Opinion ID: 6535638
Heading Depth: 3
Heading Rank: 2

Heading: Material Trust Purposes

Text: [¶24] Lisa further contends the trust must be terminated because, as structured, it cannot accomplish its intended goals-to avoid or minimize federal inheritance tax to each settlor's estate, provide liability protection, and prevent voluntary or involuntary transfer or alienation of an ownership interest in the trust. For these reasons, Lisa argues it is impossible to achieve the estate planning purposes of the trust and Wyo. Stat. Ann. § 4-10-411 (a) mandates its termination. [¶25] Lisa correctly notes that one reason Robert and Irene created the Redland Family Trust was for estate planning purposes. Redland II , ¶ 34, 346 P.3d at 871. However, a trust may have more than one material purpose. Shriners Hosps. for Children , ¶¶ 41, 49, 373 P.3d at 406, 408 . Here, the district court found that the dominant, main and most important reason for the trust was to keep the Redland ranch holdings together to conduct business: 6. Although Robert Redland and Lisa Kimsey go to great lengths claiming that the purpose of the Trust, to minimize the effects of taxation, has been lost due to the Trust's structure, the main and most important reason for the Trust, i.e., to keep the lands and leases together for the Redland family , has not been frustrated. ... Its fundamental purpose of keeping the property together as a whole for the benefit of the Redland Family regardless of the tax consequents is still a legitimate and valid purpose .... The loss of one purpose for the creation of the Trust does not mean that the Trust itself serves no purpose. .... 16. ... The dominant stated purpose of this 1989 Trust with its amendments is to hold the Redland ranch holdings together to conduct business . This purpose still is viable and, quite frankly, why every one of the beneficiaries put property and money into this Trust. ... (Emphasis added.) This finding is not clearly erroneous. Id. ¶ 27, 373 P.3d at 403 . [¶26] Prior to establishing the trust, Robert, Rolly, and Kendrick each ran livestock on various parcels of land now owned by the trust. Redland I , ¶ 17, 288 P.3d at 1179 . Robert and his two sons often operated together, including running their cattle together and supplying veterinary care, breeding, and feed for the cattle. Id. By 1989, their cattle operations had grown and continued to grow. Id. ¶ 20, 288 P.3d at 1180 . When Robert's mother passed away, Robert obtained an option to acquire more property. Id. Before exercising the option, Robert and Irene created the family trust. Id. The Trust Agreement expressly states the purpose of the trust is to hold and manage the trust estate and to carry on business as hereinafter provided. See Am. Nat. Bank of Cheyenne, Wyo. v. Miller , 899 P.2d 1337 , 1340-41 (Wyo. 1995) (citations omitted) (looking to the trust instrument to determine the grantor's intended material purpose of the trust). We recognized this purpose in Redland I , stating [t]he Trust Agreement established the trust for the purpose of holding and managing property. Redland I , ¶ 21, 288 P.3d at 1180 . Indeed, the parties originally acquired much of the trust property from Robert's parents, who hoped [the property] would be held and operated by future Redland generations. Id. ¶ 13, 288 P.3d at 1179 . Thus, the district court did not err in finding that the dominant stated purpose of [the trust] is to hold the Redland ranch holdings together to conduct business. [¶27] Lisa recognized dual trust purposes at trial, testifying that the purpose of forming [the] Trust was to hold this mountain ground [together] and [to] do this estate planning. On appeal, she argues that the trust cannot achieve its purposes related to minimizing tax consequences and preventing voluntary or involuntary transfer or alienation of an ownership interest in the trust, and contends that Wyoming law requires termination when a trust cannot meet one of  its material purposes. (Emphasis added.) Lisa misconstrues Wyoming law on this point. [¶28] Wyoming law prohibits a trust from being terminated when any material purpose of the trust remains. See, e.g. , Wyo. Stat. Ann. § 4-10-411 (a) ([A] trust terminates to the extent the trust is revoked or expires pursuant to its terms, no material purpose of the trust remains to be achieved or the purposes of the trust have become unlawful, contrary to public policy or impossible to achieve. (emphasis added) ); Wyo. Stat. Ann. § 4-10-412 (c) (A noncharitable irrevocable trust may be terminated upon consent of all of the beneficiaries if the court concludes that continuance of the trust is not necessary to achieve any material purpose of the trust.); Shriners Hosps. for Children , ¶ 52, 373 P.3d at 408 (citations omitted) ([T]ermination of a trust is not permitted under Wyoming law if the continuance of the trust is necessary to carry out a material purpose of the trust.). The district court correctly found that a viable material purpose of the Redland Family Trust remains (keeping the Redland ranch holdings together to conduct business) even if another purpose has failed (minimizing tax consequences). 13 The history of the parties' cattle operations, how the ranch lands were acquired, and the creation of the family trust to hold and manage the trust estate and to carry on business, all support the district court's conclusion that continuation of the trust is necessary to achieve a remaining material purpose of the trust-to keep the land and leases together as a whole for the benefit of the Redland family. Wyo. Stat. Ann. §§ 4-10-411 (a), -412(c). Thus, the district court did not err when it did not terminate the trust.