Opinion ID: 2595160
Heading Depth: 1
Heading Rank: 4

Heading: The Second Change: Preserving the Discretionary Power

Text: The trustees requested the second change based on State ex. rel . Secretary of Social and Rehabilitation Services v. Jackson, 249 Kan. 635, 822 P.2d 1033 (1991). In Jackson, this court held that the use of the word shall rather that may in a discretionary power can defeat the discretionary nature of the power and may enable creditors to reach trust assets subject to the power. 249 Kan. at 642. The trustees argue that it was not Harris' intent that creditors of Trust beneficiaries would be able to reach the principal of the Trust as illustrated by the spendthrift provisions of Paragraph 7 (g). The provisions of the Trust support a conclusion that Harris was concerned about creditors' ability to anticipate a beneficiary's right in and to the corpus of the Trust. Subparagraph (g) provides express evidence for such concern: (g) The trust beneficiary shall not have any right, power or authority to sell, transfer, pledge, mortgage, hypothecate, alienate, anticipate, or in any other manner affect or impair their beneficial and legal right, title, interest, and estate in and to the trust income and/or principal, nor shall the right, title, interest and estate of such beneficiaries be subject to the rights and claims of creditors of said beneficiaries, nor subject nor liable to any process of law or court. The trustees demonstrated a need for changing the word shall to may in Paragraph (e) of the Trust. The following provisions of K.S.A. 2002 Supp. 58a-412 provide authority for changing the word shall to may in Paragraph (e) of the Trust as requested by the trustees and granted by the district court: (a) The court may modify the administrative or dispositive terms of a trust . . . if, because of circumstances not anticipated by the settlor, modification. . . will further the purposes of the trust. To the extent practicable, the modification must be made in accordance with the settlor's probable intention. This change granted by the district court is in the administrative terms of the Trust. The holding in Jackson could not have been anticipated by Harris, and the change furthers the purposes of the Trust. The change granted is consistent with Harris' probable and actual intent. We, therefore, affirm the decision of the district court in this second change.