Opinion ID: 6536712
Heading Depth: 2
Heading Rank: 2

Heading: EFM's Motion for Judgment Granting Its Petition for Instructions

Text: [¶11] EFM subsequently filed a Motion for Judgment Granting its Petition for Instructions, which it claimed to be analogous to a motion for judgment on the pleadings under W.R.C.P. 12(c). It argued it had the authority to decant under Wyo. Stat. Ann. § 4-10-816 (a) (xxviii) (LexisNexis 2019), which states: [A] trustee may ... [d]istribute all or any portion of trust income or principal in further trust for the benefit of the trust beneficiaries pursuant to authority granted in the trust instrument to make discretionary or mandatory distributions of trust income or principal to the trust beneficiaries, whether or not the discretionary or mandatory distributions are pursuant to an ascertainable standard[.] [¶12] EFM also claimed, under the plain terms of the Trust Agreement, its discretion concerning the distributions of income and principal is broad and includes the ability to decant. It again relied on Paragraph 2.1.2 of the Trust Agreement, which gives the Trustee the discretion to distribute, during Darla's lifetime, the Trust's income and principal for any purpose, as well as Paragraph 8.5.9 which provides:  The Trustee's discretion concerning distributions of income or principal shall be absolute and uncontrolled and subject to correction by a court only if the Trustee should act utterly without reason, in bad faith, or in violation of specific provisions of this Agreement. It is the Settlor's strong belief that the Trustee will be in the best position to interpret and carry out the intentions expressed herein under changing circumstances. [¶13] EFM also pointed to Paragraph 8.5.13 of the Trust Agreement which states [t]he Trustee's discretionary power to distribute income or principal includes the power to distribute all of such income and/or principal to one or more members of a class to the exclusion of others, whether or not the terms of the trust specifically mention that possibility and to Paragraphs 2.1.4 and 9.5 which allow it to consider Darla's needs as more important than the needs of the Settlor's descendants or any other beneficiary and to divide and distribute the assets of the Trust Fund in kind, in money, or partly in each, without regard to the income tax basis of any asset and without the consent of any beneficiary. The decision of the Trustee in dividing any portion of the Trust Fund between or among multiple beneficiaries shall be binding on all persons. 8 [¶14] Darla and Julie agreed the Trust should be decanted into two separate trusts as proposed. According to them, the proposed decanting was not ' utterly without reason, in bad faith, or in violation of specific provisions of ' the Trust. (Emphasis in original.) [¶15] Edward opposed EFM's motion. Importantly, he did not dispute Wyoming law generally authorizes trustees to decant. However, he disputed the appropriateness of the proposed decanting and argued material questions of fact existed as to whether it contradicted Bruce's intent, the purpose of the Trust, and the Trust Agreement's terms. [¶16] The Trust Agreement provides: 2.1. Primary Term. The Dynasty Trust shall continue until the earlier of the Maximum Duration for Trusts defined herein [1,000 years], or the determination by the Trustee that the sale of the [Ranch] is absolutely necessary to provide for the care of the Settlor's descendants (the Primary Term). It is the Settlor's specific intent that the Trustee wait at least 250 years from the date of creation of this trust to consider the sale or change of use of the Ranch as set forth herein. It is the Settlor's specific intent that the Ranch shall be held by the Trustee for the benefit of the Settlor's Wife and descendants for as long as possible. 2.1.1 Until the termination of the Primary Term, the Trustee shall maintain the Ranch for the benefit of the Settlor's Wife and descendants and their guests, invitees, and licensees as the Trustee may determine. According to Edward, these provisions clearly express[ ] [Bruce's] intent that the Ranch, as a whole, be held in the Trust for at least 250 years, that it be maintained for the benefit and use of [Bruce's] [w]ife and descendants, ... that the Trustee wait at least 250 years before considering a change in the use of the Ranch, and the Ranch remain in the Trust unless its sale is absolutely necessary to provide for the care of [Bruce's] descendants. Edward argued the proposed decanting was contrary to this intent because it divides the Ranch into two trusts prior to 250 years based on alleged uneconomic circumstances and prevents the beneficiaries from using the entire Ranch. [¶17] Edward also claimed the proposed decanting was contrary to Paragraph 2.2 of the Trust Agreement, which requires the  Trustee, [u]pon the termination of the Primary Term, to continue to hold the trust in a combined fund, but shall maintain an account of each of the Settlor's descendants' per stirpital share ('Share') of the Trust. Paragraph 11.6 of the Trust Agreement further provides: Property that is to be divided among an individual's surviving or then-living descendants 'per stirpes' or in 'per stirpital shares' shall be divided into as many equal shares as there are children of the individual who are then living or who have died leaving surviving or then-living descendants. According to Edward, if the Primary Term were to end today, he and Julie, as Bruce's only children, would each receive a 50% share of the Trust. Under the proposed decanting, however, he would only receive 17.2% of the Trust, according to EFM's calculations. [¶18] Edward further argued there were questions of material fact as to whether the proposed decanting constituted a breach of EFM's fiduciary duties, including the duty to act impartially in managing and distributing trust property. He also disputed EFM's claim the proposed decanting was necessary because it was uneconomical to continue to hold the Ranch in the Trust, but he could not assess the accuracy of this claim without an accounting. Moreover, he claimed the Trustee's value of the Watts property was overstated because it was based on a flawed appraisal. [¶19] In reply, EFM argued the facts Edward claimed to be in dispute were immaterial because its Petition raised only a single narrow legal issue: [Whether it has the] authority to distribute the Trust assets to two new trusts, each of which would benefit different sets of the Trust's existing beneficiaries[.] As to that question, Edward had not disputed that the Trust Agreement gives EFM the discretion to make distributions during Darla's lifetime to all, some, or none of the beneficiaries. Moreover, under § 4-10-816(a) (xxviii), this discretionary power gives rise to the power to make such distributions to new trusts. As a result, EFM claimed the only material facts were the genuineness of the Trust Agreement, EFM's status as Trustee, and Darla being still alive.