Opinion ID: 2595160
Heading Depth: 1
Heading Rank: 2

Heading: Application of the Kansas Uniform Trust Code

Text: The district court entered its decision in this case on May 23, 2002. Approximately 6 months after its decision, Kansas SB 297 became effective January 1, 2003. Senate Bill 297 is a substantial adoption of the Uniform Trust Code (UTC). See Kansas Uniform Trust Code, K.S.A. 2002 Supp. 58a-101 et seq. (KUTC). K.S.A. 2002 Supp. 58a-1106(a)(1) provides that except as otherwise provided [t]his act applies to all trusts created before, on, or after its effective date. K.S.A. 2002 Supp. 58a-1106(a)(3) further provides: (3) this act applies to judicial proceedings concerning trusts commenced before its effective date unless the court finds that application of a particular provisions of this act would substantially interfere with the effective conduct of the judicial proceedings or prejudice the rights of the parties, in which case the particular provision of this act does not apply and the superseded law applies. K.S.A. 2002 Supp. 58a-1106(a)(4) provides that any rule of construction or presumption provided in this act applies to trust instruments executed before the effective date of the act unless there is a clear indication of a contrary intent in the terms of the trust. We conclude that application of the KUTC, K.S.A. 2002 Supp. 58a-101 et seq., would not substantially interfere with the effective conduct of the judicial proceedings before this court or prejudice the rights of the parties. Moreover, the rules of construction provided in the KUTC apply to the instrument we are asked to construe. The facts are not in dispute, and all parties have entered their appearances before the district court and request that the proposed changes be adopted and affirmed by this court. Nothing in the record or in the KUTC prevents application of the code to this case. The trustees suggest that the KUTC applies, and they urge this court to apply it. Other than very general suggestions, the trustees do not offer analysis of how the KUTC may support their position. The trustees do argue that the appropriate standard of review in this case is one of abuse of discretion. At the same time, the trustees acknowledge that a de novo review may also be appropriate in cases to be decided on the basis of documents and stipulated facts. Appellate courts have de novo review of cases decided on the basis of documents and stipulated facts. See Ward v. Ward, 272 Kan. 12, 30 P.3d 1001 (2001). The question before this court is whether Kansas law supports the actions of the district court in its reformation of the Trust. We conclude that the appropriate standard of review is de novo which calls for an unlimited review by this court. See Neeley v. Neeley, 26 Kan. App. 2d 924, 996 P.2d 346 (2000). Senate Bill 297, which was enacted by the Kansas Legislature in 2002 and became effective on January 1, 2003, adopted the UTC. Kansas became the first state to enact the UTC because Kansas was the first state to appoint a committee to study the UTC. English, The Kansas Uniform Trust Code, 51 Kan. L. Rev. 311 (2003). English's article provides an excellent overview of the KUTC with some attention to how its enactment changes existing Kansas law. The UTC is the first national codification of the law of trusts. The main stimulus to the commissioners' drafting of the UTC is the greater use of trusts in recent years in family estate planning and commercial transactions in the United States and internationally. See UTC, Prefatory Note, 7C U.L.A. 28 (Supp. 2000); English, The Kansas Uniform Trust Code, 51 Kan. L. Rev. 311; English, The Uniform Trust Code (2000): Significant Provisions and Policy Issues, 67 Mo. L. Rev. 143 (2002); Law Summary, Get Your Dead Hands Off Me: Beneficiaries' Right to Terminate or Modify a Trust Under the Uniform Trust Code, 67 Mo. L. Rev. 443 (2002). The questions involving reformation and modification of the Trust under the KUTC are ones of first impression. As indicated by English in his Kansas Law Review article, [t]he primary source of trust law in Kansas and in most other states is the Restatement of Trusts and the multivolume treatises by Scott and Bogert, sources that fail to address numerous practical issues and which on others sometimes provide insufficient guidance. 51 Kan. L. Rev. at 312. Testimony before the Senate Judiciary Committee on January 22, 2002, regarding SB 297 notes that the bill embodies the UTC recommended by the National Conference of Commissioners on Uniform State Laws. The Kansas Comments indicate how each section conforms or changes existing Kansas trust law, and the UTC Comments further explain each section. We also note a marked difference under the KUTC between reformation and modification. Reformation under K.S.A. 2002 Supp. 58a-415 is available when the terms of a trust fail to reflect the donor's original particularized intention. The mistaken terms are then reformed to reflect this specific intent. Modification, under the uniform code and specifically under K.S.A. 2002 Supp. 58a-416, is authorized where the terms of the trust to be changed meet the settlor's tax-saving objectives and the resulting terms, particularly the dispositive provisions, are not inconsistent with the settlor's probable intent. See K.S.A. 2002 Supp. 58a-412. Where a district court reaches the right result, its decision will be upheld even though the trial court relied upon different grounds for its action or assigned different or erroneous reasons for its decision. Bergstrom v. Noah, 266 Kan. 847, 875-76, 974 P.2d 531 (1999) ; KPERS v. Reimer & Koger Assocs., Inc., 262 Kan. 110, 118, 936 P.2d 714 (1997).