Opinion ID: 2512045
Heading Depth: 1
Heading Rank: 5

Heading: Inconsistent with a Material Purpose?

Text: First, we disagree that the basic support of Alford was a material purpose of this trust. Darby employed no language indicating any such desire, despite the ease of inserting a clear directive to the trustee in this regard, or to permit an invasion of principal by ascertainable standards for her basic support needs. This was clearly not a support trust. See Miller v. Kansas Dept. of S.R.S., 275 Kan. 349, 354, 64 P.3d 395 (2003) (support trust exists when trustee is required to inquire into the basic support needs of the beneficiary and to provide for those needs). And we are not inclined to infer a material purpose to support Alford's basic needs when the express terms fail to indicate any such purpose. Material purposes are not readily to be inferred. A finding of such a purpose generally requires some showing of a particular concern or objective on the part of the settlor, such as concern with regard to a beneficiary's management skills, judgment, or level of maturity. Thus, a court may look for some circumstantial or other evidence indicating that the trust arrangement represented to the settlor more than a method of allocating the benefits of property among multiple intended beneficiaries, or a means of offering to the beneficiaries (but not imposing on them) a particular advantage. Restatement of the Law Third, Trusts § 65, comment d, p. 477 (2001). We also disagree that the changes effected by the will's codicil are indicative of any intent to support Alford's basic needs. In the codicil executed within 6 months of the original will, Darby merely doubled his trust bequest as well as all the beneficiaries' annual distribution amounts. No language or circumstantial evidence supports an inference to create a support trust. Whereas no direct or circumstantial evidence has been offered to indicate that a material purpose of the trust was to provide for Alford's basic needs, we note that a specific trust provision does substantially restrict the beneficiaries' rights and interests; this provision has been characterized as a spendthrift provision. In Kansas, a spendthrift provision is presumed to constitute a material purpose of the trust. K.S.A. 2009 Supp. 58a-411(c). Kansas law is in material contrast to the Uniform Trust Code, which specifically negates any such presumption. See Unif. Trust Code, § 411(c), 7C U.L.A. 498 (2004) (made optional in 2004). A spendthrift trust has been defined as a trust created to provide a fund for the maintenance of a beneficiary and at the same time to secure the fund against his or her improvidence or incapacity. Provisions against alienation of the trust fund by the voluntary act of the beneficiary or by his or her creditors are its usual incidents. In re Estate of Somers, 277 Kan. 761, 764, 89 P.3d 898 (2004). Language nearly identical to Article IX, paragraph J (quoted above) of Darby Trust D was characterized as a spendthrift provision by this court in Somers. Notably, this court in Somers construed the spendthrift trust in a manner that prohibited a modification to enable distributions to life beneficiaries in excess of the specific monthly amount stated in the trust instrument, even though the additional distributions would be paid from the remainder interest. 277 Kan. at 771-72, 89 P.3d 898. Following Somers, the proposed modification at issue here would be inconsistent with the material purpose manifested by the spendthrift provision. We conclude that the modification increasing the distribution amount to a first generation beneficiary (Alford) would be inconsistent with the obvious material purpose to preserve sufficient income and principal to fund the distributions to beneficiaries after Alford's death. Due to the limited factual presentation at district court, we have no way to determine whether the proposed increase in Alford's share may exhaust the trust's corpus to the extent that amounts specified to surviving beneficiaries cannot be funded, but any reduction in the corpus would seem to be inconsistent with the purpose to have sufficient funds to continue specified distributions to the second and third generation of beneficiaries. See Restatement Third, Trusts § 66, comment b, p. 494. It is beyond dispute that any increase in the annual distribution to Alford will reduce the remainder in trust to the third generation beneficiaries, who are to receive one-third of the funds then comprising Trust D. Moreover, the increase is contrary to Darby's express direction to add to the principal any excess income not needed for the specified distributions. For all of these reasons, we conclude that the proposed modification increasing Alford's annual distribution is inconsistent with material purposes of the trust and cannot be validated under K.S.A. 2009 Supp. 58a-411(b).