Court Opinion

ID: 9528892
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:45:00.959128+00
Date Added: 2024-06-11T13:27:26.483535
License: Public Domain

Fromme, J.,
concurring: Time does not permit an extended discussion of my dissatisfaction with the holding in this case. It is my view that the trust disposition in this case is testamentary and is invalid as violative of the statute of wills. I would overrule the questionable holding of this court in In re Estate of Morrison, 189 Kan. 704, 371 P. 2d 171, and hold the trust attempted by Pearl *230Ingram invalid. The majority reaches the same result by holding the trust valid but determining the trust was revoked on the death of the son.
The uncertainty which occurs in rules of law regarding trusts arises in the cases from failure to keep in mind the three participants in a trust transaction, the settlor, the trustee and the beneficiary. In few reported cases, such as here, do we have one individual participating in the transaction as settlor, as sole trustee and as sole beneficiary during the lifetime of the settlor plus the provision in the trust instrument reserving the right to revoke the trust. This is the exact situation in the present case. The remainderman beneficiary has no vested beneficial interest in either the trust property or tihe income during the lifetime of the settlor. His future entitlement depends entirely upon a failure of the settlortrustee-life beneficiary to revoke the trust. It should be noted in this case that on the death of the settlor-trustee-life beneficiary there is no trustee remaining to transfer the legal title. In both Morrison and in the present case the legal title, formerly in the settlor-trustee-life beneficiary, somehow passes by reason of the instrument and does not depend upon any act of a successor trustee. In other words the instrument is a testamentary disposition of property. It is not executed according to the statute of wills and is therefore invalid.
The Restatement, Second, Trusts, § 56, states:
“Where no interest in the trust property is created in a beneficiary other than the settlor before the death of the settlor, the disposition is testamentary and is invalid unless the requirements of die Statute of Wills are complied with.”
Cases in support thereof are many. See Matter of Sahakian, 44 Misc. 2d 849, 255 N. Y. S. 2d 520; Dawson v. Dawson’s Administratrix, Ky., 272 S. W. 2d 666; Smyth v. Cleveland Trust Co., 81 Ohio Abs. 581, 10 Ohio Ops. 2d 448, 163 N. E. 2d 702; Brown Estate, 384 Pa. 99, 119 A. 2d 513. When an instrument in writing defers the vesting of possession, enjoyment and interest in property until the death of the maker it is testamentary in nature. (Reed, Ex’r, v. Hazelton, 37 Kan. 321, 15 Pac. 177; Hazelton v. Reed, 46 Kan. 73, 26 Pac. 450; Glover v. Fillmore, 88 Kan. 545, 129 Pac. 144, 89 Kan. 480, 132 Pac. 147.)
In the present case the son held no present interest in the trust property, neither interest, possession nor enjoyment.
In an article in 36 J. B. A. K. 181 by James K. Logan, former dean of the Kansas University Law School, the Morrison case is justified *231as not being testamentary in nature or violative of the statute of wills by reason of the provision in the Declaration of Trust requiring the settlor-trustee-life beneficiary to notify the mutual fund corporation before changes were effected as to the trust property, such as in case of change of ownership and revocation.
This requirement appears to be inserted for the protection of the mutual fund corporation in which company the shares of stock were held. The company had no control over the actions of the settlor-trustee-life beneficiary which would in any way limit the power of the settlor. If the trust is testamentary these requirements for proper transfer or change in certificates evidencing ownership would not make the trust any less objectionable under the statute of wffls.
In conclusion I would point out that although the court in Morrison attached significance to the change made by the legislature in G. S. 1935, 33-101 as it appeared in G. S. 33-101 (now K. S. A. 33-101) the statutory change had little significance in that case for it is part of the statute of frauds. Its purpose is to protect creditors against transfers by a debtor to a trustee for the purpose of defeating creditors. Morrison was not concerned with the rights of creditors. The statute is not an enabling act which changes the requirements of a valid trust. Therefore it is doubtful if the change in the statute was significant.
The holding in Morrison renders the statute of wills ineffective and its approval here wall result in much litigation as the members of the public attempt to avoid probate of their estates by placing their property under this type of a trust.
This court should not perpetuate the erroneous rules of law as applied in the Morrison case. I would hold the trust invalid, accordingly I concur only in the result.
Prager, J., joins in the foregoing concurring opinion.