory ruling on the enforceability of a 1964 joint venture agreement and a 1977\ncontract to develop property held in trust. Following a trial, the district court decreed the\njoint venture dissolved as a result of Frank\'s wrongful conduct, and further held the\nsubsequent contract voidable as a consequence of Frank\'s breach of his duty as trustee. We\naffirm.\n293\n\n\x0cFacts and Procedural Background\nCharles and Ora Edwards had one child, Frank. In 1937, Charles and Ora bought\n1,350 acres of land near Donnelly, in Valley County. The federal government purchased the\nland in 1940 as part of the development of the Cascade Dam and Reservoir. After the dam\nwas completed, the government deeded part of the land back to Charles and Ora, which they\nthereafter held as community property. The area soon began developing into a location for\nsummer homes, enhancing the economic potential of the Edwards\' property. In 1964,\nCharles, Ora, and Frank entered into an agreement (the 1964 Agreement) to develop a\nportion of the land known as the Edwards Ranch Subdivisions I and II. Under the terms of\nthe agreement, Charles and Ora agreed to make these two tracts available for promotion and\nsale, and Frank agreed to make the improvements necessary to develop the property, to\npromote and sell individual lots, and to oversee the performance of sales contracts.\nSpecifically, the agreement recited that Frank promised to proceed with plans to develop the\n... property for purposes of its sale, to construct the necessary roads, ditches and other\nimprovements necessary for the development of the area, and to promote and sell the lots in\nthe two subdivisions. He further agrees to be responsible for the sale of the lots.\nThe parties also agreed that Frank would receive one-half the net profit from each\nlot sold, and that the parties would share expenses equally. The agreement further provided\nthat it was to remain in effect until all the lots were sold, and that its terms would be binding\non the parties\' administrators, executors, and heirs.\nBetween 1964 and 1974, Frank sold all of the lots in the Edwards Ranch Subdivision\nI, and all but eleven of the lots in Edwards Ranch Subdivision II. Frank purchased a\nwaterfront lot in Subdivision II for himself where he built his home. The eleven unsold lots\nlie immediately adjacent to his home, shielding it from some of the other development in the\narea.\nIn March, 1974, Charles Edwards died. With a few exceptions not germane to this\ncase, Charles left his entire estate, which included his one-half interest in his and Ora\'s real\nproperty, in trust for the benefit of Ora and his four then-living grandchildren\xe2\x80\x94Frank\'s four\nolder children: William, Roger, Dawn, and Alexandra, and named Frank as its trustee.\nPursuant to the terms of the testamentary trust (the Trust), Ora received a life interest in the\ntrust income, and upon her death the trust corpus was to be divided among the four\n294\n\n\x0cgrandchildren. The document authorized the trustee to invade the trust corpus as necessary\nto provide for Ora\'s support, maintenance and health. Charles\' will additionally contained\nthe following request:\nAlthough I am not directing the Trustee not to sell this property [the land\nadjacent to the reservoir], I urge that he retain it as long as possible for the\nreason that it will continue to appreciate in value.\nWith the single exception of an offer in 1989\xe2\x80\x94which precipitated this litigation and\nis discussed below\xe2\x80\x94Frank made no attempt to sell any of the remaining lots in Subdivision\nII after 1974. During 1976 and 1977, Frank and Ora discussed developing and selling other\nproperty to fund the Trust, notwithstanding the fact that there remained unsold lots in the\nEdwards Ranch Subdivision II. In April, 1977, Frank and Ora entered into a written contract\n(the 1977 Agreement) to develop and sell lots from a twenty-five acre tract within the\noriginal Edwards property, known as the Margot Subdivision. Ora and the Trust each owned\nan undivided one-half interest in this property. Under the terms of the 1977 Agreement,\nFrank would receive fifty percent of the net profit from each sale, the Trust twenty-five\npercent, and Ora twenty-five percent. Frank executed the agreement in his individual\ncapacity, and also as trustee on behalf of the beneficiaries.\nOra died in July, 1988, terminating the trust. The trust corpus, which included a onehalf interest in the eleven unsold lots in the Edwards Ranch Subdivision II and a one-half\ninterest in the unsold lots remaining in the Margot Subdivision, was distributed directly to\nthe four named grandchildren. In her will, Ora named William, the eldest grandchild, the\npersonal representative of her estate. Over Frank\'s objection, the will was admitted to\nprobate.\nShortly after Ora\'s death, Frank learned that, in 1986, Ora had executed and\nrecorded a document unilaterally renouncing the 1964 Agreement and declaring it to be of\nno further effect. In November, 1989, while the will contest was pending, Rufus and Rona\nGillette offered to buy two of the remaining lots in the Edwards Subdivision II, plus a small\nadditional parcel outside of the subdivision, for $100,000. Frank was willing to make the sale,\nbut when he asked William to proceed with the transaction on behalf of Ora\'s estate, William\nrefused. The family dispute has also prevented the completion of other proposed sales in the\nMargot Subdivision.\n295\n\n\x0cIn February, 1990, Frank filed this action against his children and Ora\'s estate,\nseeking a declaration that the 1964 and 1977 agreements were valid and binding upon all of\nthem, and that Ora\'s unilateral renunciation of the earlier agreement was without effect. The\nthree eldest children, William, Roger and Dawn, filed an answer and counterclaim. They\nadmitted that the 1977 Agreement was still valid and enforceable. They alleged, however,\nthat the 1986 renunciation was a valid exercise of Ora\'s rights, and asked the court to declare\nthe 1964 agreement no longer in effect. Alexandra Edwards filed a separate answer alleging\nthat Frank executed the 1977 Agreement in violation of his duties as trustee, rendering the\nagreement voidable, at least as to her interest.\nWithout ruling on the validity or effect of Ora\'s unilateral renunciation of the 1964\nAgreement, the court concluded that the joint venture had been dissolved, prior to the time\nof the renunciation in 1986, because Frank had willfully and persistently breached his duty to\npromote and sell the remaining lots under the Agreement. In ruling on the enforceability of\nthe 1977 Agreement, the court concluded that, notwithstanding Frank\'s good faith or the\nfairness of the agreement\'s terms, Frank\'s dual role as trustee and developer created an\nimpermissible conflict of interest, and absent Alexandra\'s consent or authorization by a\ncourt, the agreement was voidable as to her interest.\nOn appeal, Frank asserts that the district court erred by finding that his conduct\nconstituted a willful breach of his duties under the 1964 Agreement, and therefore the decree\nof dissolution must be reversed. He also avers that the court erroneously held he had\nbreached his fiduciary duty to Alexandra, and that its declaration that the 1977 Agreement\nwas voidable as to her interest must also be overturned. We will address these issues in turn.\nStandard of Review\nThe role of this Court in reviewing findings of fact is limited. We do not weigh the\nevidence, nor do we substitute our view of the facts for that of the fact finder. Alumet v. Bear\nLawk Grazing Co., 119 Idaho 946, 949, 812 P.2d 253, 256 (1991). Findings made by the trier\nof fact will not be disturbed on appeal unless clearly erroneous. I.R.C.P. 52(a). Findings are\nnot clearly erroneous if they are supported by substantial, even though conflicting, evidence\nin the record. Sun Valley Shamrock v. Travelers Learning, 118 Idaho 116, 118, 794 P.2d 1389,\n1391 (1990). Evidence is \xe2\x80\x9csubstantial\xe2\x80\x9d if a reasonable trier of fact would accept and rely\nupon it in determining whether a disputed point of fact has been proved. Weaver v. Millard,\n296\n\n\x0c120 Idaho 692, 698, 819 P.2d 110, 116 (Ct.App. 1991). However, we freely review any\nstatements of law and the trial court\'s application of the law to the facts properly found. Carr\nv. Carr, 116 Idaho 747, 750, 779 P.2d 422, 425 (Ct.App. 1989).\nDissolution of the Joint Venture\nA joint venture is a relationship analogous to, but not identical with, a partnership.\nBrummet v. Ediger, 106 Idaho 724, 727, 682 P.2d 1271, 1274 (1984); Stearns v. Williams, 72\nIdaho 276, 284-85, 240 P.2d 833, 839 (1952). Accordingly, the law relating to the dissolution\nand termination of partnerships generally applies to joint ventures. See 46 AM JUR.2d Joint\nVentures \xc2\xa7 30, at 51 (1969The Uniform Partnership Act, as adopted in Idaho). , enumerates\nthe legal causes of dissolution. See I.C. \xc2\xa7 53-331. Section 53-331(6) provides for dissolution\nby decree of a court. The grounds upon which a party is entitled to a judicial decree of\ndissolution are set forth in I. C. \xc2\xa7 53-332. Specifically, the court will decree a dissolution\nwhenever a partner willfully or persistently commits a breach of the partnership agreement,\nor otherwise so conducts himself in matters relating to the partnership business that it is not\nreasonably practicable to carry on the business in partnership with him. I. C. \xc2\xa7 53-332(1)(a).\nFrank does not contest the applicability of the Uniform Partnership Act to the issues\npresented. Rather, his appeal challenges the district court\'s finding that he \xe2\x80\x9cwillfully and\npersistently breached his duties under the 1964 agreement to the extent it became totally\nimpracticable to carry on the purpose of the joint adventure\xe2\x80\x94to develop and sell the\nremaining lots in Edwards Subdivision II.\xe2\x80\x9d Frank maintains that the court\'s ultimate finding\nof a willful and persistent breach is premised on two underlying erroneous findings:\n(1) that during the fifteen-year period between 1974 and 1989, Frank did nothing to promote\nor sell the eleven remaining lots under the 1964 Agreement; and (2) that Frank intended to\nuse the lots for his own benefit. He claims that the first finding is clearly erroneous in light\nof evidence that he staked lots, graded a road, and orally listed the lots with realtors in the\narea. However, it does not appear from the record that these efforts to improve and\npromote the lots took place after 1974. Furthermore, the record indicates that Frank failed\nto establish any road to some of the lots as required by the original plat. The record also\nindicates that two realtors with whom Frank had listed other Edwards properties did not\nknow that the lots adjacent to Frank\'s home were for sale. According to Frank\'s own\ntestimony, the eleven remaining lots were not advertised after 1974. Frank also argues that\n297\n\n\x0cseptic tank restrictions imposed in 1970 and 1972 impeded the further sale of lots in the\nEdwards Ranch Subdivision II. Notwithstanding the imposition of the sewage covenants,\nhowever, Frank was able to purchase for himself a lot in that subdivision, and to sell another\nlot in 1974, and to attempt to sell the two lots to the Gillettes in 1989.\nFrank argues that his inactivity was justified because it furthered the parties\' profit\nmotive and his father\'s will that he \xe2\x80\x9cretain the property as long as possible for the reason\nthat it will continue to appreciate in value.\xe2\x80\x9d Admittedly, the property had increased in value.\nHowever, the trial judge considered Frank\'s explanation and the evidence supporting it, but\nultimately rejected it, being persuaded that \xe2\x80\x9cthe most reasonable and rational explanation for\nFrank\'s lack of effort on behalf of the joint adventure is that he intended to use the lots for\nhis own benefit, to provide a buffer zone between his own house and other residences.\xe2\x80\x9d\nThis finding is supported by evidence of Frank\'s active development of other Edwards\nproperty around the reservoir, most notably, the lots in the Margot Subdivision. As Frank\nacknowledges, the provision in his father\'s will applied to all of the Edwards property near\nthe reservoir, including lots in the Margot Subdivision. Furthermore, the evidence indicates\nthat Frank proposed the development of the Margot Subdivision in 1977 after telling his\nmother there were no more lots left to sell, even though the eleven lots next to his own\nhome remained unsold. The district court also heard testimony from Frank\'s former wife,\nwho had lived with him at Edwards Ranch Subdivision II from the time their house was\nbuilt in 1972 until 1988. According to her, Frank was not inclined to develop the\nsurrounding lots and he told her he wanted to preserve his privacy from neighbors.\nWe conclude that the record contains ample evidence, even if conflicting, to support\nthe district court\'s finding that Frank\'s fifteen years\' inaction under the 1964 Agreement\nconstituted a willful and persistent breach of his duties. Accordingly, the district court\'s\ndeclaration that the joint venture was dissolved as a result of Frank\'s conduct is affirmed.\n[9][10] As a final note on the subject, we mention that the effective date of a\ndissolution is the date of the first effective act of dissolution; subsequent acts or causes of\ndissolution are irrelevant. See 59A AMJUR2D Partnership \xc2\xa7 814, at 638 (1987). Thus,\nalthough a dissolution by judicial decree generally dates from the date of the court decree,\nthe date of dissolution may be deemed to have occurred earlier, where, as here, the\npartnership is dissolved on the basis of findings that relate back to a prior date. 59A\n298\n\n\x0cAMJUR2D Partnership \xc2\xa7 881-883, at 670-71. In view of the court\'s finding that Frank\'s\nwillful and persistent breach predated Ora\'s 1986 renunciation, the renunciation was a\nsuperfluous act, and a ruling on its validity or effect was unnecessary.\nThe 1977 Agreement\n[11] Next, we turn to the declaration that the 1977 Agreement was voidable as to\nAlexandra. Frank seeks to overturn this decision, arguing that the court erroneously held that\nhis execution of the agreement violated his fiduciary duty of loyalty. As noted above, Frank\ncontracted to develop the Margot Subdivision\xe2\x80\x94property owned jointly by Ora Edwards and\nthe Trust. Under the terms of the agreement he was to receive fifty percent of the net profit\nfrom all sales. Frank entered into the agreement on his own behalf and also as trustee on\nbehalf of the Trust\'s beneficiaries. Alexandra Edwards, a beneficiary of the Trust and still a\nminor in 1977, never consented to the agreement at the time of its making, nor has she\nratified it subsequently. These facts are not disputed.\nAlthough Frank acknowledges that his dual role as trustee and developer generally\nwould create a conflict of interest, he argues that under the circumstances, the fact that he\nplaced himself in a position of potentially conflicting loyalties did not constitute a breach of\nhis fiduciary duty to the beneficiaries. We disagree.\nThe Uniform Trustees\' Powers Act, I .C. \xc2\xa7 68-104 through 68-113 describes the\npowers that may be exercised by a trustee. The Act specifically recognizes the trustee\'s\npowers to invest the trust assets and to develop, improve and convey them. See I .C. \xc2\xa7 68106(c). However, these powers are expressly made subject to the trustee\'s duty to act with\ndue regard to his or her obligation as a fiduciary. I .C. \xc2\xa7 68-106(b). Although the obligations\nof a fiduciary are not enumerated in the statute, they are well established in the law. Often\ndeemed its first duty, the trustee owes a duty of loyalty\nThe trustee owes a duty to the beneficiary to administer the trust in the interest of\nthe beneficiaries alone, and to exclude from consideration his own advantages and the\nwelfare of third persons. This duty is called the duty of loyalty. If the trustee engages in a\ndisloyal transaction, the beneficiary may secure the aid of equity in avoiding the act of the\ntrustee or obtaining other appropriate relief, regardless of the good faith of the trustee or the effect of\nthe trustee\'s conduct on the beneficiary or benefit to the trustee.\n299\n\n\x0cIn enforcing the duty of loyalty the court is primarily interested in improving trust\nadministration by deterring trustees from getting into positions of conflict of interests, and\nonly secondarily in preventing loss to particular beneficiaries or unjust enrichment of the\ntrustee.\nG.G. Bogert & G.T. BOGERT, Law of Trusts \xc2\xa795 (5th ed. 1973) (emphasis added);\nsee also Restatement (Second) of Trusts \xc2\xa7\xc2\xa7 170, 206 (1959); A. Scott, Abridgment of the Law\nof Trusts \xc2\xa7 170, 1960). \xe2\x80\x9cFidelity in the agent is what is aimed at, and as a means of securing\nit the law will not permit the agent to place himself in a situation in which he may be\ntempted by his own private interest to disregard that of his principal.\xe2\x80\x9d Jensen v. Sidney Stevens\nImplement Co., 36 Idaho 348, 353, 210 P. 1003, 1005 (1922). Furthermore, the Uniform\nTrustees\' Powers Act specifically provides that if the fiduciary duty of the trustee and his\nindividual interest conflict in the exercise of a trust power, the power may be exercised only\nby court authorization. I..C. \xc2\xa7 68-108(b).\nBy contracting to develop and sell the trust property at a profit to himself, Frank\nclearly was not acting for the sole benefit of the trust beneficiaries, but for his own interest\nas well, therefore creating a conflict of interest. Pursuant to the provisions of the Trustees\'\nPowers Act, I..C. \xc2\xa7 68-108(b). Frank was prohibited from entering into the contract without\ncourt authorization. Although Frank admits he never obtained judicial authorization, he\nsuggests that the conflict of interest created here ought to be exempted from his duty of\nloyalty, arguing that his actions were in accord with the presumptive intent of his father, the\ntrust settlor, to develop and sell the properties in order to fund the trust corpus. To support\nhis position, Frank relies on two cases, In re Kellogg\xe2\x80\x99s Trust, 35 Misc.2d 541, 230 N.Y.S.2d 836\n(1962) and In re Steele\xe2\x80\x99s Estate, 377 Pa. 250, 103 A.2d 409 (1954). These cases lend little\nsupport, however, because they present situations in which the trustee\'s conflict of interest\nwas either passive or was the direct creation of the trust settlor. Here, by contrast, Frank\nhimself created the conflict by contracting to develop the trust property at a profit to\nhimself. Although the trust scheme arguably countenanced the development of the trust\nproperties, their development by way of a specific arrangement involving self-dealing was\nneither inherent in the trust scheme nor authorized by the trust instrument. Thus, even if\notherwise applicable in this jurisdiction, the reasoning of the cases cited by Frank is\ninapposite to the factual situation here.\n300\n\n\x0cAs correctly concluded by the district court, Frank executed the 1977 Agreement in\nviolation of his duties as trustee. Because Alexandra had neither consented to the agreement\nat the time nor ratified it since, she was entitled to equitable relief. The judgment declaring\nthe 1977 Agreement voidable as to her interest is, therefore, affirmed.\nCONCLUSION\nThe judgment of the district court declaring the 1964 joint venture dissolved and the\n1977 agreement voidable as to Alexandra is affirmed.\nClass Discussion Tool\nDonald and his wife, Minnie, were in poor health and unable to look after their own\naffairs. In 1970, Donald, then age 82, executed a power of attorney naming his sons, Roy\nand David, as his agent. A few months later, Minnie, age 79, executed her power of attorney\nnaming her sons, Roy and David, as her agent. In 1970, Donald and Minnie owned real and\npersonal property of a value estimated to be between $375,000 and $500,000.\nDuring the following three years, Roy sold his parents\xe2\x80\x99 vacation home for $150,000.\nHe used the money he received from the sale of the home to buy a lake cabin for him and\nhis wife. Further, Roy misappropriated great sums of money from his parents to pay debts\nand living expenses for himself and his family. Roy sold his parents\xe2\x80\x99 art collection to Mystic\nArt Gallery. Stanley, the gallery\xe2\x80\x99s owner thought that the art collection belonged to Roy. Roy\nalso bought a house and gave it to his best friend, Fred, who was having financial problems.\nFred did not know that the house had been purchased with Roy\xe2\x80\x99s parents\xe2\x80\x99 money. David\nsigned off on all of Roy\xe2\x80\x99s actions because he thought they have been approved by his\nparents.\nDonald and Minnie executed a will leaving all of their property in trust for their\ngrandchildren. National Bank was the trustee. After Donald and Minnie died, National Bank\ndiscovered the misappropriations made by Roy. The trustee filed an action against Roy and\nDavid to recover the trust assets. Please analyze all of the relevant legal issues.\n\n301\n\n\x0cChapter 11 - Duty of Impartiality\nMost trustees are accountable to two types of beneficiaries\xe2\x80\x94present and future.\nThe present beneficiary relies on the income from the trust. Typically, the future\nbeneficiaries are paid the principal remaining in the trust after the present beneficiary dies.\nFor instance, O could execute a will containing the following language: \xe2\x80\x9cI leave the residuary\nof my estate in trust for the benefit of my daughter for life. After the death of my daughter,\nthe remaining assets are to be held in trust for my then living grandchildren.\xe2\x80\x9d O\xe2\x80\x99s daughter\nhas a life estate in the first trust; O\xe2\x80\x99s grandchildren have a contingent remainder in the\nsecond trust. The trustee has to make sure that the trust produces enough income to meet\nO\xe2\x80\x99s daughter\xe2\x80\x99s needs. In addition, the trustee has to act to ensure that there will be enough\nmoney left in the trust to create the second trust for O\xe2\x80\x99s grandchildren. There is tension\nbetween the interests of beneficiaries entitled to income and those who may later be entitled\nto the principal. According to the duty of impartiality, a trustee has a duty to deal with both\nthe income beneficiary and the remainderman impartially. Consequently, the trustee must\nmake sure that the trust property produces a reasonable income while being preserved for\nthe remaindermen. In order to accomplish that goal, the trustee must preserve the trust\nproperty and make it productive so he will have the resources to meet the needs of both the\npresent and future beneficiaries. The decision often comes down to investing in incomeproducing property that does not appreciate or investing in property that increases in value\nthat produces little income.\n\nPennsylvania Company For Insurance on Lives and Granting Annuities v. Gilmore,\n43 A.2d 667\nSOOY, Vice Chancellor.\nThis is a bill filed by the trustee of the estate of Frederick Hemsley, deceased, in part\nasking for instructions as to its duty with respect to certain \xe2\x80\x98tax free\xe2\x80\x99 securities held by it in\nits capacity as trustee.\nThe bill was filed May 15, 1944, final hearing was held on December, 6, 1944, and\nfinal briefs on July 2, 1945. This history of the litigation is not intended as showing any lack\nof diligence on the part of the litigants under the circumstances of this case but to make\n302\n\n\x0crecord of the fact that there has been no delay on the part of the Court.\nThat which gives rise to the request for instructions by the trustee is the question as\nto whether it should sell all or part of certain \xe2\x80\x98tax exempt\xe2\x80\x99 securities now held by it as a part\nof the residuary trust in its hands for a \xe2\x80\x98profit\xe2\x80\x99 of approximately $212,381.25 over par, and\nalso certain Government Bonds which are partially tax exempt on which there is a profit of\napproximately $19,000 over par. These securities constitute somewhat over 50% of the\noriginal \xe2\x80\x98residuary\xe2\x80\x99 trust estate, which aggregated $3,075,000.\nThis Court uses values that were fixed as of November 27, 1944 but it is conceded\nthat any variances which have or will result is of small importance \xe2\x80\x98because the Court is\nasked to adjudicate upon policy and not upon precision and upon the effect generally upon\nthe life tenants and the remaindermen respectively and not upon the precise dollars which\neither will gain or lose.\xe2\x80\x99\nWhile this Court is not called upon to execute the trustee\'s discretion (3 Bogert on\nTrusts and Trustees \xc2\xa7 559, page 1787), it would seem that on the facts presented herein the\ntrustee was amply justified in asking for the Court\'s aid. The trustee had advised the life\ntenants and vested remaindermen of the possibility of the sale of the tax exempts at a price\nwhich would augment the corpus of the trust fund and the life tenants and vested\nremaindermen objected to such a sale. The contingent remaindermen are infants and not in\nposition to voice their wishes. The trustee was in duty bound to consider the interests of\nthese minors and the only avenue for a full and fair determination of the question was the\nfiling of the bill and the appointment of the guardian and counsel to represent the infants,\nwith the resultant decree as to the rights of all parties. This course has not been resisted by\nthe life tenants or remaindermen and the guardian ad litem for the infants has requested the\nCourt\'s determination, and the Court having assumed jurisdiction without objection, should\nbe very hesitant of its own motion to deny the trustee the protection a decree will afford on\na question which the trustee could not answer in safety.\nIt is argued by counsel for the life tenants and vested remaindermen that the position\nof the trustee is that of stakeholder and that it has assumed the attitude of a champion for\nthe sale of the tax exempts. I do not so find. True, it has presented its approach to the\nsolution of the problem and the result of its consideration of that problem, but in so doing\nhas only given to the Court the benefit of the picture as it sees it, conceding at the same time\n303\n\n\x0cthat there is another side to that picture which it leaves for the Court to determine. This is\nthe proper procedure and it would be improper for the trustee to supinely submit to a decree\nat the dictation of some of its cestuis.\nTestator died March 15, 1915, leaving a will dated January 12, 1905, with 2 codicils\ndated respectively February 20, 1911 and February 11, 1914. Decedent, by his will and\ncodicils, created 5 separate trusts but the only one we are now considering is that\ndenominated by the parties as the \xe2\x80\x98residuary trust,\xe2\x80\x99 with assets amounting to $3,075,000 at its\ninception, which was in the form of cash received by the trustee from the executors of the\nestate over a period from 1919 to 1928. This residuary trust, as provided by the decedent,\ngave a life estate of two-thirds of the income to the widow, Mrs. Hemsley, and as to onethird of the income, to decedent\'s only child, Mrs. Gillmore. On Mrs. Hemsley\'s death her\ntwo-thirds of the income passes to Mrs. Gillmore and on the death of Mrs. Gillmore and\nMrs. Hemsley the entire principal of the trust vests in Mrs. Gillmore\'s children equally, if\nliving, the issue of any deceased child to take per stirpes. These great grandchildren of\ntestator are herein referred to as contingent remaindermen. It should be here noted that\nunder the terms of the will the vesting in the children of Mrs. Gillmore is determined by the\nmother\'s death, so that if she predeceased Mrs. Hemsley her children\'s interest becomes\nabsolute even though the question of the quantum of that interest will be later increased by\nthe death of the grandmother, Mrs. Hemsley.\nMrs. Hemsley (87 years of age) and Mrs. Gillmore (60 years of age) are living. Mrs.\nGillmore has 3 children, all of whom are of full age.\nIt thus appears that the parties in interest are first, the life tenants, secondly, the\nvested remaindermen, they being the living children of Mrs. Gillmore, and thirdly, the issue\nof the grandchildren, the contingent remaindermen. In other words, the interest of the great\ngrandchildren of decedent is conditioned upon their parent predeceasing Mrs. Gillmore. The\ngreat grandchildren are a minor child of testator\'s grandson, born June 2, 1936; another\ngrandchild has 2 children, a minor son born July 7, 1931 and a minor daughter born May 22,\n1933; and another grandchild has 2 children, a minor daughter born February 12, 1940, and\nanother minor daughter born August 19, 1942. These 5 minor children, the contingent\nremaindermen of the residuary estate, were represented at the final hearing by guardian ad\nlitem duly appointed by this Court, as well as by counsel also so appointed.\n304\n\n\x0cThe life tenants, Mrs. Hemsley and Mrs. Gillmore, as well as the remaindermen, the\nadult children of Mrs. Gillmore, protest against the sale of any of the securities in question.\nCounsel for the infant contingent remaindermen says: \xe2\x80\x98If the reinvestment of the moneys\nsecured from such a sale is limited to the purchase of new U. S. Government securities then\nthis respondent can offer no objection on behalf of the infant defendants who are\ncontingent remaindermen since the security of the corpus has not been lessened. Neither can\nthis respondent object to the reinvestment of said moneys at a later date in municipal\nsecurities provided said municipal bonds are of equal security with those now held. * * * It is\nthe opinion and contention of the Guardian ad litem for the aforesaid contingent\nremaindermen that the Court should follow the line of conduct expressed in the above cited\ncase of Bliss v. Bliss, 126 N.J.Eq. 308, 8 A.2d 705[706], \xe2\x80\x98It is the duty of the court to protect\nthe remaindermen as well as the life beneficiary [under a trust.] Such is also the duty of the\ntrustees. It is not the province of [the Court of Chancery] to allow trustees to speculate in\nstocks which might result in a loss to the remaindermen,\xe2\x80\x99 and should not by its order lend its\naid to the trustee in speculating in stocks which might result in a loss to the contingent\nremaindermen but should, if such order is entered, instruct the complainant to confine its\ninvestments to investments having equal security with these that complainant now holds.\'\nThe basis for the position of the life tenants and vested remaindermen is generally\nthat the requested sale of the tax exempt securities would discriminate against and result in\ngreat loss of income to them and that it would also eventually depreciate the value of the\ncorpus.\nIt may be well, before considering the evidence adduced at final hearing, to note the\napplicable law.\nBoth sides agree that the rule is correctly set up in Section 232 of the Restatement of\nthe Law of Trusts, as well as comments following that rule:\n\xe2\x80\x98If a trust is created for beneficiaries in succession, the trustee is under a duty\nto the successive beneficiaries to act with due regard to their respective\ninterests.\n\xe2\x80\x98If by the term of a trust the trustee is directed to pay the income to a\nbeneficiary during a designated period and at the expiration of the period to\n305\n\n\x0cpay the principal to another beneficiary, the trustee is under a duty to the\nformer beneficiary to take care not merely to preserve the trust property but\nto make it productive so that a reasonable income will be available to him,\nand he is under a duty to the latter beneficiary to take care to preserve the\ntrust property for him.\n\xe2\x80\x98Although the trustee is not under a duty to the beneficiary entitled to the\nincome to endanger the safety of the principal in order to produce a large\nincome, he is under a duty to him not to sacrifice income for the purpose of\nincreasing the value of the principal.\xe2\x80\x99\nProfessor Bogert, in his work on Trust and Trustees, Vol. 4, \xc2\xa7 801, says:\n\xe2\x80\x98The trustee who holds for successive beneficiaries owes a duty to them to\nconduct the trust with equal consideration for the interests of all the\nbeneficiaries. He should not unnecessarily show a preference either for the\npresent cestuis or those who are to take income or capital later. * * * \xe2\x80\x98A\ntrustee has no right to take sides as between the life tenants and\nremaindermen. If he has an election of taking one of several courses, he must\ntake, if possible, that which will not benefit one at the expense of the other.\xe2\x80\x99\'\nProfessor Pomeroy, 4th Edition, Vol. 3, Sec. 1071, says:\n\xe2\x80\x98It is the trustee\'s duty to use diligence in investing the trust property so that\nit may produce as much income as possible, and also to use care and\nprudence in investing it in such securities as will render its loss highly\nimprobable, even if not virtually impossible.\xe2\x80\x99\nAnd again in Section 1072:\n\xe2\x80\x98It is the trustee\'s imperative duty to render the trust property as productive\nas possible consistent with its security and with the demands of ordinary\nbusiness prudence and judgment.\xe2\x80\x99\nReference is also made to Restatement of the Law of Trusts, Section 227, , pages 651 and\n652.\nIn McCracken v. Gulick, 92 N.J.Eq. 214, 112 A. 317, Mr. Justice Swayze said:\n306\n\n\x0c\xe2\x80\x98The fundamental principle is to carry out the intent of the testator. Clearly\nwhen he has created a trust fund and directed that the income be paid a\nbeneficiary for life, he *57 intends to secure that income to the life tenant;\nthat is the very object of the fund.\xe2\x80\x99\n\xe2\x80\x98To withhold all dividends would strengthen the corpus of the estate, but the\ntestator can hardly mean to starve the life tenant for the benefit of\nremaindermen, whom he often has never seen.\xe2\x80\x99\nThe McCracken case was followed by Graves v. Graves, 115 N.J.Eq. 547, 171 A. 681\nand reference is also made to National Newark & Essex Banking Co. v. Work, 109 N.J.Eq. 468,\n158 A. 109, 110::\n\xe2\x80\x98There is another phase of this matter which should be borne in mind, that is,\nthe intent of the testator. I have no doubt that he wished his children to\nenjoy a reasonable income during their lives. His grandchildren, the\nremaindermen, some of whom were not in existence when the will was\ndrawn, could not have interested him particularly. * * * To hold the entire\nproceeds of the Meadowbrook income would prevent his children from\nliving in the manner to which they have always been accustomed, and\ndeprive them of the ability to care for their own children, the remaindermen,\nduring their minority; and I believe would defeat the intent of the testator as\nI gather it from the will. The trustees admit such a construction would be a\nhardship upon the life tenants.\xe2\x80\x99\n\xe2\x80\x98My conclusion is that the dividends which were received by the testator\nthrough Meadowbrook be considered as income and paid to the life tenants.\nIf it be true that this procedure will deplete the estate, it is unfortunate, but it\nis no concern of this court. The testator clearly desired his children to enjoy a\nproper income, and it is no fault of any one, if, in the problematical future,\nthis income diminishes or ceases.\xe2\x80\x99\nIf it were possible to gather testator\'s intent as to the solution of the problem before\nthe Court from the context of the will and codicils the result would be a decree in\nconformity therewith. But the Court is not permitted to speculate as to what testator would\n307\n\n\x0cdo were he confronted with these problems. The question of intent must be answered by the\nlanguage used by testator, but it is obvious that in 1905, 1911 and 1914 testator was not\ncontemplating a situation brought about by conditions all of which arose long after these\nyears. At the time of his death income taxes had been imposed, it is true, but these taxes\nfinanced necessities of the Government as they then existed and these necessities had not\nbrought about the high income tax impost of later years. Since the making of the will and\ncodicils and testator\'s death the depression of the late 20s and early 30s and 2 World Wars\nhave ensued. All we gather from a reading of the will is that testator\'s first consideration was\nfor his widow and daughter. He evidently desired them to have an income befitting the\nmanner and style of living to which they were accustomed. To accomplish this he devoted a\ngreater portion of his entire estate, giving them an income amply sufficient. His\ngrandchildren were a secondary consideration. He did not, until 1914, create any separate\ntrust for them. He made them remaindermen after the life estates. But as conditions were at\nthe time of the execution of the will and codicils and at the time of Mr. Hemsley\'s death, he\nhad a right to believe and evidently did, that he had amply provided for his widow and\ndaughter for their lives and for his grandchildren thereafter, and under certain contingencies,\nhis great grandchildren.\nThe trustee rightfully says that testator\'s choice of the life tenants as the main object\nof his bounty cannot be urged as evidence that he intended \xe2\x80\x98to extend to them an ease and\ninsurance against conditions which he could not have visualized or contemplated at the time\nhe made his will and codicils.\xe2\x80\x99\nThe question before the Court must therefore be decided on its legal aspects and the\nquestion is, what is the duty of the trustee of this residuary trust? That duty, as laid down in\nthe Restatement of the Law of Trusts, is \xe2\x80\x98to deal impartially\xe2\x80\x99 as between the successive\nbeneficiaries, and to act \xe2\x80\x98with due regard to their respective interests.\xe2\x80\x99 To accomplish this\nresult where, as in this case, the trustee is directed to pay income for life to one set of\nbeneficiaries and at the end of that period pay over the principal to the remaindermen, \xe2\x80\x98the\ntrustee is under a duty\xe2\x80\x99 to the life tenants \xe2\x80\x98to take care not merely to preserve the trust\nproperty but to make it productive so that a reasonable income will be available for the life\ntenants,\xe2\x80\x99 and it is under a duty to the remaindermen to \xe2\x80\x98take care to * preserve the trust\nproperty for them.\xe2\x80\x99 The trustee \xe2\x80\x98is not under a duty to the life tenants to endanger the safety\n308\n\n\x0cof the principal in order to produce a larger income,\xe2\x80\x99 but he is under a duty \xe2\x80\x98not to sacrifice\nincome for the purpose of increasing the value of the principal.\xe2\x80\x99\nI think it is generally conceded that a sale of the tax exempts and the purchase of 2%\nGovernments, as contemplated by the trustee, would not endanger or in any way jeopardize\nthe value of the trust estate.\nWould the plan of sale of tax exempts sacrifice income? It will be demonstrated\nhereafter that the loss of income to the life tenants would be great and that it would also be\ndetrimental to the interests of the vested remaindermen.\nThe duty of the trustee, as I see it, is to act with due regard to the respective interests\nof the successive beneficiaries, to deal impartially as between them. To do this, it seems to\nme, requires the trustee to view the overall picture as it is presented from all the facts, and\nnot close its eyes to any relevant facts which might result in an excessive burden to the one\nclass in preference to the other. To say the trustee may blind itself to the fact that the\nincome of the life tenants bring them within the high brackets of income tax payments\nwould be unjust. That fact must be taken into consideration with all other facts and with\nthem in view, the question of fairness must be answered. The trustee also has a duty to see\nthat the increase to corpus goes to the contingent remaindermen who may never take, and\nwhile the interest of these contingent remaindermen must be zealously guarded, the trustee\'s\nduty to the life tenants may not be served by saying-we have nothing to do with the question\nof income tax and its effect on your interest as life tenants if the sale is made-nor may the\ntrustee say that the income remaining after the payment of tax if the tax exempts are sold is\nsufficient for your needs. It is the duty of the trustee to return the highest income to the life\ntenants consistent with the safety of the corpus, and not an income which the trustee may\ndeem to be sufficient for their purposes.\nIt is said by counsel for the trustee, \xe2\x80\x98if income changes impose new burdens they\nshould be shared proportionately and not added expense for the one for the alleviation of\nthe others.\xe2\x80\x99 If the sale is made of the tax exempts the benefit is an increase of corpus for the\ncontingent remaindermen and not for the benefit of the life tenants. The sale would be to\nthe sole detriment of that life tenants and vested remaindermen, with no benefit to them at\nall, and all benefit to the contingent remaindermen.\n\n309\n\n\x0cThe trustee, as well as the life tenants and the guardian ad litem, each produced\nexperts to testify as to their opinion as to the propriety of the sale of the whole or a part of\nthe tax exempts. Each one of these expert witnesses are men of ability, integrity and wide\nexperience and each gave his expert opinion from his own individual standpoint and\nexperience.\nThe trustee\'s investment officer on trusts, Mr. Ashbridge, disclosed that it was his\nopinion that a sale should be had. Mr. Boyd, for the trustee, advocates a sale and\nreinvestment in 2% Government Bonds for a period of time and then a sale of the 2%\nBonds and reinvestment in new municipal tax exempts as opportunity offers. Mr. Boyd did\nexclude from the sale tax exempts of very short maturity. He said, however, that he was not\nconsidering the duty of the trustee toward the life tenants insofar as protection of income\nwas concerned. Mr. Collings, for the guardian ad litem, was of the opinion that it was unwise\nto sell. He was viewing the matter more from the interest of the life tenants. He said,\nhowever, disregarding the life tenants\' interests and only considering the remainder interest,\na sale should be had. The final question to Mr. Collings was: \xe2\x80\x98Now having in mind the life\ntenants\' interest, also having in mind the remainder interest, are you able to form a judgment\nas to whether the plan is good or not?\xe2\x80\x99 Answer: \xe2\x80\x98If you consider both interests then I think I\nwouldn\'t sell the bonds.\xe2\x80\x99 Mr. Brombach for the life tenants and remaindermen, from whose\ntestimony the result of the sale of the interest of the life tenants and remaindermen is taken,\nthough it unwise to sell. General Gillmore for the life tenants and vested remaindermen\nlikewise thought it unwise to sell.\nFrom the above very sketchy reference to the evidence adduced at final hearing it\nwould seem that the Court has before it the testimony of men of wide experience in the\nfinancial world and that there is a divergence in the opinion arrived at by these experts, and\nthat that divergence might be said to leave the weight of the expert testimony in equipoise. I\nthink it may be fairly said, however, that if the client of any one of these experts happened to\nbe an individual seeking advice from the standpoint of an investor of his own funds that the\nanswer would have been a unanimous opinion that the tax exempts should be sold, this\ndepending, of course, on the income bracket of the individual investor who might be seeking\nadvice. I think it may also be said that the testimony of the experts, in some instances at\nleast, displayed a failure to comprehend the trust aspect involved in the question, to the\n310\n\n\x0cextent that it was necessarily involved for a fair solution as between the divergent interests of\nthe life tenants and remaindermen to those interests of the contingent remaindermen.\nCounsel for the life tenants and vested remaindermen have attached to their brief\ntables to show the result of a sale of all or half of the tax exempts on the life tenants during\ntheir joint lives, and also on Mrs. Gillmore in the event she survives her mother, which\ntables, generally speaking, show, as stated by counsel, \xe2\x80\x98that if the sales are made on the basis\nas requested in the bill of complaint, and then reinvested on a 2% basis as now suggested,\nMrs. Hemsley will sustain a 58% loss in her retained income after payment of income tax;\nMrs. Gillmore will sustain a 46% loss, and in the event of Mrs. Hemsley\'s death, Mrs.\nGillmore\'s loss would soar to 64%. The comparable figures, if only one-half were sold as\nsuggested at the hearing, would be a 28% loss for Mrs. Hemsley; a 22% loss for Mrs.\nGillmore and a 31% loss for Mrs. Gillmore following Mrs. Hemsley\'s death.\xe2\x80\x99 These figures,\naccording to counsel, were on the basis of data produced at the time of the hearings and are\nnot necessarily the correct percentages as of the date of the filing of briefs. However, it is\nsuggested that the percentages will not very materially change.\nCounsel for the defendants concede that as the tax exempts mature, and assuming\nthat it is impossible to replace them with new and comparable tax exempts, the foregoing\npercentages will change, but alleges that allowing for maturities at the earliest possible dates\non the various tax exempt issues, a sale at the present time would, at the end of 5 years,\nresult in a loss of approximately $210,000 of tax free income to the life tenants, and at the\nend of a 10 year period a loss of approximately $366,000 of such tax free income. These are\nminimum figures, assuming payment at the earliest possible maturity dates of the bonds, and\nit is alleged that there would be a substantial loss to the 3 grandchildren, but at a greatly\nreduced percentage because these grandchildren are in lower tax brackets.\nWe have before us a picture where if all tax exempts are sold a profit over cost of\napproximately $231,000 or a premium over par of over approximately $240,000 may be\ngained, which will be added to the corpus of the trust. Such gain, of course, would be subject\nto reduction by capital gain tax. This profit would be added to the corpus and be invested so\nthat the annual income yield would be less than if they were not sold. If sold, we have as\nheretofore set forth, a very substantial shrinkage of the yearly income of the life tenants and\na smaller reduction as to the vested remaindermen. From this it is obvious that considering\n311\n\n\x0cthe interest of these two classes of beneficiaries alone, a sale of the tax exempts should not\nbe made. We can readily see that the beneficiaries of the result of the sale will be the\ncontingent remaindermen by the increase of corpus. The result of a sale, insofar as these\ncontingent remaindermen are concerned, considered alone, would be for their best interest.\nBut the proposed plan of sale and repurchase of other securities out of the proceeds of sale\nwill not add to the security of the corpus as it now exists. These tax exempts are \xe2\x80\x98blue chip\xe2\x80\x99\ninvestments and while the contemplated purchase of bonds to replace those sold carries with\nit the intent to purchase Government securities of like character, there may arise a\ncontingency not now foreseen which would render these repurchased bonds less desirable,\nand the duty of the trustee of the contingent remaindermen does not carry with it a\nrequirement that the corpus be augmented unless that result may be accomplished in fairness\nto the interest of the life tenants and vested remaindermen. It is, of course, plainly the duty\nof the trustee to in no wise speculate with the trust funds.\nIn view of the facts as the Court sees them, as heretofore outlined, the instructions\nto the trustee will be that it is not its duty to sell all or any part of the securities herein\nreferred to as tax exempts in order that it may capture for the corpus of the residuary trust\nthe profit now realizable upon said municipal and Government bonds.\n\nSturgis v. Stinson, 404 S.E.2d 56\nLACY, Justice.\nIn this will construction case, we determine whether the testator placed restrictions\non the amount of income which the income beneficiary was to receive and, if not, whether\nthe executor was required to administer the assets of the trust created by the will in a manner\nwhich did not discriminate between successive beneficiaries and which produced a\nreasonable level of income in relation to the value of the trust assets.\nDr. William J. Sturgis, Jr., died testate in 1986, leaving an estate valued at $1,140,462\nconsisting of an automobile, approximately $300,000 in various stocks and bonds, and two\nparcels of real estate-Bush Hill Farm (the farm), valued in the estate inventory at $708,500,\nand a one-third undivided interest in another parcel of land with a value of $126,000. His will\nprovided that his widow, Anne Sturgis, receive all the income from his estate for her lifetime.\nAt her death, or if she were to renounce the income, the residue of the estate was to pass to\n312\n\n\x0chis children, Susan Sturgis Stinson and Christopher S. Sturgis (the remaindermen).\nThe testator named his wife and Robert C. Oliver, Jr., as co-executors. Upon the\nwife\'s election not to serve, Oliver qualified as executor of the estate. In 1989, he filed a bill\nof complaint stating that the income beneficiary, Mrs. Sturgis, had complained that \xe2\x80\x9cthe\nincome derived from the estate is insufficient based upon the value of the assets of the\nestate\xe2\x80\x9d and asked that property of the trust be sold and so reinvested as to derive greater\nincome. The remaindermen opposed the sale of the property and maintained that the trust\nassets could not be sold without their consent. The executor sought the guidance of the\nchancellor.\nAfter an ore tenus hearing, the court entered a final decree holding that the will\n\xe2\x80\x9ccreated a trust;\xe2\x80\x9d that the executor had the obligation to deliver all the net income of the\ntrust to Mrs. Sturgis and to invade the trust corpus when he determined the income\ntherefrom was insufficient to meet the needs of the income beneficiary; that the executor\nhad the \xe2\x80\x9cauthority, but not the obligation, to convert assets of the estate ... including real\nestate, to forms other than those in which he received them, so long as he behaves\nconsistently with the \xe2\x80\x98prudent man\xe2\x80\x99 rule;\xe2\x80\x9d and that the executor \xe2\x80\x9chas performed properly\nunder the terms of the will.\xe2\x80\x9d We awarded Mrs. Sturgis, the income beneficiary, an appeal\nfrom this decree.\nThe primary controversy here revolves around a single, but valuable, asset of the\ntrust-Bush Hill Farm. This farm constitutes approximately 75% of the corpus of the trust\nand, at the time of trial, had a fair market value of $1.5 million. The maximum annual net\nincome generated by this asset and paid to Mrs. Sturgis was $1,265.99 in 1988.\nMrs. Sturgis asserts that this return on the property, representing eighty-four onethousandths of one percent of its fair market value, classifies this property as an\nunproductive asset and that, under general trust principles, the executor has an obligation to\nsell it and reinvest the proceeds. The executor and remaindermen contest Mrs. Sturgis\'\nassertion that selling the farm is required in this case.\nUnder general trust law principles, where, as here, a trust is created for successive\nbeneficiaries, the trustee has a duty to * deal impartially with them. Shriner\xe2\x80\x99s Hospitals v. Smith,\n328 Va. 708, 710, 385 S.W.2d 617, 618 (1989); Patterson v. Old Dominion Trust Co., 139 Va.\n313\n\n\x0c246, 257, 123 S.E. 549, 552 (1924). The parties agree that the executor\'s duties in relation to\ntrust assets set out in the Restatement (Second) of Trusts embody sound and appropriate\nprinciples:\nThe trustee is under a duty to the beneficiary to use reasonable care and skill to make\nthe trust property productive. Restatement (Second) of Trusts Code \xc2\xa7 181 (1959).\nUnless it is otherwise provided by the terms of the trust, if property held in trust to\npay the income to a beneficiary for a designated period and thereafter to pay the principal to\nanother beneficiary produces no income or an income substantially less than the current rate\nof return on trust investments, and is likely to continue unproductive or under-productive,\nthe trustee is under a duty to the beneficiary entitled to the income to sell such property\nwithin a reasonable time. Id. at \xc2\xa7 240.\nThe executor and remaindermen assert that the trial court was correct in declining to\napply these principles and require sale of the farm because the disposition and management\nof the farm and other trust assets were \xe2\x80\x9cotherwise provided by the terms of the\xe2\x80\x9d will. The\nremaindermen argue** that the testator intended that the farm not be sold unless necessary\nto meet the needs of the income beneficiary. The executor argues that as long as the income\nbeneficiary is receiving income sufficient to meet her needs, his discretion as to the\nmanagement of trust assets should not be disturbed.\nIn contrast, Mrs. Sturgis argues that the will places no condition or limitation on the\namount of income she is to receive and contains nothing to support the inference drawn by\nthe chancellor that the testator wished to retain the farm as a family heritage.\nResolution of the dispute rests upon the testator\'s intention as reflected in the will.\nThe chancellor held that Mrs. Sturgis was entitled to \xe2\x80\x9call net income of the trust,\xe2\x80\x9d but he\nalso found that the testator intended that she receive income necessary to provide her with\n\xe2\x80\x9ccomfortable maintenance and welfare according to her standard of living.\xe2\x80\x9d Therefore, the\ntrial court concluded, in effect, that the executor was not required to manage the trust assets\nin a manner designed to provide income in excess of that amount.\nAs a general rule, the factual determinations of the trial court are accorded\nsubstantial deference on review and will be reversed only if plainly wrong or without\nevidence to support them. However, that standard is inapplicable here because the trial\n314\n\n\x0ccourt\'s conclusions regarding the testator\'s intent and its construction of the will were\nopinions based solely on the will, and on testimonial evidence and other documents not in\nmaterial conflict. Hankerson v. Moody, 229 Va. 270, 274, 329 S.E.2d 791, 794 (1985); Durrette v.\nDurrette, 233 Va. 328, 332, 288 S.E.2d 432, 434 (1982); Rinehart & Dennis Co. v. McArthur, 123\nVa. 556, 567, 96 S.E. 829, 833 (1918). We begin our review by examining the relevant\nportions of the will.\nParagraph Four of the will consists of three sections. The first declares that Mrs.\nSturgis is to receive \xe2\x80\x9c[a]ll of the income of my estate, of every nature and wheresoever\nsituate,\xe2\x80\x9d during her lifetime.\nThe second section of Paragraph Four provides that:\nIf at any time, ... in the opinion of my Co-Executor, ... the income of\nmy estate together with such other income available to my wife is\ninsufficient to meet any unusual expense ... or to provide for her\ncomfortable maintenance and welfare, then such Co-Executor may\npay to my wife ... such amounts from the principal or corpus of my\nestate as such Co-Executor deems necessary for such purposes.\nThe final section of Paragraph Four provides that when Mrs. Sturgis dies or \xe2\x80\x9cif she\nshould decide that she has no need for such income\xe2\x80\x9d the estate devolves upon Christopher\nSturgis and Susan Stinson.\nParagraph Six provides in pertinent part:\nIt is my will, and I direct that my Executors and their successors\nhave, in addition to all other powers granted by law, the powers set\nforth in Section 64.1-57 of the Code of Virginia (1950), as in force on\nthe date of the execution of this will, together with the right to sell,\npledge, or hypothecate real estate and other property.\nContrary to the argument advanced by the executor and the remaindermen, the\nsecond section of Paragraph Four imposes no limitation on the first section of that\nparagraph. Indeed, the second section confers a separate benefit upon the widow; in the\nevent the income otherwise available to her \xe2\x80\x9cis insufficient to meet any unusual expense ...\nor to provide for her comfortable maintenance and welfare,\xe2\x80\x9d the executor is empowered to\n315\n\n\x0cinvade and deplete the corpus of the trust for her benefit. Consideration of the widow\'s need\nis of concern to the executor and a precondition to his actions only for depletion of the trust\ncorpus. The power to deplete the corpus for that purpose is irrelevant to the issues framed\nin this appeal.\nThe power of the executor to convert and reinvest corpus assets is granted by\nParagraph Six, in which the executor is given the right to dispose of property and to exercise\nall powers and rights afforded a fiduciary under general law and as set forth in Code \xc2\xa7 64-157. The will does not specify any criteria of need or other preconditions for the executor\'s\nexercise of these powers. Nor is there any indication that the income beneficiary would\nreceive anything less than all the net income, regardless of amount, and irrespective of need,\ngenerated from the executor\'s exercise of his investment and management authority.\nThis interpretation is consistent with certain actions of the executor. As he testified,\nhe had converted a number of the stocks in the trust corpus to investments that generated\nmore income, including some stocks which would have appreciated in value but which did\nnot generate much income. His conversion of the trust corpus was not limited to\npersonality; the executor had also agreed to the sale of a portion of the real estate in which\nthe trust held a one-third undivided interest. There is no indication in the record that the\nexecutor sought the remaindermen\'s consent for this sale, that the conversion was required\ndue to Mrs. Sturgis\' unusual expenses, or that the payment to Mrs. Sturgis of the income the\nnew assets produced was based on the executor\'s determination of her need.\nFurthermore, there is nothing in the will or the record to suggest that the executor\nwas required to treat Bush Hill Farm in a different manner than other trust assets. Although\nthe testator easily could have addressed the disposition of the farm, he did not. Indeed, the\nwill does not even refer to the farm specifically. While Bush Hill Farm had been in the\nSturgis family for many years, neither the remaindermen, Dr. Sturgis, nor his parents had\never lived on the property. The only dwellings on the property were tenant farmers\' shacks\nwhich had burned prior to Dr. Sturgis\' death. This record does not reflect any connection\nthe testator had with this piece of property which would support the conclusion that the\ntestator intended to distinguish its treatment from that to be accorded other real or personal\nproperty in the trust.\nWe conclude, therefore, that the testator intended that Mrs. Sturgis, the income\n316\n\n\x0cbeneficiary, receive unconditionally all the income generated by the trust\'s assets.\nAdditionally, if, in the opinion of the executor, the income from the trust and any other\nincome available to her should become insufficient to meet her needs, the executor would be\nrequired to provide payments to her directly by depleting the corpus of the trust.\nFurthermore, we conclude that the testator did not intend to, and did not, direct or restrict\nthe executor\'s management of the trust\'s assets, including Bush Hill Farm, except as\nprovided under general law.\nWe have not previously addressed the duty of a fiduciary regarding the level of\nproductivity of trust assets in circumstances where there are successive beneficiaries and no\nexplicit instruction by the testator concerning that duty. Cf. Patterson v. Old Dominion Trust Co.,\n149 Va. 597, 612-13, 140 S.E. 810, 814-15 (1927) (explicit instruction). We agree with the\nparties that the trust principles expressed in the Restatement and quoted above are\nappropriate, and we adopt them here.\nExcept for the directive on depletion of the corpus occasioned by Mrs. Sturgis\'\nneeds, the will contains no other directions regarding the management of the trust assets.\nAlthough the management discretion afforded a trustee under the Code of Virginia is\nextensive, see Code \xc2\xa7\xc2\xa7 64-1-57 and 55-253 et seq., that discretion is subject to the\nrequirements of the \xe2\x80\x9cprudent man rule,\xe2\x80\x9d Code \xc2\xa7 26-45.1. The Restatement principles\nadopted above define a trustee\'s obligations under the \xe2\x80\x9cprudent man rule\xe2\x80\x9d regarding\nproductivity of trust assets. These principles are applicable to the executor in this case as the\nreturn generated by Bush Hill Farm is so disproportionate to its value, the farm is rendered\nan unproductive asset.\nIn a second assignment of error, Mrs. Sturgis asserts that the chancellor erred \xe2\x80\x9cby\nfailing to require the Trustee to sell unproductive trust assets and to allocate a portion of the\nproceeds of such sale to the income beneficiary as required by the Uniform Principal and\nIncome Act, Va. Code \xc2\xa7\xc2\xa7 55-253, et seq.\xe2\x80\x9d That Act provides that whenever any asset of a\ntrust, real or personal, is unproductive, the income beneficiary \xe2\x80\x9cshall be entitled to share in\nthe net proceeds received from [conversion of] the property as delayed income.\xe2\x80\x9d Code \xc2\xa7 55263(1). The term \xe2\x80\x9cdelayed income\xe2\x80\x9d is defined as\nthe difference between the net proceeds received from the property and the\namount which, had it been placed at simple interest at the rate of five per\n317\n\n\x0ccentum per annum for the period during which the change was delayed,\nwould have produced the net proceeds at the time of the change....\nCode \xc2\xa7 55-263(2) The period of delay is calculated \xe2\x80\x9cfrom the time when the duty to\nmake [a change] first arose, which shall be presumed, in the absence of evidence to the\ncontrary, to be one year after the trustee first received the property if then unproductive,\notherwise one year after it became unproductive.\xe2\x80\x9d Code \xc2\xa7 55-263(3). We think these\nprinciples are also applicable here.\nWe will reverse the judgment of the trial court and remand the case for further\nproceedings consistent with this opinion, including the allocation to the income beneficiary\nof any delayed income to which she reasonably may be entitled.\nReversed and remanded.\nRUSSELL, Justice, with whom STEPHENSON, Justice, joins, dissenting.\nThe principles of law that govern cases of this kind are well settled: the testator\'s\nintention, if legal and ascertainable, controls. All refinements of the law must yield to the\ntestator\'s power to dispose of his property as he pleases. When this intention is ascertained,\nthe quest is ended and all other rules become immaterial. Picot v. Picot, 237 Va. 686, 689, 379\nS.E.2d 364, 366 (1999) (quoting Wornom v. Hampton B. & A. Inst., 144 Va. 533, 541, 132 S.E.\n344, 347 (1926). In ascertaining the testator\'s intention, the court must examine the will as a\nwhole, giving effect to all its parts if that can be done. Thomas v. Copenhaver, 235 Va. 124, 128,\n365 S.E.2d 760, 763 (1988). The intention to be considered is that which is spoken by the\nwords of the will, not an intention deduced from speculation as to what the testator would\nhave done had he anticipated a change in the circumstances surrounding him *540 at the\ntime of its execution. Christian v. Wilson\xe2\x80\x99s Ex\xe2\x80\x99rs, 153 Va. 614, 632, 151 S.E. 300, 305 (quoting\nCompton v. Rixey\xe2\x80\x99s Ex\xe2\x80\x99ors, 124 Va. 548, 553, 98 S.E. 651, 654 (1919), cert. denied, 282 U.S. 840,\n51 S.Ct. 21, 75 L.Ed. 746 (1930).\nThe will of Dr. Sturgis is unambiguous and his overall intention is clear from its\nwords. He wanted his widow to enjoy all income arising from his estate during her lifetime. If\nshe should experience unusual expenses, or if the income of his estate, together with any\n\xe2\x80\x9cother income available to [his widow]\xe2\x80\x9d should prove insufficient to provide for her\n\xe2\x80\x9ccomfortable maintenance and welfare,\xe2\x80\x9d then the co-executor was authorized to invade the\n318\n\n\x0ccorpus to the extent necessary, in the co-executor\'s discretion, to bring the widow\'s income\nup to that standard. At the widow\'s death, if she should not sooner renounce the income, the\ncorpus of the estate was to pass to his two children. That, in a nutshell, is the intent of Dr.\nSturgis as expressed in his words, and that is the way the trial court construed his will.\nUnfortunately, the majority opinion appears to be based upon the notion that when\nDr. Sturgis wrote paragraph six, he had forgotten paragraph four. The opinion considers the\ntwo provisions in isolation, rather than construing the will as a whole. Indeed, the opinion\ngoes so far as to say that the executor\'s power to invade the corpus \xe2\x80\x9chas nothing whatever to\ndo with the issues framed on this appeal.\xe2\x80\x9d\nWhen Dr. Sturgis executed his will, he knew what his assets were. He knew that\nsome parts of his estate produced substantial income, which would primarily benefit his\nwidow, and that other parts would produce little income, but would constitute a substantial\ninheritance for his children. When he spoke of \xe2\x80\x9cmy estate,\xe2\x80\x9d he necessarily contemplated that\ncombination of income-producing and non-income-producing assets. If he had intended\nthat his executors convert all his assets into investments producing high income, he could\neasily have said so. Rather, he provided that his widow receive \xe2\x80\x9cthe income of my estate.\xe2\x80\x9d\nLand is not fungible. It is idle to speculate as to the testator\'s reason for retaining the\nfarm as a part of his estate, for his children\'s benefit, rather than directing his executors to\nconvert it into income-producing investments. The fact remains, however, that for his own\nreasons, he did so. He could have sold it during his lifetime, as his parents before him might\nhave done, but he did not. Despite its deficiency as a producer of income, the farm was a\npart of the estate which passed under the will and which he contemplated as one of the\nsources of income for his widow.\nConstrued according to the testator\'s clear intentions, the co-executor had authority\nto sell timber from the farm, or to sell or encumber the land, in whole or in part, as might be\nnecessary to maintain the widow comfortably, but not otherwise. That view is reinforced by the\ncircumstances surrounding the testator at the time of execution of his will. Mrs. Sturgis was\nnot the mother of Dr. Sturgis\' children; they were the children of a prior marriage. Mrs.\nSturgis came into the marriage with income-producing assets of her own, and it was not\napparent that it would ever become necessary to invade the corpus to maintain her\ncomfortably. As it turned out, the co-executor determined that she did need additional\n319\n\n\x0cincome by the time this suit was instituted, and the trial court ruled that the co-executor\nshould invade the corpus as necessary for that purpose.\nIn my view, paragraph six of the will merely arms the executors with all the powers\nrequisite to carry into effect the intent expressed in paragraph four. Paragraph six does not\nrequire the executors to do anything. It certainly does not authorize them, or us, to disregard\nthe clear intent of the testator, to treat land as if it were stocks and bonds, or to require\nconversion of the land into income-producing assets to the detriment of the testator\'s\nchildren.\nAccordingly, I would affirm.\nNotes, Questions, and Problems\n1. In order to avoid violating the duty of impartiality, the trustee has to carefully balance the\ninterest of both the income beneficiary and the beneficiary who will ultimately receive the\nprinciple. Nonetheless, the trustee often intentionally or unintentionally favors the\nremainderman over the life beneficiary for several reasons. First, the trustee may be reluctant\nto give the life beneficiary a lot of income because he anticipates that the life beneficiary may\nneed more income later in his or her life. This is a valid concern because as people age they\nhave increased medical and other expenses. However, if the life beneficiary dies sooner than\nthe trustee expected, the remaindermen will receive a greater portion of the trust assets.\nSecond, the trustee may be concern about his liability. If the income beneficiary successfully\nsues the trustee for not distributing enough money, the trustee can simply take the money\nfrom the trust. On the other hand, if the remainderman successfully sues the trustee for\ndiminishing the corpus of the trust, the trustee may be personally liable for the loss. Once\nthe money has been paid out of the trust, the trustee cannot recoup it from the life\nbeneficiary. Finally, the trustee may favor the remaindermen over the life beneficiary because\nhe think that the testator so intended. That belief comes from the fact that the\nremaindermen are usually minors or persons who need more financial support. If the trust\ninstrument clearly expresses the testator\xe2\x80\x99s intent that the trustee not deal equally with the\ntwo different types of beneficiaries, the trustee can act impartially and not violate his trust\nduty.\n\n320\n\n\x0c2. The duty of impartiality does not appear to take into consider factors like the age, financial\nresources and vulnerability of the present beneficiary and the future beneficiary of the trust.\nShould those factors be relevant to a determination or whether or not the trustee has\nviolated the duty of impartiality?\n3. Problems\nIn which one of the following cases has the trustee violated the duty of impartiality?\na). Bonita stated the following in her will: \xe2\x80\x9cI leave my tree farm in trust for the benefit of my\nson, Gordon, for life. After Gordon\xe2\x80\x99s dies, the tree farm is to be held in trust for the benefit\nof my grandson, Adam.\xe2\x80\x9d After Bonita died, Jacob assumed his role as trustee. Jacob entered\ninto a contract to have all of the trees cut down and sold, so he could have enough trust\nincome to pay Gordon.\nb). Leonard placed his apartment complex in trust for the benefit of Edna for life. After\nEdna\xe2\x80\x99s death, the apartment complex was to be sold and the proceeds paid to Isaac. When\nLeonard died, Rachel assumed her role as trustee. Rachel used the rents from the apartment\ncomplex to pay the income to Edna. In order to save money, Rachel did not do major\nrepairs on the apartment complex.\nc) Jillian placed the residuary of her estate in trust for the benefit of Antonio for life. After\nAntonio\xe2\x80\x99s death, the remaining funds were to be held in trust for the benefit of Antonio\xe2\x80\x99s\nchildren. When Jillian died Stefano assumed his role as trustee. Instead of investing the trust\nfunds in the stock market, Stefano placed them in a savings account. As a result, he was only\nable to pay Antonio six hundred dollars a month.\nd). Curtis placed his entire estate in a discretionary support trust for the benefit of Selma for\nlife. After Selma died, the remaining principal was to be held in trust for Selma\xe2\x80\x99s children.\nWhen Curtis died, Brooklyn assumed his role as trustee. Brooklyn decided that since Selma\xe2\x80\x99s\nchildren were young, they needed the money more than Selma. Thus, he reduced the\ndistribution of the income, so he could preserve the principal for her children\xe2\x80\x99s trust.\nRestatement (Third) of Trusts \xc2\xa7 79\n(1) A trustee has a duty to administer the trust in a manner that is impartial with respect to\nthe various beneficiaries of the trust, requiring that:\n321\n\n\x0c(a) in investing, protecting, and distributing the trust estate, and in other administrative\nfunctions, the trustee must act impartially and with due regard for the diverse beneficial\ninterests created by the terms of the trust; and\n(b) in consulting and otherwise communicating with beneficiaries, the trustee must proceed\nin a manner that fairly reflects the diversity of their concerns and beneficial interests.\nClass Discussion Tool\nSonia left her art collection in trust to Melissa for the benefit of Shirley and Tonya.\nMelissa was to use the money made from the sell and rental of the art collection to pay\nincome to Shirley for life. The trust was to terminate on Shirley\xe2\x80\x99s death. At that time, Melissa\nwas instructed to distribute the art collection and any trust money to Tonya. Melissa did not\nhave any expertise in the art world, so she periodically contacted Noah, an art collector, for\nadvice. In order to show her gratitude to Noah, Melissa gave him one of the paintings from\nthe trust\xe2\x80\x99s art collection. The art industry suffered an economic downturn, so Melissa was\nhaving a difficult time renting the paintings. Thus, she started selling more paintings to have\nmoney to pay to Shirley. Melissa met with Noah and told him that she planned to sell a\npainting call \xe2\x80\x9cThe Rain.\xe2\x80\x9d Noah advised Melissa not to sell the painting until the article,\nRayne, died. At that time, Rayne was suffering from terminal cancer. The trust was strapped\nfor cash, so Melissa ignored Noah\xe2\x80\x99s advice and sold the painting for $300,000. A week later,\nRayne died. Then, \xe2\x80\x9cThe Rain\xe2\x80\x9d was worth one million dollars. The trust continued to lose\nrevenue. In order to save money, Melissa reduced the amount of insurance she had on the\npainting. A few years later, Shirley died. Unfortunately, before Melissa could turn the\npaintings over to Tonya, the paintings were destroyed in a fire. The insurance proceedings\nonly covered 75% of the value of the destroyed paintings. Tonya sued Melissa for a breach\nof the duty of impartiality. Please analyze the legal issues that arise from the facts in a\njurisdiction that has adopted Restatement (Third) of Trusts \xc2\xa7 79.\n\n322\n\n\x0cChapter 12 - Duty to Account and\nInform\nAs the previous chapters have indicated, the trustee has a lot of responsibilities.\nSome of the trustee\xe2\x80\x99s duties are mandated by law; others are imposed by the provisions of\nthe trust instrument. In order for the beneficiary to hold the trustee accountable, the\nbeneficiary must have information about what the trustee is required to do and what the\ntrustee actually does. Thus, the trustee has a duty to account and to inform. These duties are\nrelated because the purpose of the accounting procedure is to provide the court and the\nbeneficiary with information. The accounting may be mandated by the trust instrument or\nthe law or requested by a beneficiary who suspects that the trustee has violated the terms of\nthe trusts instrument.\nThe accounting protects the interests of the trustee and the beneficiary. After the\ntrustee makes an accounting that is accepted by the beneficiary and the court, the trustee is\nprotected from liability to the extent that the factual basis for a later claim by the beneficiary\nwas disclosed in the accounting and accepted by the beneficiary. Consider the following\nexample. A leaves his house to B in trust for the benefit of C. The house declines in value\nafter B assumes his role as trustee. At an accounting, B informs C that since the house is\ndepreciating, B has decided to reduce the insurance coverage on it. C fails to object to B\xe2\x80\x99s\naccounting and the court approves it. If the trust suffers a loss because of the lack of full\ninsurance coverage, C might be inclined to sue B for breaching his duty of prudence.\nHowever, A may be relieved of liability because the accounting was accepted by the\nbeneficiary and approved by the court. Nonetheless, an accounting will not protect a trustee\nwho misrepresents vital facts. The beneficiary\xe2\x80\x99s consent to the accounting must be informed.\nThus, a beneficiary who lacks the capacity to understand the information presented at the\naccounting will not be prevented from later challenging the court\xe2\x80\x99s approval of the\naccounting.\nWhen a beneficiary requests an accounting she is usually seeking some type of\ndamages. Therefore, this chapter includes a brief discussion of the remedies available to the\nbeneficiary when the trustee is found to have breached one or more of his duties.\n323\n\n\x0c12.1\n\nTo Account\n\nRaak v. Raak, 428 N.W.2d 778\nPER CURIAM.\nRespondents, former trustees of Berdena Raak\'s revocable trust, appeal as of right\nfrom an order of the probate court requiring them to render an accounting as to trust\nproperty. We affirm.\nPetitioner Berdena Raak is a widow in her late seventies who lives by herself.\nRespondents are Berdena\'s children. Throughout their marriage, Berdena\'s husband was the\nexclusive manager of the couple\'s assets, so that Berdena had no experience in financial\nmanagement. Berdena was the sole beneficiary under their joint will. Shortly after her\nhusband\'s death in 1981, respondents began to assume control over Berdena\'s assets which\napparently totaled approximately $104,591.82, exclusive of her home and antique doll\ncollection.\nIn September, 1983, Berdena and respondents entered into a written trust agreement\nappointing respondents as trustees. Pursuant to the terms of the declaration of trust,\nBerdena conveyed to herself and respondents as joint tenants with rights of survivorship her\nreal property, personal property, and intangible personal property. Along with the trust\nagreement, Berdena also granted respondents a durable power of attorney.\nIn September, 1984 Berdena, revoked the power of attorney. In November, 1984,\nshe petitioned the probate court for the appointment of a conservator and revoked the\ndeclaration of trust. The probate court granted the petition and named petitioner FMB-First\nMichigan Bank conservator. Respondents subsequently delivered to the conservator\n$32,579.12 in assets.\nOn September 9, 1985, Berdena and FMB filed a petition for an order to show cause\nin the probate court alleging that, as trustees, respondents converted items of personal\nproperty, failed to make payments on a promissory note to Berdena, used the power of\nattorney to transfer title to Berdena\'s assets without her knowledge and consent, and refused\nto reconvey her real and personal property. The petition requested that the court order\nrespondents to render an accounting of the property while it was held in trust in order to\ndetermine the whereabouts of the $70,000 in missing assets.\n324\n\n\x0cOn March 13, 1986, the probate court granted petitioners\' motion for partial\nsummary disposition and ordered respondents to reconvey to Berdena her real property. The\ncourt further ordered respondent Robert Raak to prepare an accounting of all Berdena\'s\nassets over which he had obtained control or title pursuant to the durable power of attorney.\nThe court, however, reserved the question of whether respondents were under a duty to\nrender an accounting of the trust property. This was because respondents claimed that under\nparagraph 7 of the declaration of trust they had no obligation to account for the trust assets.\nParagraph 7 provided:\n\xe2\x80\x9c7. ACCOUNTING. So long as [Berdena Raak] lives and is not disabled,\nTrustees need keep no accounts because of the control which she has\nretained. However, in the event of the disability or death of Berdena Raak,\nTrustees shall keep an account of receipts and disbursements and of property\non hand at the end of the accounting period and shall deliver copies to the\nbeneficiaries or, if one is a minor, to one with whom he makes his home.\xe2\x80\x9d\nIn the meantime, Berdena decided that she no longer wanted an accounting of her\nassets, that it did not matter where her $70,000 went, and that she no longer required a\nconservator. The court subsequently refused to dismiss the conservatorship, ruling: \xe2\x80\x9cI can\'t\nthink of a situation that requires one more than this one.\xe2\x80\x9d\nFollowing a hearing on the issue whether respondents had an obligation to render an\naccounting, the court ruled that respondents were legally obligated to do so. On\nrespondents\' motion for reconsideration, the court stated:\n\xe2\x80\x9cThis Court\'s appointing of a fiduciary, a [sic] official fiduciary, a\nconservator, I think places that fiduciary in the shoes of Berdena Raak, and I\nthink that even this provision of the trust would allow that conservator to ask\nfor an accounting. I can\'t conceive of a situation where someone would make\nsomeone a trustee and not be able to change their minds on an account\nsituation. I think that\'s, as I\'ve said before, the responsibility of a fiduciary.\nTo hold otherwise would mean that Berdena Raak five years down the road\ncould wonder what happened to her money and have no ability to get\nanswers to those questions. That\'s not the way I construe that provision of\nthe Trust Document.\n325\n\n\x0c\xe2\x80\x9cFormal accounts, perhaps. An idea of what happened to the money? No, I\ncannot believe that that is included in that or that the law would recognize\nthat situation. The restatement of law, I think, points out the very difficulties\nwe are dealing with here. It says a provision in the terms of the trust that\nthere shall be no liability to account, however, may manifest an intention not\nto create a trust in the first place. And I think that indicates what I\'m saying.\nFiduciaries commonly have a duty to account to the persons they are\nresponsible to. And I find nothing else in the brief supplied that would\nchange my mind on that issue. There is a duty to account by all fiduciaries,\nand nothing in the law that I\'m aware of or has been presented to me would\nchange that.\xe2\x80\x9d\nOn appeal, respondents contend that this ruling was erroneous and that the terms of\nparagraph 7 of the trust document, relieving them of the duty to account, should control.\nWe disagree.\nIt is a strict duty of a trustee to keep and render a full and accurate record and\naccounting of his trusteeship to the cestui que trust, and the duty is strictly enforced by the\ncourts. 76 Am. Jur.2d Trusts, \xc2\xa7 505, pp. 725-726. In Michigan, the duty to account is\ncodified a M.C.L. \xc2\xa7 700.814; M.S.A. \xc2\xa7 27.5814. Under a trust agreement relieving the trustee\nfrom the necessity of keeping formal accounts, while a beneficiary cannot expect to receive\nreports concerning the trust estate, the trustee may be required in a suit for an accounting to\nshow that he faithfully performed his duties, and is liable to whatever remedies may be\nappropriate if he was unfaithful to the trust. See 76 Am. Jur.2d Trusts, \xc2\xa7 505, p. 726. This is\nbecause a trust instrument may relieve a trustee from the necessity of keeping formal\naccounts, but cannot legally relieve him from his duty to account in a court of equity.\nAs explained in Bogert, The Law of Trusts & Trustees (rev 2d ed), \xc2\xa7 973, pp 462464, 467:\n\xe2\x80\x9cIf the settlor attempts to eliminate any accounting duty of the trustee, by\nproviding that it shall not be necessary for his trustee to account to anyone at\nany time, it would seem that the clause should be invalid and the duty of the\ntrustee unaffected. The settlor ought not to be able to oust the court of its\ninherent equitable, constitutional or statutory jurisdiction, or to override the\n326\n\n\x0cacts of the legislature concerning information to be furnished by trustees to\ntheir beneficiaries. Provisions of this sort in deeds and wills would seem\nagainst public policy and void, just as contract clauses to like effect are\ndeclared null. There is a small amount of authority on the subject. The better\nreasoned decisions hold that the trustee still must account to the proper\ncourt.\n\xe2\x80\x9cA settlor who attempts to create a trust without any accountability in the\ntrustee is contradicting himself. A trust necessarily grants rights to the\nbeneficiary that are enforceable in equity. If the trustee cannot be called to\naccount, the beneficiary cannot force the trustee to any particular line of\nconduct with regard to the trust property or sue for breach of trust. The\ntrustee may do as he likes with the property, and the beneficiary is without\nremedy. If the court finds that the settlor really intended a trust, it would\nseem that accountability in chancery or other court must inevitably follow as\nan incident. Without an account the beneficiary must be in the dark as to\nwhether there has been a breach of trust and so is prevented as a practical\nmatter from holding the trustee liable for a breach.\xe2\x80\x9d\nThe case law of other states is consistent with the above authorities. In Wood v.\nHoneyman, 178 Or. 484, 566, 169 P.2d 131, 166 (1946), the Oregon Supreme Court stated:\n\xe2\x80\x9cWe are completely satisfied that no trust instrument can relieve a trustee\nfrom his duty to account in a court of equity. We are, however, [satisfied that\nwhen] a provision is found in a trust instrument [relieving a trustee from the\nnecessity of keeping formal accounts] a beneficiary can not expect to receive\nreports concerning the trust estate. But even when such a provision is made a\npart of the trust instrument, the trustee will, nevertheless, be required in a\nsuit for an accounting to show that he faithfully performed his duty and will\nbe liable to whatever remedies may be appropriate if he was unfaithful to his\ntrust. Such being our views, it follows that, so far as the Educational Trust\n[relieving the trustee from all obligation to account to the beneficiaries of this\ntrust, or to anyone] is concerned, the defendant was not required to maintain\nformal records and supply information to the beneficiaries concerning the\n327\n\n\x0ccondition of the corpus of the trust. The provision under consideration did\nnot, however, relieve him from the accounting which the circuit court\nexacted of him.\xe2\x80\x9d\nAccord: Ferguson v. Mueller, 115 Colo. 139, 169 P.2d 610 (1946) (every trust beneficiary is\nentitled to a court accounting from his trustee, and this right cannot be barred by a term of\nthe trust instrument); Salter v. Salter, 209 Ga. 90, 70 S.E.2d 453 (1952) (a provision in a trust\ninstrument that the trustee need not account or file an inventory does not relieve the trustee\nfrom accounting in a court of equity); In re Porter\xe2\x80\x99s Estate, 164 Kan. 92, 187 P.2d 520 (1947).\n(clause stating that trustees for charity are not to give bond or be under obligation to account\nto any person or court does not deprive the court of jurisdiction to hold the trustees to\naccount).\nIt is the tendency of the courts to construe narrowly clauses in trust instruments\nrelieving the trustee from the duty to account. 76 Am. Jur.2d Trusts, \xc2\xa7 505, p. 726. Applying\nthe above principles to the instant case, we find no error necessitating reversal in the probate\ncourt\'s order requiring respondents to prepare an accounting of the trust assets. Petitioners\nhave alleged the respondents breached their fiduciary duties to Berdena by converting items\nof personal property, failing to make payments on a promissory note, and removing papers\nand records. Paragraph 7 may relieve respondents from the necessity of keeping formal\naccounts but it does not relieve them of their duty to account in the probate court.\nAFFIRMED.\n\nJacob v. Davis, 738 A.2d 904\nADKINS, Judge.\nAppellant William H. Jacob (Bill) is the sole remainderman of two trusts established\nunder the last will and testament of his father, John B. Jacob (John). Appellant sued Michael\nW. Davis, the surviving trustee of those trusts, and Davis\'s law firm, Ahlstrom & Davis,\nP.A., appellees, alleging numerous violations of appellees\' fiduciary duties as trustees, and\nseeking an accounting, other equitable relief, and damages. The complaint included the\nfollowing counts: 1) breach of fiduciary duty; 2) declaratory relief; 3) injunctive relief; 4)\nbreach of contract; 5) tortious breach of covenants of good faith and fair dealing; 6)\nnegligence; 7) trover and conversion; and 8) an accounting and establishment of a\n328\n\n\x0cconstructive or resulting trust. Ruling on a motion made by appellees at the end of\nappellant\'s case, the trial court entered judgment pursuant to Maryland Rule 2-519 in favor\nof appellees on all eight counts. This appeal was timely filed from that judgment.\nFACTS\nJohn died on January 22, 1994, leaving an estate valued at $853,164, and a will that\ncreated two trusts known as the Marital Trust, and the Family Trust, respectively\n(collectively, \xe2\x80\x9cthe Trusts\xe2\x80\x9d). John\'s surviving wife, Harriett Bell Jacob (Harriett) was the\nincome beneficiary of the Trusts, and appellant was the remainder beneficiary. Harriett,\nappellant\'s stepmother, had the right to make certain withdrawals of principal from the\nFamily Trust, limited in amount and timing, and Davis, as independent trustee, had the\nauthority to make discretionary distributions of principal from the Trusts to Harriett \xe2\x80\x9cas, in\nthe sole and absolute discretion of [Davis], are necessary, desirable or appropriate for the\nhealth, education and support of [Harriett] in [her] accustomed manner of living.\xe2\x80\x9d The will\ndirected that \xe2\x80\x9cin exercising such discretion, the Trustee may take into account other financial\nresources of the beneficiaries under consideration.\xe2\x80\x9d Harriett was prohibited from\nparticipating in the discretionary decision to distribute principal to her.\nJohn bequeathed his residuary estate to the Marital and Family Trusts. The size of\neach trust was determined by a formula, which directed that the Family Trust receive an\namount equal to the maximum amount that could pass free of federal estate taxes by\nutilizing the credit against estate and gift taxes (\xe2\x80\x9cunified credit\xe2\x80\x9d) available to John, and the\nMarital Trust receive the remainder. Application of this formula resulted in zero federal\nestate tax payable by John\'s estate, because his available tax credit allowed $600,000 to pass\nto the Family Trust free of tax. Further, there were no taxes payable with respect to the\nassets passing to the Marital Trust, because the trust qualified for the federal estate tax\nmarital deduction (\xe2\x80\x9cmarital deduction\xe2\x80\x9d), and thus any tax was deferred until the death of\nHarriett.\nAppellee Davis and Harriett were designated as personal representatives of John\'s\nestate. The personal representatives were required to make an election on his federal estate\ntax return identifying what portion of the Marital Trust they elected to qualify for the marital\ndeduction. Although all assets passing to the Marital Trust could so qualify, an election was\nrequired to effectuate the marital deduction.\n329\n\n\x0cThe personal representatives were required to show on the estate\'s Administration\nAccount filed with the Orphans\' Court the exact amount passing to the Marital Trust The\nFirst and Final Administration Account for John\'s estate, filed November 7, 1994, showed\nthat $80,223 was to be distributed to the Marital Trust. This was consistent with the $80,476\nelected by the personal representatives to qualify for the marital deduction on John\'s federal\nestate tax return. In fact, however, no assets were distributed to the Marital Trust, and this\ntrust never was funded. John\'s entire residuary estate was distributed by appellee Davis and\nHarriett, personal representatives, to the Family Trust. The discrepancy between 1) the\namount designated as passing to the Marital Trust on the distribution account for John\'s\nestate ($80,476), which is consistent with the federal estate tax return, and 2) the actual\namount distributed (zero), is one subject of appellant\'s complaint.\nAnother subject of appellant\'s complaint is the refusal of appellee Davis to provide\nappellant with an accounting for the Trusts. Appellant first requested an accounting in May\nof 1996, by letter to a paralegal at Ahlstrom & Davis, P.A., who assisted Davis in estate and\ntrust matters. Responding in a May 28, 1996 letter (May 28 letter), Davis told appellant:\nYour letter raised an interesting point regarding my duties to you under the\nTrust Agreement for the aforesaid Trust. As you know, I am a co-Trustee\nwith your stepmother, Harriett Bell Jacob, of this Trust. Pursuant to the\nprovisions of the Trust, the Trustee is to render an annual account to the\n\xe2\x80\x9ccurrent income beneficiaries\xe2\x80\x9d of the Trust. At present, your stepmother is\nthe only income beneficiary. Thus, I as Trustee, have no obligation to\nprovide to you an accounting for the Trust.\nIf you wish, I will forward a copy of your letter to [the paralegal] to your\nstepmother for the purpose of obtaining her approval to give you an\naccounting for the Trust. Since she and I are co-Trustees, and since she is the\nsole income beneficiary, if I were to provide such an accounting to you\nwithout obtaining her consent first, I would be breaching my fiduciary\nobligations to her. Please let me know if you wish for me to do this.... Your\nstepmother is very active in the administration of this Trust, and, in fact,\nmakes all decisions regarding any distributions from the Trust. My only role\nat this point is to facilitate her administration and to provide to her any\n330\n\n\x0ccounsel that she may wish regarding the Trust.\nAfter receiving this letter, appellant called Harriett to request her permission for an\naccounting, but she declined. Harriett died in January 1997, leaving an estate valued at\napproximately $1,500,000.\nOn April 17, 1997, almost a year after his first request, appellant again requested by\nletter an accounting of the Trusts, this time through his attorneys, Christopher Wheeler and\nGene C. Lange (collectively, \xe2\x80\x9cWheeler\xe2\x80\x9d). In the letter Wheeler asked that the accountings\n\xe2\x80\x9ccover all assets, property, receipts, expenditures, distributions, trustee and other\ncommissions, attorneys\' and other professional fees, and any and all payments or transfers to\nand from the two trusts and [Harriett\'s] Estate.\xe2\x80\x9d The letter also requested all \xe2\x80\x9cbooks,\nrecords, tax returns, court filings or other information\xe2\x80\x9d concerning these items. Wheeler\nrequested that the information be furnished by April 25, 1997. In response to this letter,\nDavis wrote to Wheeler on April 18, 1997, and said, inter alia:\n[P]lease be advised that the John B. Jacob Marital Trust was never established\nsince the total assets that were available from the Estate of John B. Jacob to\nbe distributed to his Testamentary Trust did not exceed $600,000.\nDavis enclosed in his letter copies of the following documents: 1) inventory and\ndistribution account for John\'s estate; 2) statements from the brokerage firm of Ferris, Baker\nWatts for the Family Trust; 3) the check register for the Family Trust checking account; 4)\n1995 and 1996 balance sheets, prepared by the accountant for the Family Trust; 5) 1995 and\n1996 \xe2\x80\x9cgeneral ledgers,\xe2\x80\x9d prepared by the accountant, showing income and other deposits\nreceived, disbursements, plus sales of stocks; 6) income tax returns for 1995 and 1996 filed\nby the Family Trust; 7) a summary of profits and losses for 1995 and 1996 showing $143,543\nin total distributions to Harriett over the two-year period; and 8) John\'s will and First and\nFinal Accounting for John\'s Estate. Davis also provided a two-page document, unsigned,\ntitled \xe2\x80\x9cJohn Jacob Family Trust, Recap of Transactions.\xe2\x80\x9d Pertinent portions of this recap are\nreproduced below:\nJOHN B. JACOB FAMILY TRUST\nRECAP OF TRANSACTIONS\n1. JAN. \xe2\x80\x9895\n331\n\n\x0c2 taxable GNMA/FNMA bonds (35,000/ea.) transferred to Harriett\'s\nindividual account, as well as 6,000 in cash\nThis transfer was to satisfy the following: $30,000 specific bequest under Mr.\nJacob\'s Will, the family allowance of $5,000, and all income and interest\nearned by the Estate during the time of administration\n***\n2. MAR. \xe2\x80\x9895\n400 shares of Pfizer, 100 shares of United Technology transferred to Harriett\nas reimbursement for living expenses she paid out-of-pocket during the\ncourse of Estate administration ($28,997 rent to Vantage House, $12,830\nother living expenses and medical expenses paid on behalf of Mr. Jacob)\n3. APR. \xe2\x80\x9895\nBalt. Co. MD RFDG, 5.7% ($15,000) bond sold to provide cash for expenses\n4. MAY \xe2\x80\x9895\n100 shares of AT & T ($5600) transferred to Harriett\'s account\xe2\x80\x94per JD\nRing, this was Trust income due to Harriett and she took the shares of AT &\nT rather than cash. Trust income thru May was approx. $9,290. $4,000 was\ntransferred directly from FBW, and the remainder was taken in stock.\n***\n5. DEC. \xe2\x80\x9895\n$10,000 check requested from FBW to put cash into First National Trust\nchecking for expenses.\n6. DEC. \xe2\x80\x9895\n5% of the value of the Trust to go to Harriett pursuant to her 5/5 powers\xe2\x80\x94\nshe elected to take the $20,000 Md. 1st Ser. 6.5% bond and the $10,000 P.G.\nCo. MD IDA 6.65% bond. These were then transferred into her account.\n***\n\n332\n\n\x0c7. DEC. \xe2\x80\x9896\n5% of the value of the Trust to go to Harriett pursuant to her 5/5 powers\xe2\x80\x94\nshe elected to take $10,000 Md. St. Dept. Trans. 6.375%; $15,000 MD CDA\n6.3%, and 142 shares of Southern Co. ($3,159 value)\n8. JAN. \xe2\x80\x9897\n$4,750 cash transferred from the Ferris, Baker Watts into First National Bank\nTrust account (in anticipation of having to pay medical bills)\nThere have been a total of 26 checks written from the Trust checking\naccount since it was opened. 21 of the 26 checks were written to Vantage\nHouse for the monthly rental. The other checks were as follows:\n1. Ahlstrom & Davis, P.A. 12/95\xe2\x80\x94$1,931.40 (fees)\n2. Harriett Jacob 6/96\xe2\x80\x94$10,000 (repayment of loan\xe2\x80\x94no interest requested)\n3. Jeffrey D. Ring & Co. 10/96\xe2\x80\x94$1,350 (fees)\n4. Ahlstrom & Davis, P.A. 1/97\xe2\x80\x94$3,095.63 (fees)\n5. IRS 1/97\xe2\x80\x94$327.73 (taxes due on \'94 return)\nThe recap summarizes distributions to Harriett, but often does not designate\nwhether they were principal or income. For example, Harriett\'s monthly expenses at Vantage\nHouse were paid in March 1995 from the Family Trust, but not designated as either principal\nor income. In addition to the Vantage House payments, stocks, bonds, and cash with an\napproximate value of $143,000 were transferred to her during the two-year period.\nAccording to the Family Trust checkbook, payments to Vantage House totaled $49,572.67.\nThese distributions to Harriett or for her benefit substantially exceeded the Family Trust\nincome during this period.\nWith respect to the other information requested by Wheeler, Davis said:\nWith such short notice, the above is the best that we can do to comply with\nyour request that we provide you information by April 25, 1997. From these\ndocuments, you should be able to understand the relationship between the\nEstate of John B. Jacob, the John B. Jacob Family Trust, and Harriett Bell\n333\n\n\x0cJacob. I think you will find that there were no distributions from the Trust\nthat did not comply with both the intent and the provisions of the Last Will\nand Testament of John B. Jacob.\nDavis did not provide any further information to explain the discrepancy in\naccounting regarding the Marital Trust funding. Nor did he provide information as to how\nthe expenses of the trust, such as trustees\' commissions and accountant fees, were allocated\nbetween the income beneficiary and the remainderman. Further, no information was\nprovided to show how in kind distributions of stock to Harriett were valued, e.g., at\ninventory value or fair market value.\nDavis did offer to meet with appellant and counsel and the accountant for the estate\nto discuss their concerns. On May 5, 1997, Wheeler replied that \xe2\x80\x9ca meeting would probably\nbe beneficial, but [we] would prefer that we have a little longer to digest the information you\nprovided.\xe2\x80\x9d In that letter Wheeler also said: \xe2\x80\x9cWe have noted an omission in the documents\nyou provided. As a result we hereby request a complete accounting of (including all\ndocuments related to) the transfer of assets owned by John B. Jacob at his death, to the\nFamily Trust, for the period October, 1994, through January, 1995.\xe2\x80\x9d Wheeler also requested\nthe federal estate tax return for John\'s estate.\nDavis responded to Wheeler\'s letter on May 7, and enclosed the Ferris, Baker Watts\nstatements for the period requested and the federal estate tax return. With respect to the\nstatements, appellee Davis commented: \xe2\x80\x9c[p]lease note that there may be discrepancies\nbetween these statements and the accounting that was filed in the Orphan\'s Court.... The\nAccounting does not provide a means to show changes in the prices of the equities during\nthe time from when the estate is opened until the time the estate is closed.\xe2\x80\x9d He also said:\nPlease advise Mr. Jacob that we are currently in a position to wind up his\nfather\'s trust and make the final distributions as required under [his father\'s]\nLast Will and Testament. Until any potential claims that Mr. Jacob wants to\nmake are resolved, however, we cannot wind up the trust. We await Mr.\nJacob\'s pleasure with regard to the timing of this process.\nOn May 23, 1997, Wheeler again wrote to Davis, and requested that he \xe2\x80\x9cexplain the\njustification for the removal of\xe2\x80\x9d five stocks and seven bonds from the trust, as well as other\n334\n\n\x0cspecific items, suggesting that these items \xe2\x80\x9ccould only be removed from the Family Trust\npursuant to the terms and intent of the Family Trust established by Mr. Jacob.\xe2\x80\x9d The record\ndoes not reflect Davis\'s response to this letter. Bill testified that he never received any\nexplanation or accounting from Davis regarding the trust principal that was distributed to\nHarriett. Appellees took the position at trial and on appeal that they had no obligation to\naccount to Bill.\nAlthough the letters refer to several telephone conversations between counsel, there\nis no indication that the parties ever had a meeting. Appellant filed suit on July 3, 1997.\nDISCUSSION\nWe must determine the validity of the trial court\'s entry of judgment on all eight\ncounts of the complaint in favor of appellees at the end of appellant\'s case. Our major focus\nin this opinion will be on Counts I, II, and III, all of which rest on the equitable claim that\nappellees violated their fiduciary duties as trustees. We vacate the judgment entered on these\ncounts, and remand the case to the circuit court for further proceedings on these counts. We\naffirm the lower court\'s judgment on Counts IV through VIII.\nI.\nCount I\xe2\x80\x94Breach of Fiduciary Duty\nAppellant alleged several breaches of fiduciary duty by appellees, and included\nrepetitive allegations in his complaint.\nWe have distilled the alleged breaches into three separate categories, and discuss each\nseparately.\nA.\nEntitlement to Accounting\nAppellant complains that appellees never provided a full accounting of the Trusts\ncreated under John\'s will. Appellees contend that they had no obligation to provide an\naccounting to appellant either during the lifetime of Harriett or after her death. Alternatively,\nthey claim that the documents they provided to appellant in April 1997, after her death, were\na sufficient accounting of the Trusts.\nAppellees rely on section 10.02 of John\'s will, which provides:\n335\n\n\x0cMy Trustee shall be excused from filing any account with any court;\nhowever, my Trustee shall render an annual (or more frequent) account and\nmay, at any other time, including at the time of the death, resignation, or\nremoval of any Trustee, render an intermediate account of my Trustee\'s\nadministration to such of the then current income beneficiaries who are of\nsound mind and not minors at the time of such accounting. The written\napproval of such accounting by all of such income beneficiaries shall bind all\npersons then having or thereafter acquiring or claiming any interest in any\ntrust, and shall be a complete discharge to my Trustee with respect to all\nmatters set forth in the account as fully and to the same extent as though the\naccount had been judicially settled in an action or proceeding in which all\npersons having, acquiring, or claiming any interest were duly made parties\nand were duly represented.\nThe trial court held that under the terms of the Trusts and applicable law, the\ntrustees had no obligation to account to a remainderman such as appellant during the\nlifetime of the income beneficiary. The trial court seemingly agreed with appellant that an\naccounting was due after death, but found that the documents provided by appellees after\nHarriett\'s death sufficed. Specifically, the court said:\n[T]he Ferris, Baker Watt statements certainly show with respect to the stock\nportfolio [of] which much of this estate was comprised, indicates the\ntransactions that took place, and also shows at the end [sic] of the taxable\nincome. So there certainly is a reference as to what income was derived in a\nparticular year.\nWe do not agree with appellees\' view that appellant is not entitled to request and\nobtain an accounting of the Trusts. The leading authorities on trusts are unequivocal in their\narticulation of the right of the remainder beneficiary to an accounting during the lifetime of\nthe income beneficiary and after his or her death. Austin W. Scott and William F. Fratcher,\nThe Law of Trusts, (Vol. IIA 4 th ed.1987) \xc2\xa7 172 explains:\nA trustee is under a duty to the beneficiaries of the trust to keep clear and\naccurate accounts. His accounts should show what he has received and what\nhe has expended. They should show what gains have accrued and what losses\n336\n\n\x0chave been incurred on changes of investments. If the trust is created for\nbeneficiaries in succession, the accounts should show what receipts and what\nexpenditures are allocated to principal and what are allocated to income.\nIf the trustee fails to keep proper accounts, all doubts will be resolved against\nhim and not in his favor ...\nNot only must the trustee keep accounts, but he must render an accounting\nwhen called on to do so at reasonable times by the beneficiaries. Where there\nare several beneficiaries, any one of them can compel an accounting by the\ntrustee. The fact that a beneficiary has only a future interest ... does not\npreclude him from compelling the trustee to account.\nId. (emphasis added).\nGeorge Bogert, The Law of Trusts and Trustees, (Rev.2d ed.1983) \xc2\xa7 961 takes a similar\nview:\n[T]he beneficiary is entitled to demand of the trustee all information about\nthe trust and its execution for which he has any reasonable use....\nIf the beneficiary asks for relevant information about the terms of the trust, its\npresent status, past acts of management, the intent of the trustee as to future administration,\nor other incidents of the administration of the trust, and these requests are made at a\nreasonable time and place and not merely vexatiously, it is the duty of the trustee to give the\nbeneficiary the information for which he has asked.\nBoth Scott, supra, and Bogert, supra, cite numerous cases in support of the rule that a\nremainder beneficiary is entitled to an accounting. Scott, supra, \xc2\xa7 172 at 454; Bogert, supra, \xc2\xa7\n973.\nRestatement (Second) of Trusts \xc2\xa7172, comment (b) states the rule in like terms:\nThe beneficiary may by a proper proceeding compel the trustee to render to\nthe proper court an account of the administration of the trust.... The trustee\nmay be compelled [to] account not only by a beneficiary presently entitled to\nthe payment of income or principal, but also by a beneficiary who will be or\nmay be entitled to receive income or principal in the future.\n337\n\n\x0cMaryland law is consistent with the law of other states. The Court of Appeals\nliberally construed the class of those beneficiaries who have a right to an accounting in the\ncase of In Re Clarke\xe2\x80\x99s Will, 198 Md. 266, 81 A.2d 640 (1951). There, a remainder beneficiary\nsought an accounting and declaratory relief and alleged that the trustee planned to sell a farm\nthat was a trust asset and apply the proceeds for the benefit of her husband, an income\nbeneficiary of the trust. The Court held that the contingent remainderman had standing to\nseek an accounting, and explained: \xe2\x80\x9cIf the petitioner has any interest at all he is entitled to\ninvoke the court\'s protection.\xe2\x80\x9d Id. at 273, 81 A.2d 640; see also Baer v. Kalm, 131 Md. 17, 101\nA. 596 (1917).\nIn Shipley v. Crouse, 279 Md. 613, 370 A.2d 97 (1977). the Court of Appeals articulated\nthe general rule:\nWhile ... in the ordinary case, beneficiaries are entitled to receive \xe2\x80\x98complete and\naccurate information as to the administration of the trust\xe2\x80\x99 and \xe2\x80\x98to know what\nthe trust property is and how the Trustee has dealt with it,\xe2\x80\x99 this is not absolute,\nif the trustee renders periodic reports showing collection of income and\ndisbursements, if the trustee is acting in good faith and is not abusing his\ndiscretionary powers.\nId. at 625, 370 A.2d 97 (citations omitted). The Shipley Court did not indicate that the rights\nof the plaintiffs, who were remaindermen, were more restricted because they had no\nimmediate possessory interest. The statement of the rule in Shipley, however, was dictum\nbecause the plaintiffs did not obtain the disclosures they desired. The Court held that a\ntrustee\'s duty to account did not require that the trustee disclose the specifics of delicate\nnegotiations with a potential buyer regarding the sale of a business owned by the trust,\nespecially when remaindermen had previously expressed their agreement that the business be\nsold. Id. at 625-26, 370 A.2d 97.\nAppellees argue that section 10.2 of the will relieves them from any obligation to\naccount to a remainder beneficiary. This section allows the trustee to provide an accounting\nat any time, and provides that if such accounting is approved in writing by the then income\nbeneficiaries, then the trustee is discharged with respect to the matters covered by the\naccount. Appellees would have us apply this section to modify the common law obligation\nof a trustee to account.\n338\n\n\x0cTo our knowledge, no Maryland appellate decision has addressed the extent to which\na decedent or testator may limit the common law duty of a trustee to account in a court of\nequity. Nor do we find any statute or rule, addressing this point. Bogert, supra, asserts that a\ntrust beneficiary has a right to an accounting, notwithstanding language in the trust\npurporting to limit its obligation to account:\nA [testator] who attempts to create a trust without any accountability in the\ntrustee is contradicting himself. A trust necessarily grants rights to the beneficiary\nthat are enforceable in equity. If the trustee cannot be called to account, the\nbeneficiary cannot force the trustee to any particular line of conduct with regard\nto the trust property or sue for breach of trust. The trustee may do as he likes\nwith the property, and the beneficiary is without remedy. If the court finds that\nthe settlor really intended a trust, it would seem that accountability in chancery or\nother court must inevitably follow as an incident. Without an account the\nbeneficiary must be in the dark as to whether there has been a breach of trust\nand so is prevented as a practical matter from holding the trustee liable for a\nbreach.\nBogert, supra, \xc2\xa7 973 at 467. In the present case we need not decide this interesting issue\nbecause we do not interpret section 10.02 in light of the will as a whole, to limit the trustees\'\nobligation to account under the present circumstances.\nWhen interpreting a will, we must gather the intention of the testator from the\nlanguage of the entire will. See LeRoy v. Kirk, 262 Md. 276, 280, 277 A.2d 611 (1971). Further,\nwe must construe the provisions of a will to be consistent, rather than to be in conflict. See\nVeditz v. Athey, 239 Md. 435, 448, 212 A.2d 115 (1965).\nWhen section 10.02 is considered in light of section 10.08, the former cannot\nreasonably be construed to deny appellant an accounting based on Harriett\'s consent to\nsome prior accounting. Section 10.08 provides:\nNotwithstanding any other provision hereunder, no Trustee hereunder shall have\na vote or otherwise participate in any decision regarding whether, and to what\nextent, any discretionary payment of principal or interest shall be made or\nallocated to or for such Trustee\'s personal benefit or to or for the benefit of any\n339\n\n\x0cperson for whose support such Trustee may be legally obligated. Any such\ndecision shall be made by the co-Trustee then serving, or if there is no such coTrustee, then the Trustee shall appoint a co-Trustee to make such decision.\nClearly, if Harriett cannot participate in a decision to distribute principal to her, then\nher consent to such distribution cannot be considered binding upon a remainderman whose\ninterest is adversely effected. Cf. Madden v. Mercantile-Safe Deposit & Trust Co.,, 27 Md. App.\n17, 339 A.2d 340 (1975) (any laches which could have been chargeable to income beneficiary\nregarding misconduct of trustee cannot be binding upon the remaindermen). Since\nappellant\'s claim for accounting is based upon his contention that principal amounts were\nimproperly distributed to Harriett, section 10.02 of the will does not bar his suit. See also\ndiscussion in Section IB of this opinion.\nNor do we interpret the provision in section 10.02 of the will that the trustees \xe2\x80\x9cshall\nbe excused from filing any account with any court\xe2\x80\x9d to mean that the testator intended to\nremove the jurisdiction of a court of equity to require an accounting upon the reasonable\nrequest of a beneficiary. See Salter v. Salter, 209 Ga. 90, 70 S.E.2d 453, 458 (1952). See also\nBogert ,supra, \xc2\xa7 973.\nAppellees suggested at oral argument that appellant was not entitled to an accounting\nin this proceeding because a court can only require an accounting if it assumes jurisdiction\nover the trust, and appellant did not follow the procedure under Maryland Ruel 10-501 to\nrequest that the court do so. We do not agree that a petition for assumption of jurisdiction\npursuant to Rule 10-501 is required in order that a court order an accounting, and find Baer,\nsupra, instructive. In Baer the Court held that the trustee\'s mere refusal to account did not\njustify his removal, but that if an accounting were necessary in order to ascertain whether the\ntrustee is executing the trust fairly and without abuse of the discretionary power reposed in\nhim, a Court of Equity, upon being applied to, should order such information to be given;\nbut until that is done and it is found that the trustee is not administering the trust in good\nfaith, or is abusing the discretionary power granted him under the will, the Court should not\nagainst his wishes, assume supervisory jurisdiction of the trustee\'s discretionary powers. Baer,\n131 Md. At 29, 101 A. 596. What we glean from Baer is that seeking and obtaining an\naccounting will sometimes precede a request for a court to assume jurisdiction over a trust,\nand the results of the accounting may be the \xe2\x80\x9creason for seeking the assumption of\n340\n\n\x0cjurisdiction by the court ...\xe2\x80\x9d required under Rule 10-501. Thus, we hold that appellant was\nnot required to petition pursuant to Rule 10-501 in order to obtain an accounting.\nIn sum, we hold that appellant was entitled to an accounting during the life of\nHarriett and at her death, notwithstanding the language in section 10.02 of John\'s will.\nB.\nThe Information Furnished by the Trustees\nThe trial court found that the documents provided by appellees in April 1997, were\nsufficient to meet any obligation to account because they provided the recap, brokerage\nstatements from the firms holding the estate\'s securities, and a list of payments and receipts\nfor the two-year period of the Family Trust. We do not agree with the trial court\'s\nconclusion that this information sufficed, because appellees still failed to provide certain\ncritical information. This information is separated by category and discussed below.\ni.\nAllocations of Expenses and Receipts Between Income and Principal\nOne of appellant\'s complaints about the information furnished by appellees is that\nthere was no allocation of receipts and expenses to either trust income or trust principal as\nrequired under Md.Code (1974, 1991 Repl.Vol.), \xc2\xa7\xc2\xa7 14-201 et seq. of the Estates and Trusts\nArticle (\xe2\x80\x9cPrincipal and Income Act\xe2\x80\x9d). Appellant\'s expert witness testified that, based on the\nrecords provided, it appeared that the trustees had made no allocation; and therefore, the\nburden of all expenses was borne by the remainder interest. Section 14-202 of the Principal\nand Income Act provides in pertinent part:\n(a) A trust shall be administered with due regard to the respective interests of\nincome beneficiaries and remaindermen. A trust is so administered with respect to\nthe allocation of receipts and expenditures if a receipt is credited or an expenditure\nis charged to income or principal or partly to each: (1) In accordance with the\nterms of the trust instrument, notwithstanding contrary provisions of this subtitle;\n(2) In the absence of any contrary terms of the trust instrument, in accordance\nwith the provisions of this subtitle; ...\nId. at \xc2\xa7 14-202. The remaining sections of the Principal and Income Act set forth detailed\n341\n\n\x0crules as to how a trustee should allocate receipts and expenses between the income\nbeneficiary and the remaindermen.\nThe parties have not directed us to, nor have we found, any clause in John\'s will that\nwould make the Principal and Income Act inapplicable. Further, a trustee\'s obligation to\nmake allocations between income beneficiaries and remaindermen is an obligation well\nrecognized in common law. See Berlage v. Boyd, 206 Md. 521, 532, 112 A.2d 461 (1955); Scott,\nsupra, \xc2\xa7 172 at 452, and cases collected therein (\xe2\x80\x9cIf the trust is created for beneficiaries in\nsuccession, the accounts should show what receipts and what expenditures are allocated to\nprincipal and what are allocated to income.\xe2\x80\x9d); Bogert, supra, \xc2\xa7 970 at 377\xe2\x80\x9378.\nThe documents that appear in the record do not make any allocations of receipts or\nexpenses to principal or income. Income tax returns do not suffice for this purpose because\nfederal law regarding what is taxable income, and what expenses are deductible from income,\ndiffers from determination of income and principal under the Principal and Income Act.\nCalvin H. Cobb, III, a lawyer specializing in estate and trust law, testified that he had\nreviewed all of the documents furnished by appellees, and was unable, based on that\ninformation, to reconstruct an accounting that made allocations between income and\nprincipal. Mr. Cobb testified that he \xe2\x80\x9ctried to recreate based on this information a proper\naccounting that would allocate income and principal [but there was] information that didn\'t\nreconcile....\xe2\x80\x9d He observed that \xe2\x80\x9cit appears that rather than distributing net income to\n[Harriett], there was no effort to charge expense to income. They instead distributed gross\nincome to [Harriett].\xe2\x80\x9d\nA major theme advanced by appellees in defense is that appellant, in presentation of\nhis case, was unable to demonstrate precisely where and how the trustees failed to follow\ntheir obligations under applicable law or John\'s will. \xe2\x80\x9c[T]he burden of proof on the issue of\nbreach of trust is not initially on the fiduciary....\xe2\x80\x9d Goldman v. Rubin, 292 Md. 693, 713, 441\nA.2d 713 (1982). The burden, however, shifts to the trustee once the beneficiary has\nintroduced a certain quantum of proof:\n[T]he person who challenges the conduct of a trustee, must first allege that the\ntrustee has a duty and has been derelict in the performance of this duty, and offer\nevidence in support of this allegation. Then, and not until then, does the trustee\nhave the burden of rebutting the allegation. In the absence of such proof, there is\n342\n\n\x0cno duty on the trustee to prove a negative: i.e., that he has not been derelict in\nthe performance of his duties.\nId. (quoting Lopez v. Lopez, 250 Md. 491, 501, 243 A.2d 588 (1968); see also Md. Nat\xe2\x80\x99l Bank v.\nCummins, 322 Md, 570, 581-82, 588 A.2d 1205 (1991); Wood v. Honeyman, 178 Or. 484, 169\nP.2d 131, 162 (1946); Scott, supra, \xc2\xa7 172 at 452 (\xe2\x80\x9cIf the trustee fails to keep proper accounts,\nall doubts will be resolved against him and not in his favor.\xe2\x80\x9d).\nWe have reviewed all of the documents provided by appellees to appellant in\nresponse to appellant\'s request for an accounting. Based on our review, in conjunction with\nthe testimony of Mr. Cobb, we conclude that appellant met his initial burden to show that\nappellees breached their fiduciary duties by failing to make any allocations between principal\nand income. Accordingly, it was incumbent upon appellees to come forward and explain this\napparent failure. Without such explanation, the trial court should not have granted the\nmotion for judgment on Count I.\nii.\nFailure to Account for Non\xe2\x80\x93Funding of Marital Trust: Marital Trust Bequest of\n$80,223 Pursuant To Formula In Will\nAnother deficiency asserted by appellant regarding the information furnished by\nappellees relates to the Marital Trust. The documents initially provided to appellant showed\na $80,223 distribution to the Marital Trust from the estate, but nothing about a Marital Trust\nthereafter. After a second request by appellant\'s counsel, appellees advised counsel that this\ntrust \xe2\x80\x9cwas never established since the total assets that were available ... to be distributed from\n[John\'s estate] did not exceed $600,000.\xe2\x80\x9d No explanation was then offered regarding the\ndiscrepancy between appellees\' non-funding of the Martial Trust and the $80,223\ndistribution shown on both the estate\'s administration account and John\'s federal estate tax\nreturn.\nThe assets held in John\'s estate may well have decreased in value between the date of\nJohn\'s death and the date assets were distributed from his estate. If such occurs, however,\nthe personal representative must follow the funding formula set forth in the will to\ndetermine how the decrease is allocated between the Trusts. We explain below.\nThe size of the bequests to the Marital Trust and the Family Trust is determined by\n343\n\n\x0cformula. The formula is tied to the amount of assets that can pass free of tax to a decedent\'s\nheirs under federal estate tax law by application of an individual\'s \xe2\x80\x9cunified credit.\xe2\x80\x9d I.R.C. \xc2\xa7\n2001 (1998). Expressed in non-technical terms, the federal tax law allows an individual to\npass to his or her heirs, free of tax, assets totaling no more than $600,000 in value. For\npurposes of the federal estate tax, the value of each asset is determined as of the date of the\ndecedent\'s death. When the values of the assets change during estate administration, at the\ntime of distribution, the personal representative must look to the will for instructions\nregarding how to value those assets. In the absence of instructions, a Maryland statute\ngoverns. See Md.Code (1974, 1991 Repl.Vol.), \xc2\xa7 11-107(2) of the Estates and Trusts Article\n(\xe2\x80\x9cE & T\xe2\x80\x9d).\nJohn\'s will did provide such instruction\xe2\x80\x94section 7.02 requires the assets distributed\nto the Marital Trust shall be selected in such manner that the cash and other property\ndistributed will have an aggregate fair market value fairly representative of the distributee\'s\nproportionate share of the appreciation or depreciation in the value to the date or dates of\ndistribution of all property then available for distribution. Any property assigned or\nconveyed in kind to satisfy the aforegoing bequest shall be valued for that purpose at the\nvalue thereof as finally determined for Federal Estate Tax purposes.\nJohn\'s personal representatives held the responsibility to determine how to allocate\nthe residuary estate between the Marital Trust and the Family Trust. Under the funding\nformula set forth in section 7.02, if the estate assets decrease in value, the Marital Trust\nwould be diminished on a pro rata basis with the Family Trust and would absorb no more\nthan its pro rata share of such decrease. In light of this mandatory directive we do not see\nhow the Marital Trust could be legitimately \xe2\x80\x9cwiped out\xe2\x80\x9d by a decrease in overall value, when\nthe Family Trust bequest remained intact.\nThe discrepancy regarding the funding of the Marital Trust is not explained by\nappellees\' assertion that the \xe2\x80\x9ctotal assets that were available ... to be distributed ... did not\nexceed $600,000.\xe2\x80\x9d Proof of the discrepancy was sufficient to place the burden on the\ntrustees to offer a better explanation and accounting with regard to this issue. Accordingly, it\nwas error for the trial court to enter judgment in favor of appellees in appellant\'s suit for\nsuch accounting.\nAppellees suggest that the discrepancy regarding funding of the Marital Trust is only\n344\n\n\x0cof theoretical concern because appellant is the remainderman under both the Marital and\nFamily Trusts. We do not agree with this analysis because the terms of John\'s will differ with\nrespect to principal distributions authorized to be made from each of the Trusts. Under\nsection 8.03 of John\'s will, Harriett could withdraw annually the \xe2\x80\x9cgreater of (a) Five\nThousand Dollars ($5,000) or (b) Five Percent (5%) of the value of the principal of the\nFamily Trust.\xe2\x80\x9d By contrast, she had no right of withdrawal from the Marital Trust. Thus, if\nthe Family Trust were funded with assets that properly belonged to the Marital Trust, then\nthe five percent of the trust subject to Harriett\'s withdrawal right became correspondingly\nlarger. The record suggests that Harriett exercised this right in full. Thus, it appears that\nsome assets that should have remained in trust for Bill were, in fact, distributed to Harriett.\nThe trial court rested its decision on the Marital Trust issue in part upon the\nfollowing language in John\'s will:\n[The trustee] shall have the power to make any election required to be made to\nqualify the Marital Trust for the federal estate and/or gift tax marital deduction. If\nthe federal estate tax laws applicable to my estate permit a partial election to be\nmade or permit such an election with respect to a specific portion of the Marital\nTrust, my Trustee may in its discretion make such election with respect to less than\nall the Marital Trust, and such portion shall be treated for all purposes as a specific\nportion of [the Marital] Trust and as a separate Trust share. My Trustee shall not\nbe liable for any decision made in good faith and with reasonable diligence with\nrespect to such election.\nThe discretion accorded the trustees by this section to make a \xe2\x80\x9cpartial election\xe2\x80\x9d\nallows the trustees to \xe2\x80\x9cqualify the Marital Trust for the federal estate tax marital deduction.\xe2\x80\x9d\nSuch partial election will have an impact on the amount of the Marital Trust that qualifies for\nthe marital deduction, but it does not cause any portion of the Marital Trust to be merged\nwith the Family Trust. As the clause indicates, if a partial election is made, the portion\nelected to so qualify, \xe2\x80\x9cshall be treated for all purposes as a specific portion of this Trust and\nas a separate Trust share.\xe2\x80\x9d The trustees\' power to create two separate trusts which together\ncomprise the Marital Trust is not equivalent to the power to transfer assets from the Marital\nTrust to the Family Trust. Harriett\'s power to withdraw principal extends only to the Family\nTrust, and does not extend to the Marital Trust, even if divided.\n345\n\n\x0cAppellees also suggest that because Harriett bequeathed her estate to trusts for the\nbenefit of Bill\'s children, appellant\'s concern about the size of the Trusts is only theoretical.\nRegardless of any emotional appeal that this contention may have, it has no legal merit in its\nown right. To the extent that assets were improperly distributed to Harriett, and passed to\ntrusts under her will, Bill is denied the right to those assets, even though his children receive\nan interest as trust beneficiaries.\nAlthough we have expressed our disagreement with appellees\' explanation, offered in\ntheir April 18, 1997 letter to appellant, for why the Marital Trust was not funded, we do not\nnow hold that John\'s estate was distributed improperly. We think that such decision must be\nreserved until appellees provide a full accounting of how they applied the formula in the will\nto distribute assets to the Marital Trust and Family Trust, respectively. We do hold that, in\nthe absence of a better explanation, the trial court should not have granted the motion for\njudgment on Count I.\nSummary Regarding Count I\nIn sum, we conclude that appellant produced sufficient evidence to meet his initial\nburden to show a specific breach of duty by appellees regarding their failure to account, their\nfailure to fund the Marital Trust, and improper delegation of their discretionary power to\ndistribute principal and to select assets to satisfy Harriett\'s right of withdrawal. Therefore,\nthe trial court erred in granting judgment against appellant at the end of his case. Rather, the\ntrial court should have required appellees to present their case and rebut or explain the\nevidence presented by appellant. We remand for that purpose.\n\n12.2 To Inform\nCook v. Brateng, 262 P.3d 1228\nBRIDGEWATER, P.J.\n\xc2\xb6 1 A. Diane Brateng appeals the trial court\'s division of Elmer Cook\'s trust\nproperty. We hold that Diane, who was both a beneficiary and trustee of Elmer\'s trust, did\nnot breach her fiduciary duties when she: (1) did not inform John Cook, her brother and also\na beneficiary of Elmer\'s trust, that she decided to claim and defer charges against Elmer\'s\nestate for providing Elmer\'s care; and (2) decided not to encumber Elmer\'s house to pay for\nhis care. We reverse the trial court\'s finding that Diane breached her fiduciary duties, hold\n346\n\n\x0cthat she is entitled to reasonable compensation for providing Elmer\'s care, and remand to\ndetermine her compensation and to redistribute the property. We hold that Diane is entitled\nto funds she spent to repair and remodel a portion of Elmer\'s home, and we do not disturb\nthe trial court\'s use of a 2007 appraisal it used to determine the value of Elmer\'s home.\nFACTS\n\xc2\xb6 2 The following facts are undisputed. Diane and John are siblings. In November\n1995, their father, Elmer, executed a living trust, naming himself and Diane as trustees.\nElmer\'s health deteriorated; two years later, in November 1997, he was declared\nincompetent, and Diane became sole trustee of his trust.\n\xc2\xb6 3 With Elmer declared incompetent, the trust required Diane, the sole remaining\ntrustee, to apply all trust property exclusively for Elmer\'s benefit. Specifically, the trust\nrequired Diane to \xe2\x80\x9cprovide as much of the principal and net income of [the] trust as is\nnecessary or advisable, in [Diane\'s] sole and absolute discretion, for my health, support,\nmaintenance, and general welfare.\xe2\x80\x9d CP at 36. The trust also required Diane to make\ninformation available to the beneficiaries:\nMy trustee shall report, at least semiannually, to the beneficiaries then eligible to\nreceive mandatory or discretionary distributions of the net income from the\nvarious trusts created in this agreement all of the receipts, disbursements, and\ndistributions occurring during the reporting period along with a complete\nstatement of the trust property.\nCP at 60.\nUpon Elmer\'s death, the trust directed Diane, as the trustee, to divide all remaining\ntrust property among herself, John, the Salvation Army, and the Finnish Assembly of God\nChurch. The trust allocated to each Diane and John a 9/20th share and to each charity a\n1/20th share. The trust also directed Diane to distribute the home to herself, \xe2\x80\x9cAS PART\nOF, AND NOT IN ADDITION TO, that share of [the] trust distributed to [Diane].\xe2\x80\x9d CP at\n46.\n\xc2\xb6 4 In November 1997, after Elmer was declared incompetent, Diane decided to\nmove Elmer from his home in Ilwaco, Washington, into her home in Kirkland, Washington,\nwhere she could more easily care for him. Elmer died in January 2000.\n347\n\n\x0c\xc2\xb6 5 During the time Diane cared for Elmer from November 1997 to January 2000,\nshe used $59,176.67 from the trust\'s liquid funds to pay for Elmer\'s medical expenses and\npersonal expenses, as well as maintaining, repairing, and remodeling the Ilwaco home. Diane\nspent $20,319.75 of the trust funds to repair water damage to the Ilwaco home and to\nremodel its kitchen. At the time of Elmer\'s death, the trust had $16,439.62 in liquid funds\nremaining. The only other remaining trust asset was Elmer\'s Ilwaco home.\n\xc2\xb6 6 Diane kept meticulous records of her time and expenses related to caring for\nElmer and her time and expenses related to driving from Kirkland to Ilwaco. She carefully\nrecorded her time spent caring for him from 1996 to 1997\xe2\x80\x94before she moved him to\nKirkland\xe2\x80\x94and she recorded her time spent caring for him while he lived with her in\nKirkland as \xe2\x80\x9c24 hour In-home Care.\xe2\x80\x9d Ex. 26. She also kept track of the fuel used to drive to\nIlwaco, her meals along the way, and the cost per mile. Finally, she recorded bills that she\npersonally paid for Elmer, recording the exact amount and method of payment. Diane\'s\nclaim against the estate for acting as Elmer\'s care giver totaled $142,171.10.\n\xc2\xb6 7 Although Diane kept these meticulous records, she did not disclose her intention\nto claim reimbursement to John until he filed suit and requested an accounting. Before\nElmer\'s death, Diane never discussed with John her expenses as a care giver, the value of her\nservices as a care giver, or her decision not to encumber Elmer\'s Ilwaco house to pay for his\ncare.\n\xc2\xb6 8 John filed suit against Diane in October 2001, which led to mediation and\narbitration under the \xe2\x80\x9cTrust and Estate Dispute Resolution Act\xe2\x80\x9d. John appealed the\narbitrator\'s decision and requested a trial de novo. The trial court issued a memorandum\nopinion on June 20, 2008, followed by findings of fact and conclusions of law on May 26,\n2009.\n\xc2\xb6 9 The trial court concluded that Diane, as trustee of her father\'s estate, had a duty\nto inform John that (1) she decided to claim and defer charges against Elmer\'s estate for\nproviding Elmer\'s care, and (2) she decided not to encumber Elmer\'s Ilwaco house to pay\nfor Elmer\'s care. The court further concluded that she breached her fiduciary duties and,\nthus, could not compensate herself for providing Elmer\'s care. The trial court awarded the\nIlwaco house to Diane, but gave John a 9/20th interest in its 2007 appraised value. The\ncourt also awarded Diane a credit for one-half the value of a property adjacent to the Ilwaco\n348\n\n\x0chouse that is not part of this appeal.\nANALYSIS\nI. DUTY TO INFORM\n\xc2\xb6 10 Diane argues that she did not have a duty to inform John that she was claiming\nand deferring her charges for providing Elmer\'s care until his death because neither the trust\nnor the applicable statutes required her to provide her brother with accounting statements.\nShe also argues, for the same reason, that she did not have a duty to inform John that she\ndecided to refrain from encumbering the Ilwaco house to pay for Elmer\'s health costs. We\nagree.\n\xc2\xb6 11 A trustee, as a fiduciary, owes beneficiaries the \xe2\x80\x9chighest degree of good faith,\ncare, loyalty and integrity.\xe2\x80\x9d Esmieu v. Schrag, 88 Was. 2d 490, 498, 563 P.2d 203 (1977). \xe2\x80\x9cIt is\nthe duty of a trustee to administer the trust in the interest of the beneficiaries.\xe2\x80\x9d Tucker v.\nBrown, 20 Wash.2d 740, 768, 150 P.2d 604 (1944). A trustee\'s duties and powers are\ndetermined by the terms of the trust, by common law, and by statute. In re Estate of Ehlers, 80\nWash.App. 751 757, 911 P.2d 1017 (1996). At common law, Washington courts have\ndefined a trustee\'s duty of care, skill and diligence to be that degree of care, skill and\ndiligence that an ordinary prudent man exercises in similar affairs. In re Nontestamentary Trust\nof Parks, 39 Wash.2d 763, 767, 238 P.2d 1205 (1951); Monroe c. Winn., 16 Wash.2d 497, 508,\n133 P.2d (1943).\n\xc2\xb6 12 Diane first contends that the trust did not require her to provide John with an\naccounting during Elmer\'s life. Without any analysis, she cites the following language of the\ntrust to support her contention:\nMy Trustee shall report, at least semiannually, to the beneficiaries then eligible to\nreceive mandatory or discretionary distributions of the net income from the various\ntrusts created in this agreement all of the receipts, disbursements, and\ndistributions occurring during the reporting period along with a complete\nstatement of the trust property.\nCP at 60 (emphasis added); Br. of Appellant at 14. The crux of her argument is that the trust\nlanguage does not require Diane to provide John with an accounting because he was not\n\xe2\x80\x9celigible\xe2\x80\x9d as a remainder beneficiary to receive distributions. CP at 60.\n349\n\n\x0c\xc2\xb6 13 We ascertain a settlor\'s intent and purpose from the four corners of the trust\ninstrument, construing all of its provisions together. Templeton v. Peoples Nat\xe2\x80\x99l Bank, 106\nWash.2d 304, 309, 722 P.2d 63 (1986). Here, Diane had sole and absolute discretion to use\nthe trust assets to provide for Elmer if he was incapacitated, as article four, section 3 of the\ntrust stated:\nMy Trustee shall provide as much of the principal and net income of my trust as\nis necessary or advisable, in its sole and absolute discretion, for my health,\nsupport, maintenance, and general welfare.\nCP at 36. Only the trust property not distributed to Elmer during his lifetime was to be\ndivided between Diane and John as beneficiaries. Neither Diane nor John was eligible to\nreceive their distributions during Elmer\'s lifetime, as the clear intent of the trust instrument\nwas to provide for his needs. Therefore, any mandatory accounting was primarily intended\nto benefit Elmer, as the sole income beneficiary; we agree with Diane that the trust did not\nrequire her to report receipts, disbursements, and distributions to John while Elmer was still\nliving. The trust required Diane to provide Elmer, as the sole income beneficiary, with an\naccounting only upon distribution. John does not argue that Diane failed to report to Elmer.\n\xc2\xb6 14 Diane also correctly notes that the law did not require her to provide John with\nan accounting. Under RCW 11.106.020, a trustee must provide at least an annual accounting\nto \xe2\x80\x9ceach adult income trust beneficiary ... of all current receipts and disbursements.\xe2\x80\x9d In\ncontrast, any beneficiary, including one holding only a present interest in the remainder of a\ntrust, may petition the court for an accounting. RWC 11.106.040, see Nelsen v. Griffiths, 21\nWash.App. 489, 493, 585 P.2d 840 (1978); see. Lastly, a trustee has a common law duty to\ngive a beneficiary, upon his reasonable request, complete and accurate information about the\nnature and amount of trust property. Tucker, 20 Wash.2d at 769, 150 P.2d 604. Here, because\nJohn was not an income beneficiary, RCW 11.106.020 did not compel Diane to provide him\nwith an accounting. Because John never petitioned the court for an accounting, RCW\n11.106.040 did not compel Diane to provide an accounting. And, finally, because John never\nrequested an accounting from Diane, she did not have a common law duty to provide him\nwith such accounting.\n\xc2\xb6 15 But determining that Diane was not required to provide an accounting is not\ndispositive of John\'s issues because a mandatory accounting would not have disclosed\n350\n\n\x0cDiane\'s decision to defer charges and to refrain from encumbering the Ilwaco house during\nher father\'s lifetime. Here, any accounting would have revealed only those receipts and\ndisbursements actually made. RCW 11.106.020. The plain language definition of these terms\nsuggests that a trustee need only provide an accounting for transactions actually paid from\nthe trust. Future contemplated transactions that have not yet occurred would not be shown\non an accounting. Thus, because mandatory accounting would not have disclosed Diane\'s\ndecisions to defer payment for her services rendered on her father\'s behalf, we turn to the\nmore general question of whether Diane had a duty to inform John of how she was\nmanaging the costs associated with Elmer\'s care.\n\xc2\xb6 16 A trustee\'s duty \xe2\x80\x9cincludes the responsibility to inform the beneficiaries fully of\nall facts which would aid them in protecting their interests.\xe2\x80\x9d Allard v. Pac. Nat\xe2\x80\x99l Bank, 99\nWash.2d 394, 404, 663 P.2d 104 (1983) (citing Esmieu, 88 Wash.2d at 498, 563 P.2d 203).\n\xe2\x80\x9cThat the settlor has created a trust and thus required the beneficiaries to enjoy their\nproperty interests indirectly does not imply the beneficiaries are to be kept in ignorance of\nthe trust, the nature of the trust property, and the details of its administration.\xe2\x80\x9d Allard, 99\nWash.2d at 404, 663 P.2d 104. A trustee\'s duty includes the responsibility to inform the\nbeneficiaries periodically of the status of the trust, its property, and how the property is\nbeing managed. Allard, 99 Wash.2d at 404, 663 P.2d 104. \xe2\x80\x9cIf the beneficiaries are able to\nhold the trustee to proper standards of care and honesty and procure the benefits to which\nthey are entitled, they must know of what the trust property consists and how it is being\nmanaged.\xe2\x80\x9d Allard, 99 Wash.2d at 404, 663 P.2d 104.\n\xc2\xb6 17 Allard holds that a trustee has a duty to inform beneficiaries about management\nof the trust that significantly affects their interest or, put differently, that a trustee breaches\nits duty to inform when it withholds information that would prejudice the beneficiaries.\nAllard, 99 Wash.2d at 404-05, 663 P.2d 104. In Allard, Pacific Bank held in trust for certain\nbeneficiaries a quarter block of property in downtown Seattle. Allard, 99 Wash.2d at 396, 663\nP.2d 104. The property was the sole trust asset. Allard, 99 Wash.2d at 396, 663 P.2d 104.\nUnder the trust provisions, Pacific Bank had full power to manage trust assets according to\nthe judgment and care that \xe2\x80\x9cprudent men exercise in the management of their own affairs.\xe2\x80\x9d\nAllard, 99 Wash.2d at 396, 663 P.2d 104. In 1978, Pacific Bank sold the downtown property\nbefore informing the beneficiaries of the sale more than a month later. Allard, 99 Wash.2d at\n351\n\n\x0c397, 663 P.2d 104.\n\xc2\xb6 18 The beneficiaries brought suit against Pacific Bank for breach of its fiduciary\nduties, arguing on appeal that Pacific Bank had a duty to inform them before selling the\nproperty. Allard, 99 Wash.2d at 401, 663 P.2d 104. Our Supreme Court agreed with the\nbeneficiaries and held that Pacific Bank had a duty to inform them of the sale. Allard, 99\nWash.2d at 405, 663 P.2d 104. The court reasoned that, although Pacific Bank could manage\ntrust assets without seeking the beneficiaries\' consent, and although the trust provisions\nrequired Pacific Bank to furnish only an annual statement for the prior year\'s investments,\nPacific Bank, as part of its fiduciary duties, had to inform the beneficiaries of all material\nfacts of the downtown Seattle property transaction before the sale because such a sale was a\nnonroutine transaction that significantly affected the trust estate and the beneficiaries\'\ninterests. Allard, 99 Wash.2d at 403-05, 663 P.2d 104; cf. In re Estate of Ehlers, 80 Wash.App.\n751, 758-59, 911 P.2d 1017 (1996). (holding that a trustee does not breach her duty of care in\nfailing to provide timely mandatory accounting when the trustee eventually provides\naccounting and the untimeliness does not cause any loss to any beneficiary).\n\xc2\xb6 19 Here, Diane had a duty to inform John about matters that would significantly\naffect his interests. But unlike in Allard in which selling the only trust asset significantly\naffected the beneficiaries\' interest, providing Elmer\'s care was a routine practice to fulfill the\ntrust\'s primary purpose, which, therefore, did not significantly affect John\'s remainder\ninterest. In fact, the trust specifically gave Diane authority to \xe2\x80\x9cprovide as much of the\nprincipal and net income of my trust as is necessary or advisable, ,in [her] sole and absolute\ndiscretion, for my health, support, maintenance, and general welfare.\xe2\x80\x9d CP at 36. John could\nalso reasonably expect that his ailing father, declared incompetent by two physicians and\naged 95 at the time of his death, would require full-time care, which care could consume\nsubstantial portions, if not all, of the trust\'s assets.\n\xc2\xb6 20 Because the trust clearly provided for Diane to spend any amount of trust assets\nto care for Elmer, John suffered no loss whether Diane planned to defer the costs and\ncompensate herself in the future or hire a care giver who she paid during Elmer\'s lifetime; he\ncould reasonably expect those types of expenses on behalf of his incompetent and\ndependent father and he knew that the trust provided that Diane could pay for those\nexpenses in her sole discretion. We hold that Diane had a duty to inform John about\n352\n\n\x0csignificant matters that affected his beneficial interest in the estate assets but that she did not\nbreach her fiduciary duty in failing to inform John about how she was managing the routine\nexpenses associated with Elmer\'s care, as John was not prejudiced by her conduct. Nor did\nDiane breach her duty to inform John of her management of the Ilwaco property when,\nwithout telling John, she decided not to encumber the Ilwaco house for the cost of their\nfather\'s care.\n\xc2\xb6 21 The trust divided the remaining estate assets equally to Diane and John in\n9/20th shares, with the Ilwaco home left to Diane \xe2\x80\x9cas part of, and not in addition to \xe2\x80\x9d her\n9/20th share. CP at 46 (emphasis added)**1234 (capitalization omitted). If the value of the\nhouse exceeded Diane\'s 9/20th share of the remaining estate, Diane had the option of\npurchasing the house for any amount of value exceeding her 9/20th share of the entire\nestate, in effect, giving John cash payment for his interest in the estate. If Diane declined to\npurchase the house, the property would pass as if Elmer had died intestate.\n\xc2\xb6 22 It is inconsequential whether Diane took the money from the trust during her\nfather\'s lifetime and encumbered the house at that time to pay herself or whether she\ndeferred her claim for reimbursement and refrained from encumbering the house. Diane and\nJohn each had a remainder interest in the estate. If Elmer\'s needs during his lifetime\nexceeded the trust\'s liquid funds, Diane would necessarily have had to encumber the Ilwaco\nhome to pay his additional expenses. If the liquid trust funds were depleted, John and Diane\nwould be entitled to a 9/20th share of the remainder of their father\'s estate, here, the Ilwaco\nhouse, and Diane could purchase the house and pay John his 9/20th interest. Thus,\ndepleting the trust\'s liquid funds during her father\'s lifetime or delaying her payment until\nafter his death did not change the fact that, with those funds depleted, Diane would have\nonly the option to purchase the house.\n\xc2\xb6 23 Further indication that John did not suffer any prejudice is that he failed to\nobject to Diane\'s decisions at any point before Elmer\'s death, even though he had reason to\nknow that she was maintaining the Ilwaco home, that she was Elmer\'s care giver, and that\nshe would charge the estate for her care giving. John lived on property adjoining Elmer\'s\nIlwaco home and saw Elmer visit when Diane took him there. Diane also generally\nmaintained the Ilwaco home and undertook repairs for water damage.\n\xc2\xb6 24 John also was on inquiry notice that Diane would charge the estate for caring\n353\n\n\x0cfor Elmer, as she had absolute authority to pay for his \xe2\x80\x9chealth, support, maintenance, and\ngeneral welfare.\xe2\x80\x9d CP at 36. The trust had paid a nurse to care for Elmer before Diane took\nhim into her home and care. When Diane started caring for him, it was certainly foreseeable\nthat she would reasonably charge for the personal services she rendered. But John never\ntook care of his father and never inquired about whether Diane was going to charge the\nestate for her care. John\'s failure to object, even though he had reason to know that Diane\nwas caring for Elmer and that she would reasonably charge the estate for her services, belies\nhis assertion now that he suffered harm as a result of her decisions.\n\xc2\xb6 25 We hold that Diane did not have a duty to inform John that she decided to\nclaim and defer charges against Elmer\'s estate. Nor did she owe him a duty to inform him\nthat she decided to refrain from encumbering the Ilwaco home to pay for Elmer\'s care.\nII. CARE\xe2\x80\x93GIVING COMPENSATION\n\xc2\xb6 26 Diane next argues that under both the trust and the applicable statutory\nauthority, she had authority to pay herself \xe2\x80\x9cas trustee\xe2\x80\x9d for providing Elmer\'s care. Br. of\nAppellant at 17, 29. Although Diane conflates being compensated as a trustee with being\ncompensated as Elmer\'s care giver, we agree that she can recover her care-giving expenses\nfrom the trust.\n\xc2\xb6 27 Diane\'s confusion arises from the following trust language:\nMy trustee shall pay itself reasonable compensation for its services as a fiduciary\nas provided in this agreement, and shall reasonably compensate those persons\nemployed by my Trustee, including agents, auditors, accountants, and attorneys.\nCP at 68. Diane understands this language to mean that a trustee may be paid reasonable\ncompensation for fiduciary services, and she assumes that personal care giving is within the\nscope of a trustee\'s services. Her understanding ignores the language \xe2\x80\x9cas fiduciary,\xe2\x80\x9d which\ndistinguishes Diane\'s ability to pay herself in her fiduciary capacity from paying those who\nshe employs. CP at 68. Diane conflates her dual role. On one hand, she was a trustee, with\nduties that included managing trust funds for Elmer\'s benefit and managing his needs. On\nthe other, she was Elmer\'s care giver.\n\xc2\xb6 28 A fiduciary is \xe2\x80\x9crequired to act for the benefit of another person on all matters\nwithin the scope of their relationship ... who must exercise a high standard of care in\n354\n\n\x0cmanaging another\'s money or property.\xe2\x80\x9d Black\xe2\x80\x99s Law Dictionary 702 (9th ed. 2009). While\nmanaging Elmer\'s trust funds, managing his personal affairs, and managing his other needs\nwere within the scope of Diane\'s fiduciary duties as his trustee, actually providing Elmer\'s\npersonal care was not.\n\xc2\xb6 29 Diane\'s confusion of her dual roles is not fatal, however, as the trust also\nrequires her to \xe2\x80\x9creasonably *793 compensate those persons [she] employ[s].\xe2\x80\x9d CP at 68. If\nDiane had hired a full-time nurse to provide Elmer\'s health care, the trust would have\nrequired her to use trust funds to reasonably compensate the nurse. Notably, the trust does\nnot prohibit Diane from compensating herself as an employee in addition to her role as\ntrustee. The trust\'s only requirement is that the compensation be \xe2\x80\x9creasonable.\xe2\x80\x9d CP at 68. We\nhold that Diane, as trustee, could compensate herself as an employee who provided for\nElmer\'s personal needs.\n\xc2\xb6 30 In addition to Diane\'s reasonable expenses related to caring for Elmer, she is\nalso entitled to reasonable compensation for her services as trustee. The trial court awarded\nher $5,000 for her services as trustee. She does not challenge this finding on appeal;\ntherefore, we do not disturb that award. We hold that Diane is entitled to reasonable\ncompensation as Elmer\'s caregiver and remand to the trial court to evaluate\nthe reasonableness of the costs of the services she rendered in providing his care.\nIII. REPAIR OF PROPERTY\n\xc2\xb6 31 Diane next contends that the trial court erred in subtracting $10,000 from the\nroughly $20,000 she spent to repair and remodel the Ilwaco house kitchen. We agree that\nthere was no reason to deduct this expenditure, as it was within her discretion to make.\n\xc2\xb6 32 Under the trust\'s express language, Diane could \xe2\x80\x9chold property which is nonincome producing ... if the holding of such property is, in the sole and absolute discretion of\n[Diane], in the best interests of the beneficiaries.\xe2\x80\x9d CP at 71. Diane also, had authority to take\nany action \xe2\x80\x9creasonably necessary for the preservation of real estate and fixtures comprising a\npart of the trust property.\xe2\x80\x9d CP at 74. Based on the trust\'s plain language, Diane had authority\nnot only to keep the Ilwaco house but also to preserve it and its fixtures.\n\xc2\xb6 33 Webster\'s defines \xe2\x80\x9cpreservation\xe2\x80\x9d as \xe2\x80\x9cthe act of preserving or the state of being\npreserved,\xe2\x80\x9d and it defines \xe2\x80\x9cpreserve\xe2\x80\x9d as \xe2\x80\x9cto keep safe from injury, harm, or destruction ... to\n355\n\n\x0ckeep alive, intact, in existence, or from decay.\xe2\x80\x9d WEBSTER\'S THIRD NEW\nINTERNATIONAL DICTIONARY 1794 (2002). In the context of real estate, the plain\nmeanings of \xe2\x80\x9cpreservation\xe2\x80\x9d and \xe2\x80\x9cpreserve\xe2\x80\x9d indicate that Diane could not only maintain the\nIlwaco house, but also could use trust funds to improve the house. Preserving a house\nentails keeping it as an appreciating asset.\n\xc2\xb6 34 Here, even though Elmer was only visiting from time-to-time, the costs\nassociated with maintaining the property contributed to its valuation\'s increase from $90,000\nin 2001 to $217,000 in 2007. This increase reflects the reasonableness of expending trust\nfunds to maintain the asset, possibly for future use if it had to be sold or mortgaged to\nprovide funds to care for Elmer. Therefore, under the express trust language, we hold that\nDiane had authority to repair water damage and to remodel the kitchen and the trial court\nerred in reducing her interest in the remaining estate by $10,000.\nIV. CONCLUSION\n\xc2\xb6 35 Diane did not breach any duty to inform John of how she was managing their\nfather\'s trust estate because his lack of knowledge did not cause him prejudice. She is\ntherefore entitled to reasonable compensation for her fiduciary actions as well as her\npersonal care of their father. We affirm the trial court\'s approval of the $59,176.67 Diane\nused of the liquid trust funds during Elmer\'s life for her personal care and, although the trial\ncourt may have found Diane\'s accounting of her personal care expenses adequate, the court\ndid not determine whether the total of her claimed expenses were \xe2\x80\x9creasonable.\xe2\x80\x9d Accordingly,\nwe remand to the trial court to reexamine and determine whether her remaining claimed\nexpenses were reasonable and to award her further compensation for personal care she\nprovided, in accord with the terms of the trust.\n\xc2\xb6 36 We hold that Diane is entitled to funds she spent to repair and remodel the\nIlwaco kitchen after water damage. And we hold that the trial court properly used the 2007\nappraised value of $217,000 for the Ilwaco house.\nReversed and remanded.\nProblems\n1. Henry\xe2\x80\x99s will stated, \xe2\x80\x9cI leave the residue of my estate to Carrie in trust to provide for the\neducation of my nieces, Creola and Pandora. I trust Carrie completely, so she does not have\n356\n\n\x0cto keep any accounts.\xe2\x80\x9d A few years after Carrie assumed her duties as trustee, Creola\nsuspected that Carrie was misappropriating the trust funds. Thus, Creola filed an action for\nan accounting. In response, Carried stated that she was not required to give an accounting.\nWhat result?\n2. During his marriage Kevin had an affair that resulted in the birth of a child, Camille.\nKevin\xe2\x80\x99s wife, Bertha, knew about Camille, but Kevin\xe2\x80\x99s and Bertha\xe2\x80\x99s child, Zeno was not\naware that she had a half-sister. In his will, Kevin left his entire estate in trust for the benefit\nof Camille and Zeno. After Kevin died, his business partner, Mateo, assumed his role as\ntrustee. When Zeon discovered that her father had left Camille trust money, she became\nsuspicious. Hence, she asked Mateo to see a copy of the trust instrument. Mateo complied\nwith Zeno\xe2\x80\x99s request, but he redacted the portions of the trust instrument referring to\nCamille. Zeno filed an action claiming that Mateo had violated his duty to inform. What\nresult?\n3. Gary\xe2\x80\x99s will stated, \xe2\x80\x9cI leave my entire estate to Max in trust for the benefit of my wife,\nDena. If Dena\xe2\x80\x99s remarries, the remaining trusts funds are to be held in trust for the benefit\nof the Animal Rights Society.\xe2\x80\x9d After Gary died, Max assumed his role as trustee. Two years\nafter Gary died, Dena married Curtis. However, Max continued to give Dena money out of\nthe trust. Seven years later, the director of the Animal Right\xe2\x80\x99s Society discovered that Dena\nhad been remarried for over nine years. The director sued Max to recover the trust money\nhe wrongfully paid to Dena. Max responded by pointing out that he had fulfilled his duty to\naccount and inform because he informed the director of all the payments he made to Dena.\nAccording to Max, since the director did not object to his accountings in a reasonable time,\nhe was not liable for breaching any of his trust duties. What result?\n4. Theresa was suffering from mild memory loss. Thus, Byron, Theresa\xe2\x80\x99s husband,\nestablished a trust for her benefit. According to the terms of the trust, the trustee was to\nprovide enough money to support Theresa. After Bryon died, the Main Bank assumed its\nrole as trustee. The Main Bank gave yearly accountings. Theresa signed off on all the\naccountings. Later, Theresa\xe2\x80\x99s friend suspected that Main Bank was not paying enough to\nsupport Theresa. Thus, the friend hired a lawyer for Theresa to sue Main Bank for violating\nits duty to support Theresa. What result?\n\n357\n\n\x0c12.3 The Trustee\xe2\x80\x99s Liability\nIn re Wilson, 930 N.E.2d 646\nBAKER, Chief Judge.\nThe trust at issue herein held certain real estate that the settlor intended to be sold,\nwith the proceeds to be distributed to the beneficiaries. For a time, the trustee delayed selling\nthe real estate for valid reasons. He continued to delay to sell the property, however, until\nover a year past the point at which those reasons no longer existed. His inaction constituted\na breach of fiduciary duty. His breach may have caused the corpus of the trust to suffer\nsignificant financial harm, and his general reluctance and/or refusal to communicate with the\nbeneficiaries forced them to resort to litigation to find that out. Under these circumstances,\nwe find that the trial court did not err by ordering the trustee to pay the beneficiaries\'\nattorney fees, by reducing the requested trustee fees, or by reducing the amount of the\ntrustee\'s attorney fees to be borne by the trust.\nAppellant-respondent Fred Monroe Wilson (Trustee) appeals the trial court\'s order\nentering judgment in favor of appellees-petitioners Marcia Wilson Barker (Marcia), Carol\nPerrine (Carol), Nicholas Barker (Nicholas), Christopher Barker (Christopher), and Sarah\nBarker (Sarah) (collectively, the Objecting Beneficiaries) sustaining the Objecting\nBeneficiaries\' objections to the Trustee\'s final accounting. The Trustee argues that the trial\ncourt erred by (1) finding that the Trustee committed multiple breaches of fiduciary duty; (2)\nordering the Trustee to pay the attorney fees of the Objecting Beneficiaries; (3) reducing the\nfiduciary fees requested by the Trustee from $140,000 to $75,000; and (4) ordering that a\nportion of the Trustee\'s attorney fees be paid by the Trustee personally.\nWe find that the Trustee breached duties owed to the Objecting Beneficiaries and\nthat the trial court properly ordered the Trustee to pay the Objecting Beneficiaries\' attorney\nfees, reduced the Trustee\'s requested fiduciary fees, and ordered that the Trust only be\nresponsible for a portion of the Trustee\'s attorney fees. We also find, however, that it was\nerror to order that the Trustee bear the remaining portion of his attorney fees personally.\nTherefore, we affirm in part and reverse in part.\nFACTS\nOn May 15, 1997, Elizabeth F. Wilson executed a Revocable Trust (the Trust).\n358\n\n\x0cElizabeth\'s three children\xe2\x80\x94the Trustee, Marcia, and Carol\xe2\x80\x94are the Majority Beneficiaries of\nthe Trust, receiving a combined 89.75% interest therein. Elizabeth\'s nine grandchildren,\nincluding Nicholas, Christopher, and Sarah, share the remaining 11.25% interest equally. The\nTrustee was Co\xe2\x80\x93Trustee with Elizabeth until she died on July 31, 2005, at which time he\nbecame the sole Trustee.\nThe Property\nAt the time of Elizabeth\'s death, the Trust held the following assets: (1) tangible\npersonal property, the distribution of which was governed by a list that had been prepared\nby Elizabeth and incorporated into the Trust; (2) a checking account and an investment\naccount; and (3) an 82.795% ownership interest as a member of Wilson\xe2\x80\x93Hussey Lane, LLC\n(the LLC).\nThe LLC\'s primary asset was approximately 17.5 acres of real estate located in\nCarmel (the Real Estate). The Trustee became the Manager of the LLC at the time of\nElizabeth\'s death.\nAt the time of Elizabeth\'s death, the Majority Beneficiaries also owned, as tenants in\ncommon, Elizabeth\'s former residence in Carmel (the TIC Property), which is adjacent to\nthe Real Estate. The TIC Property held, among other things, the tangible personal property\nincluded in the Trust.\nThe Loans\nAlmost immediately after Elizabeth\'s death, the Trustee was faced with issues\nregarding the payment of real estate taxes and other necessary expenses on behalf of the\nLLC and the TIC Property. During her lifetime, Elizabeth had personally paid these\nobligations. The Trustee presented Marcia and Carol with options as to how to handle those\nexpenses but did not receive a response. The Trustee was concerned about protecting the\nTrust\'s tangible personal property located in the TIC Property and the Trust\'s interest in the\nReal Estate owned by the LLC. Accordingly, the Trustee facilitated the payment of TIC\nProperty and LLC expenses from the Trust\'s assets and accounted for and verified those\npayments as loans totaling over $100,000 made by the Trust. Although the Trustee had no\npromissory notes documenting the loans, he accounted for all payments in his Final\nAccounting.\n359\n\n\x0cThe Fire\nThe Trust\'s tangible personal property was sorted and inventoried by the Trustee to\nfacilitate distribution to the Majority Beneficiaries pursuant to Elizabeth\'s list. The Trustee\nalso obtained an appraisal of the property. On November 17, 2005, the Majority\nBeneficiaries met and the majority of the Trust\'s tangible personal property was distributed\nat that time.\nOn January 23, 2006, the Objecting Beneficiaries filed a Petition for a Trust\nAccounting.\nOn March 16, 2007, the TIC Property and remaining undistributed portion of the\nTrust\'s personal property were destroyed as the result of a fire. The Majority Beneficiaries\nsubmitted an insurance claim and received insurance proceeds for the damage to the\nresidence and the property therein.\nThe Real Estate\nThe Trust\'s primary asset was the Real Estate, and the Majority Beneficiaries desired,\nultimately, to sell the Real Estate and the adjacent TIC Property as a single parcel. Pursuant\nto his fiduciary duty to handle all transfer tax matters arising from the Trust\'s assets, the\nTrustee obtained an appraisal of the Real Estate and a valuation opinion from a certified\nvaluation analyst to propose a discounted fair market value of the Trust\'s ownership interest\nin the LLC, primarily due to the lack of marketability in that interest.\nThe Trustee was concerned that the Trust would have to pay an additional 47%\nfederal estate tax on proceeds received in excess of the appraisal value if the Real Estate was\nsold prematurely. Additionally, the Trustee was counseled not to sell the Real Estate before\nthe insurance claim stemming from the fire at the TIC Property was resolved. Therefore, the\nTrustee decided not to distribute the Trust\'s LLC units to the beneficiaries or market the\nReal Estate for sale until the audit review of the Trust\'s federal estate tax and Indiana\ninheritance tax returns were finalized and the insurance claims were resolved. The IRS issued\na clearance letter in January 2007, the Indiana Department of Revenue issued a clearance\nletter in May 2007, and the insurance claim was satisfied in August 2007. Shortly thereafter,\nthe Majority Beneficiaries met to discuss the sale of the Real Estate, at which time the\nTrustee agreed that he would begin to compile marketing packets and begin the process of\n360\n\n\x0cselling the Real Estate. The Trustee did not begin marketing the Real Estate for sale until\nJuly 2008, a few weeks before a scheduled July 29, 2008, hearing on the Objecting\nBeneficiaries\' objections to the Final Accounting.\nThe Final Accounting\nOn March 4, 2008, the Trustee filed the Final Accounting and in March and April 2008,\nthe Objecting Beneficiaries filed objections to the Accounting. Following a hearing that\nconcluded on September 19, 2008, the parties stipulated that the Final Accounting met the\nburden required under Indiana Code section 30-4-5-13 (a), meaning that the burden of\npersuasion regarding the alleged instances of impropriety shifted to the Objecting\nBeneficiaries. On July 6, 2009, the trial court entered an order sustaining many of the\nObjecting Beneficiaries\' objections. Among other things, the trial court found and concluded\nas follows:\n\xe2\x80\xa2 The Trustee\'s use of Trust funds to pay TIC Property expenses constituted\nimproper commingling of assets and was a breach of trust. The trial court\nspecifically found fault with the lack of documentation that the payments made\nfrom the Trust were loans.\n\xe2\x80\xa2 The Trustee\'s decision to loan Trust Assets to the TIC Property and the LLC\nwithout documenting the loans violated the Statute of Frauds.\n\xe2\x80\xa2 The loans to the TIC Property and the LLC without approval of the beneficiaries\nor a court order constituted self-dealing and improper conflict of interest, resulting\nin a breach of trust.\n\xe2\x80\xa2 The delay in the sale of the Real Estate constituted a violation of the Trustee\'s\nduty to preserve trust property and make trust property productive.\nAppellant\'s App. p. 11\xe2\x80\x9325.\nHaving found those breaches of duty, the trial court ordered the Trustee to pay the\nattorney fees of the Objecting Beneficiaries, which totaled $50,375. Although the Trustee\nrequested trustee fees totaling $140,000, the trial court ordered that he receive only $75,000\nbecause of the multiple breaches of duty. Furthermore, much of the time for which he\nrequested payment was spent defending against the objections, which he precipitated and\n361\n\n\x0cwhich would not otherwise have been necessary to administer the trust. Finally, the trial\ncourt found that the Trustee\'s attorney fees, totaling $280,000, were reasonable but that the\nEstate should not have to bear the entire burden of those fees because the Trustee\'s failure\nto communicate with his family caused much of the litigation, and the fees would not\notherwise have been necessary to administer the trust. Thus, the trial court ordered that the\nEstate pay $175,000 of the Trustee\'s attorney fees, with the remainder to be borne by the\nTrustee personally. The Trustee now appeals.\nDISCUSSION AND DECISION\nI. Standard of Review\nWhen, as here, the trial court has entered an order containing findings of fact and\nconclusions of law, we apply a two-step review. First, we consider whether the evidence\nsupports the findings, and second, whether the findings support the judgment. Hardy v.\nHardy, 910 N.E.2d 851, 855 (Ind. Ct. App. 2009). We will neither reweigh the evidence nor\nassess witness credibility, considering only the evidence most favorable to the judgment. Id.\nWe will set aside the trial court\'s findings and conclusions only if they are clearly erroneous,\nthat is, if the record contains no facts or inferences supporting them. Id. We apply a de novo\nstandard of review to conclusions of law. Id.\nII. Breach of Trustee\'s Duties\nA trust is \xe2\x80\x9ca fiduciary relationship between a person who, as trustee, holds title to\nproperty and another person for whom, as beneficiary, the title is held.\xe2\x80\x9d Ind. Code \xc2\xa7 30-4-11(a). A breach of trust is \xe2\x80\x9ca violation by the trustee of any duty that is owed to the settlor or\nbeneficiary.\xe2\x80\x9d Ind. Code \xc2\xa7 30-4-1-2(4).\nGenerally, a trustee bears the burden of justifying the propriety of items in a trust\naccount. Matter of Willey\xe2\x80\x99s Trust, 443 N.E.2d 1191, 1193 (Ind.Ct. App. 1982). But when, as\nhere, a trustee files specific accounts and makes a prima facie showing that the accounts are\nproper, the burden of persuasion shifts to the beneficiaries to show specific instances of\nimpropriety. Id. at 1193-94.\nSolely for argument\'s sake, we will assume that the Trustee is correct that his\ndecision to loan money from the Trust to the LLC and the TIC Property was not a breach\nof duty. We will turn immediately, therefore, to the trial court\'s conclusion that the Trustee\'s\n362\n\n\x0cdecision to delay the sale of the Real Estate breached his duties to preserve the trust\nproperty and make the trust property productive for both the income and remainder\nbeneficiaries.\nThe record here reveals that the Trustee elected to wait to sell the Real Estate until\nhe received clearance letters from federal and state government agencies in an effort to avoid\nincurring substantial additional transfer tax liability. Furthermore, he elected to wait to sell\nthe Real Estate until the insurance claim on the TIC Property was processed in an effort to\nensure that the Majority Beneficiaries received the full amount of their claims. We find that\nthese actions were prudently taken, well considered, and taken upon the advice of counsel.\nThat said, we agree with the trial court\'s implicit conclusion that while the Trustee\nwas waiting for the clearance letters and the settlement of the insurance claim, he should\nhave begun the process of selling the property by, among other things, taking steps to find\npotential buyers and putting together marketing information about the property. Even more\ncompelling, the insurance claim had been settled and all clearance letters received by August\n2007, but it was not until July 2008, more than a full year after receiving the last tax clearance\nletter and shortly before a scheduled court hearing, that the Trustee began marketing the\nReal Estate for sale. He could point to no significant steps he had taken during the\nintervening months to prepare to sell the Real Estate.\nAlthough the Trustee is correct that the Trust does not mandate the Trustee to sell\nany asset, it is evident from the way in which the Trust is structured that Elizabeth intended\nthat the Trust assets be relatively quickly distributed and/or sold. Moreover, the Objecting\nBeneficiaries made it abundantly clear to the Trustee starting in August 2005 that they\ndesired a quick wrap-up of the Trust and hoped that the Real Estate would be sold in a\ntimely fashion. Although we find that the Trustee\'s decision to delay the sale until after the\ntax clearance letters were received and the insurance claim was settled was prudent and did\nnot constitute a breach of fiduciary duty, we agree with the trial court\'s conclusion that his\nfailure to prepare the Real Estate for sale during the waiting period and the extra delay of\nover one year after the clearance letters were received was a breach of his fiduciary duties to\ncomply with the settlor\'s intent and to preserve the value of the Trust property.\nThe Trustee notes that the Trust does not actually own the Real Estate. Instead, it\nowns a majority interest in the LLC, a separate entity, which owns the Real Estate. The\n363\n\n\x0cTrustee argues that he could not have a duty to sell an asset the Trust does not actually own.\nWe find this to be a distinction without a difference. He is both the Trustee of the Trust and\nthe Manager of the LLC. Regardless of which proverbial hat he was wearing, it was his\nresponsibility to sell the Real Estate or, at least, the Trust\'s interest in the Real Estate. Thus,\nwe do not find this argument to be compelling.\nIII. Damages\nAlthough the trial court did not award any specific damages to the Objecting\nBeneficiaries based upon the Trustee\'s breaches, it ordered the Trustee to pay the Objecting\nBeneficiaries\' attorney fees, reduced the fees requested by the Trustee, and ordered the\nTrustee to pay a portion of his attorney fees personally. The Trustee argues that all of these\nactions were erroneous.\nIf a trustee commits a breach of trust, the trustee is liable to the beneficiaries for: (1)\nany loss or depreciation in the value of the trust property as a result of the breach; (2) any\nprofit made by the trustee through the breach; (3) any reasonable profit which would have\naccrued on the trust property in the absence of a breach; and (4) reasonable attorney\'s fees\nincurred by the beneficiary in bringing an action on the breach. I.C. \xc2\xa7 30-4-3-11(b). If the\ntrust is not harmed by any breach of trust committed by the trustee, the beneficiaries may\nnot complain of the breach of trust. Gavin v. Miller, 222 Ind. 459, 467, 54 N.E.2d 266, 280\n(1944).\nHere, the trial court found that the Objecting Beneficiaries failed to offer evidence\nestablishing that they suffered a financial harm\xe2\x80\x94i.e., that the Real Estate depreciated in\nvalue during the delay\xe2\x80\x94as a result of the Trustee\'s breach. The only evidence in that regard\ncame from the testimony of Marcia, who is not an expert but testified that in her personal\nopinion, the real estate market in Indiana was not as good as it had been three years earlier.\nThe trial court determined that Marcia\'s testimony was insufficient to establish damages, and\nwe agree with that conclusion.\nAlthough we conclude that the Trust corpus, itself, suffered no harm as a result of\nthe Trustee\'s breach, the Trustee\'s actions, including a general reticence or refusal to\ncommunicate with the Objecting Beneficiaries, compelled the Objecting Beneficiaries to\nsolve these problems in court. Put another way, the Trustee\'s behavior forced the Objecting\n364\n\n\x0cBeneficiaries to enlist the aid of attorneys and a trial court to determine that, in fact, they had\nnot sustained financial harm as a result of his inaction. Under these circumstances, we find\nthat the trial court did not err by ordering the Trustee to pay the Objecting Beneficiaries\'\nattorney fees or by reducing the fees the Trustee requested based upon the breach of duty.\nAs for the Trustee\'s attorney fees, we likewise find that the trial court did not err by\nordering that the Trust pay only $175,000 of those fees. To the extent that the trial court\nordered the Trustee to personally pay the remainder of his attorney fees, however, we\ndisagree. Neither the trial court nor we have jurisdiction over the relationship between the\nTrustee individually and his attorneys. The way in which the Trustee\'s attorneys choose to\ncollect the remainder of their fees, if at all, is not at issue in this proceeding, and we reverse\nthe trial court\'s order to the extent that it orders the Trustee to bear that burden personally.\nThe judgment of the trial court is affirmed in part and reversed in part.\nREVIEW\nThe following fact pattern is included as a means of reviewing all of the issues that\narise in a trust transaction. In particular, the student should focus upon identifying all of the\nbreaches of trust duties.\nCollaborative Learning Exercise\nA codicil to Judy\xe2\x80\x99s will established a trust naming her brother, Richard, as the life\ntime beneficiary. The will directed the trustee to terminate the trust, upon Richard\xe2\x80\x99s death,\nand distribute the balance of the principal and accumulated income to Judy\xe2\x80\x99s three children,\ntheir heirs and assigns.\nThe only asset placed in the trust was an installment real estate contract executed\nbetween Judy and Howard in 1992 for the sale of three multi-family dwellings. Under the\ninstallment contract, Howard was to purchase the three properties for $250.000. The three\nparcels of real estate were commonly known as 155 Third Avenue South, 215 Turtle Lane,\nand 122 Madison Street North. The three parcels contained twenty apartment units.\nThe trust instrument also directed the trustee to use $250,000 of the funds in the\nestate to acquire additional rental property to add to the corpus of the trust. Judy\xe2\x80\x99s will\n\n365\n\n\x0cdirected the trustee to pay Richard during his lifetime \xe2\x80\x9cmonthly, all of the net income of the\ntrust, or $3000.00, whichever is greater.\xe2\x80\x9d\nDuring her life time, Judy had a management company to maintain the rental\nproperty. At that time, the property was considered to be in good condition. Judy died in\n1995. A few months later, the trustee, Benjamin Taylor, accepted the duty of trustee.\nBenjamin immediately began making monthly payments to Richard.\nBenjamin took the $250,000 from the estate and placed it in his savings account\nwhile he looked for rental property to purchase. Benjamin did not have experience in real\nestate investment, so he asked his friend, Katherine, a real estate broker, to find property to\npurchase. Katherine identified several properties and mailed Benjamin information on them.\nSix months later, Benjamin met Katherine for lunch and told her that he did not\nhave time to sift through information about real estate. Benjamin gave Katherine a blank\ncheck written on his account, and told her to buy the property that she felt was most\nsuitable. His only condition was that Katherine purchase property with high income return.\nHe stated, \xe2\x80\x9cI don\xe2\x80\x99t care what the property is worth in 10 years. Richard needs the money\nnow.\xe2\x80\x9d\nKatherine purchased a four-unit apartment building located at 1022 Weaver Street\nfor $200,000. Benjamin recorded the title to the Weaver Street property in his name. He\ntransferred $200,000 from his savings account into his checking account to cover the\npurchase price. He left the remaining $50,000 trust money in his savings account. At the\ntime of the purchase the fair market value of the Weaver Street property was $150,000. The\nneighborhood was revamped and the market value of the property steadily increased.\nBenjamin made income payments to Richard out of the rents the trust received from the\nWeaver Street property.\nIn 1999, Howard assigned his interest in the real estate contract to Larry. A few\nmonths later, Larry assigned his interest to Benjamin\xe2\x80\x99s daughter, Susan. The contract called\nfor monthly payments of $7500, and obligated Susan to make timely payments of taxes and\ninsurance. She was required to keep the property in good repair. When the properties were\nsold to Susan, Benjamin did not personally inspect them. In addition, at that time, neither an\nofficial inspection nor appraisal was made on the properties.\n366\n\n\x0cWhen Susan purchased the properties, the Third Avenue and Turtle Lane properties\nwere deteriorating. Susan made no efforts to improve the properties. In March 2000, city\nhousing inspections began issuing notices of intent to \xe2\x80\x9cplacard\xe2\x80\x9d the dwellings for housing\nviolations. Five units of the Third Avenue property were deemed unfit for human habitation\nin July 2001; the entire building was cited for violations in April 2002. In September 2002,\nthe Turtle Lane property was placarded as uninhabitable due to problems ranging from\nmissing windows to leaking ceilings, exposed wiring and peeling paint. A storm blew the\nroof off of the Madison Street building, but it was never repaired. Benjamin received all of\nthe notices, but took no action to address the problems.\nSusan made the contract payments on time, but she failed to pay real estate taxes\nfrom 1999 to 2003. In April 2003, when Benjamin was notified of the tax delinquencies, he\ncontacted Susan and she promised to pay the back taxes. As a result of Susan\xe2\x80\x99s failure to pay\nthe back taxes, the Third Avenue, Turtle Lane, and Madison Street properties were sold at a\ntax sale in September 2003. Benjamin received the notices of the tax sale and expiration of\nthe right to redeem. Benjamin took no action to redeem the property and did not insist that\nSusan redeem the property.\nKatherine advised Benjamin that, if he sold the Weaver Street property, he would\nhave enough money to redeem and repair the three properties. Benjamin rejected\nKatherine\xe2\x80\x99s advice because rents from the Weaver Street property were sufficient for him to\npay Richard\xe2\x80\x99s monthly income. However, in February of 2004, a highway construction\nproject made the Weaver Street property undesirable as a rental property. The monthly rents\nreceived from the property decreased to $800. To cut back on expenses, Benjamin allowed\nthe fire insurance policy on the building to lapse. In October 2004, the Weaver Street\nproperty was destroyed by fire. In addition to the total property loss, the city assessed the\ndemolition costs against the trust.\nIn November 2004, Benjamin notified Richard that the trust\xe2\x80\x99s assets were depleted,\nand issued him a final monthly payment of $2000. Benjamin sold the Weaver Street lot for\n$50,000. After paying off outstanding liens and expenses, he issued a lump sum payment to\nRichard of $1500 in March 2005. Richard died in November 2005.\nJudy\xe2\x80\x99s three children did not find out about the dissolution of the trust until after\nRichard\xe2\x80\x99s death.\n367\n\n\x0cJudy\xe2\x80\x99s children have contacted your firm seeking advice about their rights and\nremedies. Please analyze the relevant legal issues that arise from the facts.\n\n368\n\n\x0cChapter 13 - Power of\nAppointments\nThe testator can leave property as a gift outright to a person or the testator can leave\nproperty to a person to hold in trust for another person. Finally, the testator can leave\nproperty to a person and give the person the authority to select the new owner of the\nproperty. That authority is called a \xe2\x80\x9cpower of appointment.\xe2\x80\x9d A power of appointment is the\nright to designate the new owner of property. A power of appointment is created by stating,\n\xe2\x80\x9cI leave my property to A in order that he may have the right to appoint the new owner.\xe2\x80\x9d\nIt is important to identify the parties to the transaction. The donor is the original\nowner of the property. If a trust is involved the donor is the settlor or the testator. The\nperson who receives the power of appointment is the donee. The donor remains the owner\nof the property until the donee exercises his power of appointment and names a new owner\nof the property. Objects of the power are the pool of potential new owners of the property.\nThe persons the donee appoints as the new property owners are called appointees. Even\nthough the donee designates the appointees as the new owners of the property, those\npersons take title to the property from the donor. The default takers are those persons who\ntake the property if the donee does not exercise the power of appointment. The property is\nreferred to as the appointive property. Consider the following example. In his will, Mandy\nstated, \xe2\x80\x9cI leave my house to my son, William for life. When William dies, the house will go\nto any one of my children William appoints as the new owner. If William does not appoint a\nnew owner of the house, the house will go to my cousin, Janice.\xe2\x80\x9d In the example, Mandy is\nthe donee; William is the donor; Mandy\xe2\x80\x99s children are the objects of the power; and Janice is\nthe default taker. In the event the donor does not name a default taker and the donee fails to\nexercise the power, the property reverts to the donor\xe2\x80\x99s estate. Once the property reverts to\nthe donor\xe2\x80\x99s estate, it goes to the takers of the donor\xe2\x80\x99s residuary estate.\nThe two main types of powers of appointment are the general power of appointment\nand the special power of appointment. When the donor creates a general power of\nappointment, he does not place any restricts or conditions on the donee\xe2\x80\x99s exercise of the\n369\n\n\x0cpower. Therefore, the donee can appoint the power to any one, including himself. There is\nno specific language needed to create a general power of appointment. The trustee just has\nto make sure that the exercise of the power is unrestricted. For instance the donor could\nstate, \xe2\x80\x9cI leave my house to Paul to give to any one that he chooses.\xe2\x80\x9d On the other hand, a\ndonor who creates a special power of appointment specifics certain individuals or groups as\nthe objects of the power or conditions the exercise of the power on certain factors. A special\npower cannot be exercised in favor of the donee, the donee\xe2\x80\x99s estate, the donee\xe2\x80\x99s creditors or\nthe estate of the donee\xe2\x80\x99s creditors. A special power of appointment is created when the\ndonor states \xe2\x80\x9cI leave my property to Ben to appoint to any one of my sisters that he so\nchooses.\xe2\x80\x9d Both the general and the special power of appointment may be inter vivos or\ntestamentary. An inter vivos power of appointment must be exercised during the donee\xe2\x80\x99s\nlife. The testamentary power of appointment must be exercised by the donee\xe2\x80\x99s will.\nNotes and Problems\n1. A special power of appointment may be exclusive or non-exclusive. If the power is nonexclusive, the donee may exclude entirely one of more objects of the power. Thus, the donee\nhas the option of appointing all the property to one member of the class of permissible\nobjects, and excluding the rest. When the case involves a non-exclusive power, the donee\nmust appoint some amount to each of the permissible objects. The illusory appointment rule\nrequires that each permissible object receives a substantial portion of the appointive\nproperty.\n2. Problems\na) Gus\xe2\x80\x99 will stated, \xe2\x80\x9cI leave the residue of my estate in trust for the benefit of Mae during her\nlife, the remainder as Mae shall appoint by will to any one or more of her children.\xe2\x80\x9d Mae\nhad four children, Bill, Sam, Gail, and Frank. Mae appointed all of the trust property to Gail.\nIs this permissible?\nb) Thomas\xe2\x80\x99 will stated, \xe2\x80\x9cI leave my house in trust for the benefit of Billy during his life, the\nremainder as Billy shall appoint by will to his children.\xe2\x80\x9d Billy had two children, Crystal and\nPolly. Billy appointed all of the trust property to Polly. Is this permissible?\nc) Penny\xe2\x80\x99s will stated, \xe2\x80\x9cI leave my apartment complex in trust for the benefit of Sandra for\nlife, the remainder as Sandra shall appoint my will to my sisters.\xe2\x80\x9d Penny had three sisters,\n370\n\n\x0cGloria, Evon and Emma. Sandra appointed all of the trust property to Sandra\xe2\x80\x99s daughter,\nJosie. Is this permissible?\n3. Problems\nIn which of the following cases has a power of appointment been created.\na) \xe2\x80\x9cI leave my ranch to Joe in order for him to decide to whom to give it.\xe2\x80\x9d\nb) \xe2\x80\x9cI leave my hotel to Joe for the benefit of any one of my sons that he chooses\nc) \xe2\x80\x9cI leave the residue of my estate to Joe, so that he can provide for my children.\xe2\x80\x9d\nd) \xe2\x80\x9cI leave my entire estate to Joe as long as he gives it to one of my nieces.\xe2\x80\x9d\ne) \xe2\x80\x9cI leave my art collection to Joe, so that he may appoint it to whomever he chooses.\xe2\x80\x9d\n4. In most jurisdictions, a power of appointment cannot be exercised in the residuary clause\nof a will. Instead of exercising the power of appointment, the donee can release the power.\nThe power has been released when the donee gives up the right to exercise the power by\nwritten instrument. Once the power is released the property goes to the default taker or\nreverts back to the donor\xe2\x80\x99s estate.\n\nDoggett v. Robinson, 345 S.W.3d 94\nWILLIAM J. BOYCE, Justice.\nRobert R. Doggett, Florence E. Pollard, Paul R. Doggett, Paul Randolph Doggett,\nJr., Mark Edward Doggett, and Matthew Joseph Doggett appeal the trial court\'s summary\njudgment in favor of Mary Robinson,*96 as independent executor of the estate of John M.\nRobinson. We reverse and remand.\nBACKGROUND\nI. John Doggett\'s Will\nJohn Doggett executed a will prepared by attorney John M. Robinson. John Doggett\nwas married to his second wife, Sylvia, when he executed the will in 1983. John had four\nchildren from his first marriage\xe2\x80\x94John III, Robert, Florence, and Paul. Sylvia had one child\nfrom a prior marriage\xe2\x80\x94Beverly Longuet.\nJohn\'s will directs that Sylvia receive his personal effects and distributes his\n371\n\n\x0cremaining assets to two trusts: the Unlimited Marital Deduction Trust (\xe2\x80\x9cMarital Trust\xe2\x80\x9d) and\nthe Family Trust. The will names John M. Robinson as the trustee of both trusts.\nThe will directs that Marital Trust income be paid to Sylvia during her lifetime, with\nthe principal available for her support if necessary. Section 3.4 of John\'s will grants Sylvia\ntestamentary power of appointment over the Marital Trust principal by \xe2\x80\x9cspecific reference\xe2\x80\x9d\nin Sylvia\'s will. John\'s will provides in section 3.6 that any unappointed Marital Trust assets\nwill be distributed upon Sylvia\'s death as specified.\nThe will also states that Family Trust assets may be distributed during Sylvia\'s\nlifetime to Sylvia or to John\'s descendants as necessary for their support. In section 4.3,\nJohn\'s will grants Sylvia a lifetime power of appointment over the Family Trust income and\nprincipal, as well as a testamentary power of appointment by \xe2\x80\x9cspecific reference\xe2\x80\x9d in her will.\nJohn\'s will states that the Family Trust will terminate \xe2\x80\x9cwhen my wife dies or when no child\nof mine is living and under age 40, whichever is later.\xe2\x80\x9d John\'s will directs any unappointed\nFamily Trust assets existing upon termination to be distributed according to the same\nschedule as the unappointed Marital Trust assets.\nWith respect to both the Marital Trust and the Family Trust, John\'s will places an\nexpress limitation on Sylvia\'s power of appointment. Section 3.4 of John\'s will, which\ngoverns the Marital Trust, states that Sylvia \xe2\x80\x9cshall not have the power to appoint trust\nprincipal to herself, her estate, her creditors or the creditors of her estate.\xe2\x80\x9d Section 4.3 of\nJohn\'s will, which governs the Family Trust, states that Sylvia \xe2\x80\x9cshall not appoint trust\nproperty to herself, her creditors, her estate, or the creditors of her estate.\xe2\x80\x9d\nJohn Doggett died in 1987. His will was probated, and Sylvia was appointed executor\nof his estate. It is alleged that neither trust was funded during Sylvia\'s lifetime or after her\ndeath. John M. Robinson died in 2002.\nII. Sylvia Doggett\'s Will\nSylvia executed a will in 2002. After she died in 2006, her will was admitted to\nprobate and Beverly was appointed executor of Sylvia\'s estate.\nThis appeal focuses in significant part on sections 2.1 and 2.4 of Sylvia\'s will. These\nsections provide as follows:\n\n372\n\n\x0c2.1 I give, devise and bequeath all of my property, real, personal and mixed, of\nevery kind and character and description, and wherever situated, and any other\nproperty over which I may have a power of appointment or power of\ntestamentary disposition, according to the provisions of this Article II.\n***\n2.4 I give, devise and bequeath all the rest, residue, and remainder of my estate\nand property to my daughter, Beverly Ann Longuet.\nSylvia\'s will also provides in section 2.3 for the distribution of Sylvia\'s personal\neffects, and makes three monetary bequests in section 2.2 to persons other than John\'s\nchildren, John\'s grandchildren, or Beverly.\nIII. Suit by John Doggett\'s Children and Grandchildren\nJohn\'s surviving children\xe2\x80\x94Robert Doggett, Florence Doggett Pollard, and Paul R.\nDoggett\xe2\x80\x94sued Beverly individually and in her capacity as executor of Sylvia\'s estate in 2007.\nThey alleged, among other things, that (1) Sylvia failed to establish and operate the trusts\nproperly; and (2) Beverly failed to provide an accounting of the assets in Sylvia\'s estate and\ninformation about assets that should have been used to fund the trusts. Three of John\'s\ngrandchildren\xe2\x80\x94Paul, Mark, and Matthew Doggett\xe2\x80\x94filed a petition in intervention. We refer\ncollectively to the original plaintiffs and intervenors as the \xe2\x80\x9cDoggett claimants.\xe2\x80\x9d\nThe Doggett claimants also sued Mary Robinson in her capacity as executor of John\nM. Robinson\'s estate. The Doggett claimants alleged that John M. Robinson accepted\nappointment as trustee of the Marital Trust and the Family Trust under John\'s will. They\nfurther alleged, among other things, that John M. Robinson failed to fulfill his obligations as\ntrustee; assisted Sylvia in taking assets belonging to the trusts; failed to require assets to be\nsegregated; made misrepresentations; and breached his fiduciary duties as trustee. The\nDoggett claimants contend that, as a result of this alleged conduct, Beverly improperly\nobtained trust property intended for them under John\'s will. The Doggett claimants sought\nactual damages, punitive damages, costs and attorney\'s fees, interest, the imposition of a\nconstructive trust, and declaratory relief.\nBeverly settled with the Doggett claimants on behalf of herself and Sylvia\'s estate in\n2008, leaving Robinson\'s estate as the only defendant.\n373\n\n\x0cRobinson\'s estate filed a traditional summary judgment motion under Rule 166a(c),\narguing that it was not liable to the Doggett claimants because Sylvia in her will properly\nexercised her power of appointment in favor of Beverly. The Doggett claimants also filed a\ntraditional summary judgment motion, arguing that (1) John\'s will authorized Sylvia to\nexercise her power of appointment only in favor of John\'s \xe2\x80\x9cdescendants\xe2\x80\x9d as that term is\ndefined in section 9.3 of John\'s will; and (2) Beverly is not among John\'s defined\n\xe2\x80\x9cdescendants.\xe2\x80\x9d\nThe trial court granted partial summary judgment in favor of Robinson\'s estate and\ndenied the Doggett claimants\' motion. The trial court held: \xe2\x80\x9cAs a matter of law, Sylvia\nDoggett validly exercised her power of appointment in favor of John Doggett\'s descendant,\nBeverly Longuet; and ... [b]ecause of the valid exercise of the power of appointment, [the\nDoggett claimants\'] claims fail as a matter of law.\xe2\x80\x9d The summary judgment was interlocutory\nbecause attorney\'s fees were not adjudicated.\nAfter a one-day bench trial, the trial court signed a final judgment on November 4,\n2009 that (1) incorporated its prior partial summary judgment; and (2) awarded attorney\'s\nfees to Robinson\'s estate. Robinson\'s estate filed a motion to modify the final judgment,\nwhich the trial court granted in part and denied in part. The trial court signed an amended\nfinal judgment on December 1, 2009, and the Doggett claimants timely appealed.\nANALYSIS\nThis appeal turns on the interplay between John\'s will and Sylvia\'s will. The Doggett\nclaimants contend that the trial court erred by denying their motion for summary judgment,\nand by granting summary judgment based on the trial court\'s conclusion that Sylvia properly\nexercised her power of appointment in favor of Beverly. In their first issue, the Doggett\nclaimants assert that Sylvia\'s will did not validly exercise the power of appointment under\nsections 3.4 and 4.3 of John\'s will. In their second issue, the Doggett claimants contend that\nBeverly is not among the defined \xe2\x80\x9cdescendants\xe2\x80\x9d to whom Sylvia was allowed to appoint\ntrust property under section 9.3 of John\'s will. They also challenge the award of attorney\'s\nfees in their third issue. Robinson\'s estate raises one issue on cross-appeal, arguing that the\ntrial court should have awarded costs and post-judgment interest in the final judgment.\nI. Standard of Review\n374\n\n\x0cAn appellate court applies de novo review to a traditional summary judgment under\nRule 166a(c), using the same standard that the trial court used in the first instance. Duerr v.\nBrown, 262 S.W.3d 63, 68 (Tex.App.-Houston [14 Dist.] 2008, no pet.) (citing Valence\nOperating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).\nThe defendant as movant must disprove at least one essential element of each of the\nplaintiff\'s causes of action in order to prevail on summary judgment., Wright v. Greensberg, 2\nS.W.3d 666, 670 (Tex.App.-Houston [14th Dist.] 1999, pet. denied) (citing Lear Siegler Inc. v.\nPerez, 819 S.W.2d 470, 471 (Tex. 1991)). This burden requires the movant to show that no\ngenuine issue of material fact exists and that the movant is entitled to judgment as a matter\nof law. Id. (citing Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985)). In\ndetermining whether a material fact issue exists to preclude summary judgment, evidence\nfavoring the nonmovant is taken as true, and all reasonable inferences are indulged in favor\nof the nonmovant. Id.\nII. Exercise of the Appointment Power\nAll rules of will construction must yield to the basic intention and purpose of the\ntestator as reflected by the entire instrument. Wright, 2 S.W.3d. at 672 (citing Shriner\xe2\x80\x99s Hosp.\nfor Crippled Children of Tex. V. Stahl, 610 S.W.2d 147, 151 (Tex. 1980)). The testator\'s intent\nmust be ascertained from the language used within the four corners of the instrument. Id.\nThe question is not what the testator intended to write, but the meaning of the words\nactually used Id.. In the absence of ambiguity, we must construe the will based on the express\nlanguage used. Id. If the court can give a certain or definite meaning or interpretation to the\nwords of an instrument, it is unambiguous and the court may construe it as a matter of law.\nId. (citing Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983)). If, however, the meaning of the\ninstrument is uncertain or reasonably susceptible to more than one meaning, it is ambiguous.\nId. at 671. If it is ambiguous, then its interpretation presents a fact issue precluding summary\njudgment. Id.\nA. Standards Governing Exercise of the Appointment Power\nThe interpretation issue addressed in this appeal focuses on a power of appointment.\nIt is helpful to describe at the outset what the power of appointment entails.\n\xe2\x80\x9cA power of appointment is a power of disposition given to a person over property\n375\n\n\x0cnot his own, by [someone] who directs the mode in which that power shall be exercised by a\nparticular instrument.\xe2\x80\x9d Republic Nat\xe2\x80\x99l Bank of Dallas v. Fredericks, 155 Tex. 79, 283 S.W.2d 39,\n46 (1955) (internal quotation omitted). \xe2\x80\x9cIt is an authority to do an act which the owner\ngranting the power might himself lawfully perform.\xe2\x80\x9d Id. (internal quotation omitted). This\npower enables the donee to designate, within such limits as the donor may prescribe, the\ntransferees of the property or the shares in which it shall be received. Id.\nIt also is helpful to describe what the power of appointment is not. \xe2\x80\x9cA power of\nappointment is neither property nor an estate, but is a mere right or power.\xe2\x80\x9d Krause v. Barton,\n430 S.W.2d 44, 47 (Tex.Civ.App.-Houston [1st Dist] 1968, writ. ref\xe2\x80\x99d nre). \xe2\x80\x9cThe authority\ngiven to the donee of a power of appointment does not vest in him any estate, interest, or\ntitle in the property which is the subject of the power.\xe2\x80\x9d Id.\nTo exercise the appointment power granted in sections 3.4 and 4.3 of John\'s will,\nSylvia\'s will \xe2\x80\x9cmust refer to the power of appointment or the property subject to such\npower;\xe2\x80\x9d alternatively, Sylvia \xe2\x80\x9cmust have owned no other property to which the will could\nhave attached and thus the will have been a vain and useless thing except it be held to be an\nexercise of such power.\xe2\x80\x9d Republic Nat\xe2\x80\x99l Bank of Dallas, 283 S.W.2d at 47. Robinson\'s estate\ndoes not rely on the second or third bases to argue that Sylvia validly exercised her power of\nappointment in favor of Beverly. Therefore, we address the reference in Article II of Sylvia\'s\nwill to a power of appointment and examine whether Article II validly exercises the power\ngranted in John\'s will.\nThe inquiry in this case goes beyond the mere existence of a reference to the\nappointment power. \xe2\x80\x9cThe general rule is that in order for a will or deed to constitute the\nexercise of a power of appointment*100 the intent to exercise such power must be so clear\nthat no other reasonable intent can be imputed under the will.\xe2\x80\x9d Id. \xe2\x80\x9c\xe2\x80\x98If, from the\ncircumstances or the instrument executed, it be doubtful as to whether it was the intention\nto execute the power possessed by the grantor, then it will not be held that by such act or\nconveyance that power was in fact executed.\xe2\x80\x99 \xe2\x80\x9d Id. (quoting Hill v. Conrad, 91 Tex. 341, 43\nS.W. 789, 791 (1897)).\nWe note another hurdle that must be cleared in this particular case. Sections 3.4 and\n4.3 of John\'s will provide that Sylvia\'s testamentary power of appointment over Marital Trust\nand Family Trust assets must be exercised by \xe2\x80\x9cspecific reference.\xe2\x80\x9d Robinson\'s estate contends\n376\n\n\x0cthat Sylvia exercised this power by \xe2\x80\x9cspecific reference\xe2\x80\x9d in sections 2.1 and 2.4 of Sylvia\'s will.\nThe Doggett claimants contend that Article II\'s reference to \xe2\x80\x9cany other property over which\nI may have a power of appointment\xe2\x80\x9d is not precise enough to be a \xe2\x80\x9cspecific reference.\xe2\x80\x9d\nWith these standards as a backdrop, we examine whether Sylvia\'s will validly\nexercised the appointment power granted in John\'s will.\nB. Application of the Standards to Sylvia\'s Will\nAccording to Robinson\'s estate, Article II of Sylvia\'s will exercised the appointment\npower granted to her in sections 3.4 and 4.3 of John\'s will. Robinson\'s estate contends in its\nappellate brief that Article II of Sylvia\'s will \xe2\x80\x9cbequeathed to her daughter \xe2\x80\x98any other property\nover which I may have a power of appointment.\xe2\x80\x99 \xe2\x80\x9d To make this argument, Robinson\'s\nestate reads sections 2.1 and 2.4 of Sylvia\'s will together.\nSection 2.1 states Sylvia\'s intent to give, devise, and bequeath \xe2\x80\x9call of my property ...\nand any other property over which I may have a power of appointment.\xe2\x80\x9d This language by\nitself does not appoint property to any identified recipient. Therefore, Robinson\'s estate\ncannot rely solely upon section 2.1 as the vehicle by which Sylvia appointed trust property to\nBeverly.\nRobinson combines this language from section 2.1 with language from a residuary\nclause in section 2.4 to formulate an appointment of trust property to Beverly. Section 2.4\nstates, \xe2\x80\x9cI give, devise and bequeath all of the rest, residue and remainder of my estate and\nproperty to my daughter, Beverly Ann Longuet.\xe2\x80\x9d\nThe formulation posited by the Robinson estate\'s brief\xe2\x80\x94under which Sylvia\n\xe2\x80\x9cbequeathed to her daughter \xe2\x80\x98any other property over which I may have a power of\nappointment\xe2\x80\x99 \xe2\x80\x9d\xe2\x80\x94omits section 2.4\'s reference to \xe2\x80\x9cmy estate and property.\xe2\x80\x9d As discussed more\nfully below, this omitted phrase is significant.\nThe Doggett claimants contend as a threshold matter that section 2.1\'s language does\nnot constitute the \xe2\x80\x9cspecific reference\xe2\x80\x9d demanded by John\'s will because section 2.1\'s\nlanguage does not explicitly refer to John\'s will, the power granted in John\'s will, or the\ntrusts. We assume without deciding that Sylvia\'s stated intent in section 2.1 to dispose of\n\xe2\x80\x9cany other property over which I may have a power of appointment\xe2\x80\x9d satisfies the \xe2\x80\x9cspecific\nreference\xe2\x80\x9d requirement in sections 3.4 and 4.3 of John\'s will. But that is only the first hurdle.\n377\n\n\x0cEven with this threshold assumption, Robinson\'s estate still must establish that\nsection 2.1\'s reference to \xe2\x80\x9cany other property over which I may have a power of\nappointment\xe2\x80\x9d can be read in conjunction with section 2.4\'s residuary clause to accomplish a\nvalid exercise of the appointment power in favor of Beverly. Evaluating this latter\nproposition requires a close examination of the phrase \xe2\x80\x9cmy estate and property \xe2\x80\x9d because that is\nwhat Sylvia gave \xe2\x80\x9call of the rest, residue and remainder of\xe2\x80\x9d to Beverly in section 2.4.\nOrdinary grammar and usage precepts teach that section 2.4\'s reference to \xe2\x80\x9cmy estate\nand property\xe2\x80\x9d means Sylvia\'s \xe2\x80\x9cestate\xe2\x80\x9d and Sylvia\'s \xe2\x80\x9cproperty.\xe2\x80\x9d Se McIntyre v. Ramirez, 109\nS.W.3d 741, 746 (Tex. 2003) (interpreting phrase \xe2\x80\x9ca person who would ordinarily receive or\nbe entitled to receive\xe2\x80\x9d in statute to mean a person who would \xe2\x80\x9cordinarily receive\xe2\x80\x9d or\n\xe2\x80\x9cordinarily be entitled to receive\xe2\x80\x9d); Cent. Power & Light Co. v. Bradbury, 871 S.W.2d 860, 86364 (Tex. App.-Corpus Christi 1994, writ. denied)(interpreting phrase \xe2\x80\x9cambulatory devices\nand services\xe2\x80\x9d in statute to mean \xe2\x80\x9cambulatory devices\xe2\x80\x9d and \xe2\x80\x9cambulatory services\xe2\x80\x9d); see also S.\n& P. Consulting Eng\xe2\x80\x99rs. P.L.L.C. v. Baker, 334 S.W.3d 390, 401-02 (Tex.App.-Austin 2011, no\npet) (acknowledging authority \xe2\x80\x9cpreferring [the rule] that a single adjective preceding a list of\nnouns modifies each of the nouns\xe2\x80\x9d in statutory interpretation cases); Bonilla v. State, No. 1408-00289-CR 2010 WL 2195440 at 9n.18 (Tex.App.-Houston [14th Dist.] June 3, 2010, no\npet.) (mem.op.) (interpreting phrase \xe2\x80\x9cwritten order or grant of permission\xe2\x80\x9d in criminal\nstatute to mean \xe2\x80\x9cwritten order\xe2\x80\x9d or \xe2\x80\x9cwritten grant of permission\xe2\x80\x9d according to \xe2\x80\x9crules of\ngrammar and common usage\xe2\x80\x9d). Robinson\'s estate did not argue otherwise in the trial court.\nUnder this reading of \xe2\x80\x9cmy estate and property\xe2\x80\x9d as Sylvia\'s \xe2\x80\x9cestate\xe2\x80\x9d and Sylvia\'s\n\xe2\x80\x9cproperty,\xe2\x80\x9d section 2.4\'s residuary clause accomplished an appointment of trust property to\nBeverly if Sylvia \xe2\x80\x9cintended that the appointive estate become part of her residual estate, and\nthat it pass ... under the terms of her will\xe2\x80\x9d to Beverly. See Krause, 430 S.W.2d at 49. Such a\nreading comports with an understanding of the appointment power as \xe2\x80\x9cneither property nor\nan estate\xe2\x80\x9d by itself, which did not vest in Sylvia \xe2\x80\x9cany estate, interest, or title\xe2\x80\x9d in the trust\nproperty. See id at 47. The property subject to the appointment power would not become\npart of Sylvia\'s \xe2\x80\x9cproperty\xe2\x80\x9d or Sylvia\'s \xe2\x80\x9cestate\xe2\x80\x9d unless that property first was appointed to\nSylvia or to Sylvia\'s estate. See id at 49.\nIn short, the approach illustrated by Krause contemplates a two-step process. The\nproperty first is appointed to the testator\'s estate and then reaches the recipient named in the\n378\n\n\x0cresiduary clause. See id. This court\'s decision in Wright illustrates the same two-step process.\nSee Wright, 2 S.W.3d at 673. (\xe2\x80\x9cHaving found that Jacob did exercise the power of\nappointment, we further hold that by the terms of his will, Jacob intended that his\nappointive estate become part of his residual estate, and that the appointive estate under\nLurine\'s will passed to the trustee of the Jacob Greenberg Family Trust.\xe2\x80\x9d). But this\nmechanism was not available to Sylvia.\nIn regard to the Marital Trust, section 3.4 of John\'s will unambiguously states: \xe2\x80\x9cMy\nwife shall have the special testamentary power to appoint ... provided, however, she shall not\nhave the power to appoint trust principal to herself [or] her estate....\xe2\x80\x9d In regard to the Family\nTrust, section 4.3 of John\'s will unambiguously states: \xe2\x80\x9cMy wife shall not appoint trust\nproperty to herself ... [or] her estate....\xe2\x80\x9d\nIf Sylvia could not appoint trust property to herself or to her estate, then section\n2.4\'s residuary clause bequeathing to Beverly \xe2\x80\x9call the rest, residue and remainder\xe2\x80\x9d of Sylvia\'s\n\xe2\x80\x9cestate\xe2\x80\x9d and Sylvia\'s \xe2\x80\x9cproperty\xe2\x80\x9d could not capture the trust property. If section 2.4\'s\nresiduary clause could not capture the trust property, then that clause cannot be read in\nconjunction with section 2.1 of Sylvia\'s will to bequeath to Beverly \xe2\x80\x9cany other property over\nwhich I may have a power of appointment.\xe2\x80\x9d Such an interpretation impermissibly\ncontravenes the unambiguous limits in sections 3.4 and 4.3 of John\'s will on Sylvia\'s exercise\nof the appointment power. Cf. Krause, 430 S.W.2d at 48. (\xe2\x80\x9cThe will of William H. Wilson\nauthorized Mrs. Wilson to appoint her own estate....\xe2\x80\x9d). Therefore, as a matter of law,\nRobinson\'s estate cannot rely on the two-step mechanism illustrated by Krause and Wright to\nestablish that section 2.1 of Sylvia\'s will worked in conjunction with section 2.4\'s residuary\nclause to accomplish a valid exercise of Sylvia\'s appointment power in favor of Beverly.\nTo address the limits established in sections 3.4 and 4.3 of John\'s will, Robinson\'s\nestate contends in a post-argument brief that \xe2\x80\x9cthe trust principal need not\xe2\x80\x94and does not\xe2\x80\x94\npass through Sylvia\'s estate.\xe2\x80\x9d Instead, \xe2\x80\x9cSylvia expressed her intent that the power of\nappointment be exercised and the property given in the same manner as her estate property,\nbut not that it be appointed to her estate.\xe2\x80\x9d Robinson\'s estate further argues that \xe2\x80\x9c[t]here is\nno need to treat the trust property as part of Sylvia\'s estate\xe2\x80\x9d when construing sections 2.1\nand 2.4.\nWithout expressly saying so, this alternative argument reads the residuary clause\'s key\n379\n\n\x0cphrase\xe2\x80\x94\xe2\x80\x9cmy estate and property\xe2\x80\x9d\xe2\x80\x94to bequeath Sylvia\'s \xe2\x80\x9cestate\xe2\x80\x9d along with \xe2\x80\x9cproperty\n[including property over *103 which I have a power of appointment].\xe2\x80\x9d This argument does\nnot effectively circumvent the appointment power limits established in John\'s will for two\nreasons.\nFirst, the Robinson estate\'s alternative argument requires this court to perform major\nsurgery on section 2.4\'s residuary clause by grafting the bracketed phrase [including property\nover which I have a power of appointment] onto \xe2\x80\x9cmy estate and property.\xe2\x80\x9d Cf. Krause, 430\nS.W.2d at 48-49 (residuary clause specifically disposed of all other property \xe2\x80\x9cwhich I may\nown or claim at the time of my death or over which I then shall have power of testamentary\ndisposition\xe2\x80\x9d). We cannot do so because \xe2\x80\x9ccourts may not redraft the will, vary or add\nprovisions under the guise of construction of the language of the will in order to reflect\nsome presumed intention of the testatrix.\xe2\x80\x9d Shriner\xe2\x80\x99s Hosp., 610 S.W.2d at 151.\nSecond, the Robinson estate\'s alternative argument requires choosing between\nmultiple meanings of the word \xe2\x80\x9cproperty\xe2\x80\x9d when it is used in section 2.4\'s residuary clause.\nAs discussed above, the most natural reading of section 2.4 is one in which \xe2\x80\x9cmy estate and\nproperty\xe2\x80\x9d means Sylvia\'s \xe2\x80\x9cestate\xe2\x80\x9d and Sylvia\'s \xe2\x80\x9cproperty.\xe2\x80\x9d Even if the Robinson estate\'s\ninterpretation is plausible, it is at best an alternative interpretation. Robinson\'s estate cannot\nprevail merely by offering an alternative interpretation because the intent to exercise the\nappointment power \xe2\x80\x9cmust be so clear that no other reasonable intent can be imputed under\nthe will.\xe2\x80\x9d Republic Nat\xe2\x80\x99l Bank of Dallas, 283 S.W.2d at 47.\nIt bears emphasizing that section 2.1 by itself appoints no property to Beverly or to\nany other identified recipient. The Robinson estate\'s argument depends on combining\nsection 2.1 with the phrase \xe2\x80\x9cmy estate and property\xe2\x80\x9d in section 2.4\'s residuary clause.\nTherefore, the burden of demonstrating a sufficiently \xe2\x80\x9cclear\xe2\x80\x9d intent to exercise the\nappointment power must be borne in significant part by section 2.4\'s residuary clause.\nSection 2.1 encompasses at least two distinct types of \xe2\x80\x9cproperty.\xe2\x80\x9d Sylvia refers to\n\xe2\x80\x9cmy property\xe2\x80\x9d in section 2.1, which by definition does not include any property over which\nshe had power of appointment. See Krause, 430 S.W.2d at 47. Sylvia also refers in section 2.1\nto \xe2\x80\x9cany other property over. which I may have a power of appointment.\xe2\x80\x9d Because section\n2.4\'s reference to \xe2\x80\x9cproperty\xe2\x80\x9d reasonably could mean \xe2\x80\x9cmy property\xe2\x80\x9d exclusive of appointive\nproperty, Sylvia\'s intent to exercise the appointment power via section 2.4\'s residuary clause\n380\n\n\x0cis not \xe2\x80\x9cso clear that no other reasonable intent can be imputed under the will.\xe2\x80\x9d Republic Nat\xe2\x80\x99l\nBank of Dallas, 283 S.W.2d at 47. These circumstances create doubt \xe2\x80\x9cas to whether it was the\nintention to execute the power possessed by the grantor\xe2\x80\x9d and militate against a holding that\nthe appointment power \xe2\x80\x9cwas in fact executed\xe2\x80\x9d by \xe2\x80\x9csuch act or conveyance\xe2\x80\x9d in section 2.4.\nSee id. i (citing Hill, 43 S.W. at 791\nFor these reasons, the trial court erred in granting summary judgment based on a\nconclusion that \xe2\x80\x9cSylvia Doggett validly exercised her power of appointment in favor of ...\nBeverly Longuet.\xe2\x80\x9d The trial court therefore erred in granting summary judgment based on a\nconclusion that \xe2\x80\x9c[b]ecause of the valid exercise of the power of appointment, [the Doggett\nclaimants\'] claims ... fail as a matter of law.\xe2\x80\x9d As a matter of law, Robinson\'s estate cannot\nestablish that Sylvia validly appointed trust property to Beverly via sections 2.1 and 2.4 of\nSylvia\'s will. We sustain the Doggett claimants\' first issue with respect to the grant of\nsummary judgment and the award of attorney\'s fees in favor of Robinson\'s estate.\nCONCLUSION\nWe reverse the trial court\'s final judgment and remand this case for proceedings\nconsistent with this opinion.\n\nSchwartz v. Baybank Merrimack Valley N.A., 456 N.E.2d 1141\nGREANEY, Justice.\nThis case involves a testamentary power of appointment, the terms of which called\nfor its exercise by specific reference to the power in the donee\'s will. A judge of a Probate\nCourt concluded, after trial, that the power had not been exercised by the residuary clause of\nthe donee\'s will which neither referred to the power nor purported to exercise any power of\nappointment. We conclude that the judge\'s decision was correct and affirm his judgment.\nThe facts are drawn from the judge\'s findings. On April 1, 1957, Mary F. Cox\nexecuted a will which provided that the residue of her estate be held in trust for the benefit\nof her daughter Dorothy Cox during Dorothy\'s lifetime. Upon Dorothy\'s death, the trustee\nof Mary\'s trust was directed to pay the trust principal to such person or persons, including\nthe executor of Dorothy\'s will, as Dorothy \xe2\x80\x9cshall appoint by her will specifically referring to\nthe power herein given to her.\xe2\x80\x9d If Dorothy failed to exercise her general power of\nappointment, the trust principal was to be paid to the New England Deaconess Hospital.\n381\n\n\x0cMary\'s will was admitted to probate on August 5, 1968, and, on July 17, 1970, BayBank\nMerrimack Valley, N.A. (BayBank), was appointed to succeed the original trustee under the\nwill.\nOn May 6, 1977, Dorothy Cox executed a will, prepared by the plaintiff Maurice\nSchwartz, an attorney. The will, insofar as relevant, gave to a friend a life estate in her home\nand its contents, created a trust to maintain the home, and left specific cash bequests to a\nniece and a nephew and three charities. The residuary clause of Dorothy\'s will read as\nfollows: \xe2\x80\x9cThe said residue of my estate will be held in trust by my said Trustee ... to pay the\nincome thereof, to my ... niece, LOUISA GILBERT, during her lifetime. Upon her death,\nsaid residue and any accrued income thereof, shall go to ... BEAVER COLLEGE, of\nGlenside, Pennsylvania, outright, and said Trust will terminate.\xe2\x80\x9d Dorothy died on January 4,\n1980, never having married and leaving no issue. Her will was allowed and, on March 26,\n1980, Mr. Schwartz was appointed as her executor and trustee. Dorothy had insufficient\nassets at the time of her death to fund all the bequests in her will.\nIn addition, Mr. Schwartz, the sole witness at trial, testified as to the circumstances\nattendant upon his drafting of the will. He indicated that he had asked Dorothy about her\nassets and the funding of legacies, and that she had made reference to money in BayBank\nwhich could be used to pay the legacies. He also testified that he did not ask to see Mary\'s\nwill before he prepared Dorothy\'s will, that he first became aware of Mary\'s trust after\nDorothy\'s death, and that Dorothy never requested that her will exercise her power of\nappointment. Finally, Mr. Schwartz testified that Dorothy received substantial sums from\nanother trust created by her father and administered by The First National Bank of Boston\nas trustee, that Dorothy knew that the residue of the estates of both her parents were\nmanaged by trustees, that she received income from both trusts of about $20,000 annually,\nand that Dorothy had a checking account at a BayBank office.\n1. The facts require examination in light of several general principles pertaining to\nthe exercise of powers of appointment and two Massachusetts decisions.\nGenerally, when the donor of a power of appointment prescribes a specific formality\nfor the exercise of the power, there will be no effective appointment in the absence of the\ndonee\'s compliance with the formalities dictated by the donor. National Shawmut Bank v. Joy,\n315 Mass. 457, 462, 53 N.E.2d 113 (1944). Restatement (Second) of Property \xc2\xa718.2 (Tent.\n382\n\n\x0cDraft No. 6 1983. This rule, however, is not absolute. Failure to satisfy the formal\nrequirements imposed by a donor will not cause the appointment to fail if the donee\'s action\nreasonably approximates the prescribed manner of appointment, especially where the\nappointee is a member of a favored class. Restatement (Second) of Property, supra \xc2\xa7 18.3. 5\nAmerican Law of Property \xc2\xa7 23.44 (1952). See Shine v. Monaha, 354 Mass. 680, 682, 241\nN.E.2d 854 (1968). A donor\'s requirement of specific reference ordinarily negates any\npresumption that a general residuary clause may exercise the power and mandates, for\neffective exercise of the power, an affirmative act by the donee at least approximating the\nindicated formality.\nThe reasons behind these rules are simple enough to discern. The donor of the\npower presumptively intends by the specific reference requirement that the donee (a) focus\non the consequence of the appointive act and consider the donor\'s wish with respect to the\ntrust remainder if there is a default in exercise of the power, and (b) make an unambiguous\nwritten statement expressing a wish to exercise the power. With proper compliance, the\nspecific reference device provides for the reasoned disposition of property by means of\nwritten and proven instruments which help to establish an unimpeachable record of title and\nserve to discourage unnecessary litigation.\nThese principles underlie two decisions of the Supreme Judicial Court within the last\nfifteen years which, while not directly on point, instructively discuss the subject of successful\nexercise of powers of appointment.\nIn Shine v. Monaha, 354 Mass. 680, 241 N.E.2d 854 (1968), the donor of an inter\nvivos trust required that a general power of appointment be exercised \xe2\x80\x9cby specific reference\nin her [donee\'s] will to the full power hereby created.\xe2\x80\x9d The donee\'s will provided for the\ndistribution of \xe2\x80\x9c[a]ll the rest, residue and remainder of my property, including all property of\nwhich I have a power of appointment by virtue [of] any will or testament or inter vivos trust\nexecuted by my husband [the donor].\xe2\x80\x9d An effective exercise of the power was found, under\nthe principles of approximation, because the donor\'s purpose (to prevent inadvertent\nexercise of the power) had been satisfied by the donee\'s deliberate references to all powers\nof appointment given by her husband, the donor. Not to be overlooked in the decision, is\nthe court\'s careful distinction from the case before it of situations, as in National Shawmut\nBank v. Joy, supra, where the donor required a specific reference and the donee simply\n383\n\n\x0creferred in general terms to any power of appointment the donee might possess. 354 Mass.\n680, 241 N.E.2d 854.\nIn McKelvy v. Terry, 370 Mass. 328, 346 N.E.2d 912 (1976), the donor conferred on\nthe donee a limited testamentary power of appointment to be exercised \xe2\x80\x9cby reference [in the\ndonee\'s will] to the limited power of appointment herein given to him.\xe2\x80\x9d The donee\'s will\nprovided for distribution of \xe2\x80\x9c[a]ll of the residue of my estate, including lapsed legacies and\ndevises (and also including any property over which I may have a power of appointment\nunder any instrument, it being my intention to exercise all such powers which I may have at\nmy death).\xe2\x80\x9d The court found this residuary provision to be a sufficient exercise of the power,\ncommenting (at 332) that \xe2\x80\x9cthe meaning or design of the relevant clause of the [donee\'s] will\nsufficiently matches any requirement of the [donor\'s] trust instrument. That instrument calls\nfor a \xe2\x80\x98reference\xe2\x80\x99 to the power, not a specific reference, and we think ... that the residuary clause of\nthe will is an adequate reference although it is inclusive of any power created by any\ninstrument in the donee\'s favor\xe2\x80\x9d (emphasis supplied). Referring to Shine v. Monahan, the\ncourt said (at 333): \xe2\x80\x9cWe thought that there need not be exact compliance with the formality\nindicated by the donor where the approximation would satisfy his basic purpose. Less\nindulgence may be needed in the present case because the donor did not in terms require a\nspecific reference.\xe2\x80\x9d These excerpts from the McKelvy case imply the special nature of a\nspecific reference requirement and emphasize that compliance with such a requirement\ncannot be easily circumvented.\nThese principles and decisions provide the guidelines necessary to dispose of this\ncase. The general testamentary power of appointment granted to Dorothy by Mary\'s will\nexpressly required that it be exercised by Dorothy\'s will \xe2\x80\x9cspecifically referring to the power.\xe2\x80\x9d\nThe critical inquiry is \xe2\x80\x9cnot whether [the] donee intended to appoint but rather whether [the]\ndonee manifested her intent in the manner prescribed by [the] donor, i.e., by making specific\nreference \xe2\x80\x98in her will\xe2\x80\x99 to the power granted by [the] donor\'s will\xe2\x80\x9d (emphasis original).\nHolzbach v. United Virginia Bank, 216 Va. 482, 485-486, 219 S.E.2d 868 (1975). See also\nRestatement (Second) of Property, supra, \xc2\xa7 17.1. Unlike the situations in the Shine and\nMcKelvy cases, the residuary clause of Dorothy\'s will made no reference at all to any power.\nLacking any attempt at compliance with the requirement of specific reference, there is simply\nno testamentary framework which will allow application of a rule of approximation. We\n384\n\n\x0cconclude that Dorothy\'s will fails to exercise the power of appointment given to her by her\nmother.\n2. Some brief comment is in order on the plaintiff\'s several arguments seeking to\navoid the conclusion that there has been a default in the exercise of the power.\n(a) The plaintiff\'s reliance on the decision in Amory v. Meredith, 7 Allen 397 (1863), is\nmisplaced. The rule in Amory provides that a general testamentary power of appointment will\nbe deemed to have been exercised by a general residuary clause in the donee\'s will, unless a\ncontrary intention is demonstrated. The rule does not apply where the donor requires that\nthe power be exercised by means of specific reference. See McKelvy v. Terry, 370 Mass. At 331332, 346 N.E.2d 912. See also National Shawmut Bank v. Joy, 315 Mass. at 462, 53 N.E.2d 113.\n(b) The fact that Dorothy\'s will includes several pecuniary bequests which in total\nmay have exceeded her assets at the time of death does not, in these circumstances, imply\nthat the power has been exercised by implication. See Boston Safe Deposit and Trust Co., v.\nPrindle, 290 Mass. 577, 584, 195 N.E. 793 (1935).\n(c) The plaintiff\'s argument that property subject to a donee\'s general power is\nactually the donee\'s property is misplaced. Mary\'s will clearly did not grant a general power\nof appointment exercisable without restriction. We find the plaintiff\'s assertion to the\ncontrary both untenable on the facts and unsupported by any authority dealing with a\nrequirement of specific reference.\n(d) While the testimony of Mr. Schwartz may have been properly admitted to show\nthe circumstances attendant upon the execution of Dorothy\'s will, see 2 Newhall, Settlement\nof Estates \xc2\xa7 361 at 470 (1958), the pertinent texts of the wills of Mary and Dorothy, when\nlaid side by side and read together, manifest no ambiguity. Extrinsic evidence is not\nadmissible to contradict or control unambiguous language in a will. See Gustafon v. Svenson,\n373 Mass. 273, 275, 366 N.E.2d 761 (1977); Gove v. Hammond, 385 Mass. 1001-1002, 430\nN.E.2d 822 (1982). Nor is it admissible to correct an inadvertent omission by Dorothy or a\nmistake by the attorney who drafted the will. See Gustafson and Gove, supra. Finally, extrinsic\nevidence, in the absence of an ambiguity, is not admissible to show Dorothy\'s intent, even if\nthe result is the failure of the intended gift. Ibid. See also First National Bank v. Shawmut Bank of\nBoston, 378 Mass. 137, 144, 389 N.E.2d 1002 (1979).. See generally, Liacos, Handbook of\n385\n\n\x0cMassachusetts Evidence at 390-392 (5th ed. 1981 & Supp.1983).\nJudgment affirmed.\nProblems\n1. In which of the following cases, has the power been exercised?\na) Bethany\xe2\x80\x99s will stated, \xe2\x80\x9cI leave my rental properties in trust for Greg for life, the remainder\nas Greg shall appoint by will to any one that he chooses.\xe2\x80\x9d Greg appointed the rental\nproperties to Donna. Then, Greg dies intestate.\nb) Karen\xe2\x80\x99s will stated, \xe2\x80\x9cI leave my computers in trust for Jim for life, the remainder as Jim\nshall appoint.\xe2\x80\x9d In his will, Jim stated, \xe2\x80\x9cI leave my entire estate, including property over which\nI have an appointive power to my friend, Jane.\xe2\x80\x9d\nc) Rita\xe2\x80\x99s will states, \xe2\x80\x9cI leave my entire estate in trust for Mitchell for life, the remainder as\nMitchell shall appoint by will to any one of my children that he chooses.\xe2\x80\x9d Mitchell sent a\nnote to Rita\xe2\x80\x99s children telling them that he planned to leave Rita\xe2\x80\x99s money to them.\nd) Frances\xe2\x80\x99 will states, \xe2\x80\x9cI leave my stocks in trust for Leonard for life, the remainder as\nLeonard shall appoint by will.\xe2\x80\x9d In his will, Leonard stated, \xe2\x80\x9cI leave the residue of my estate\nto Lisa.\xe2\x80\x9d\nClass Discussion Tool 1\nIn her will, Stella stated, \xe2\x80\x9cI give my son Mark the rents from my apartment complex\nfor the span of his life, and upon Mark\xe2\x80\x99s death the apartment complex goes to whomever he\nappoints in his will.\xe2\x80\x9d Mark is a gambler and he loves to play high stakes poker. One night\nMark lost all of his money, but he wanted to continue to play the game. Mark asked his\nfriend Stan to borrow $50,000. Stan is a real estate developer. In exchange for the $50,000,\nMark gave Stan a written promise to appoint him as owner of the apartment complex in his\nwill. A few moths later, Mark was killed when he was found cheating in a poker game. Mark\nwill reads, \xe2\x80\x9cI leave all of my property including property of which I have a power of\nappointment to Rachel.\xe2\x80\x9d When Stan heard about the will, he sued Mark\xe2\x80\x99s estate. He asked\nthe court to give him the apartment complex or $50,000 plus interest. What type of power\ndoes Mark have? Can Stan get the apartment complex? Can Stan get the $50,000?\nClass Discussion Tool 2\n386\n\n\x0cIn her will, Olivia stated, \xe2\x80\x9cI give my son Jeremy the income from my retail store for\nlife, and upon Jeremy\xe2\x80\x99s death the store goes to whomever he appoints in his will. If Jeremy\nfails to exercise his power of appointment, the retail store will go to Jack.\xe2\x80\x9d Jeremy became ill\nand needed someone to take care of him. Jeremy told his cousin, Annie, that if she took care\nof him, he would appoint her as owner of the retail store. Jeremy and Annie put there\nagreement in writing. In his will, Jeremy stated, \xe2\x80\x9cI leave all of my property to Jenny. I leave\nall of the property over which I have a power of appointment to Annie in accordance with\nour written agreement.\xe2\x80\x9d Jack filed an action to have the contract declared void and\nunenforceable. What result?\n\n387\n\n\x0c'