Court Opinion

ID: 5107008
Source: CourtListenerOpinion
Date Created: 2021-10-02 05:57:17.309337+00
Date Added: 2024-06-11T08:21:17.685913
License: Public Domain

OPINION CONCURRING IN PART AND DISSENTING IN PART

PAUL McGHEE, Senior Judge.
I dissent in part and concur in the remand of the case. Ten days before Mrs. Betty Jane Johnson died from cancer, she *478executed her Revocable Living Trust Agreement. In subparagraph 4.03 of the trust, she directed the trustee to dispose of the remaining balance of the trust after her death and the death of her husband, Dr. Norman Johnson:
... to, or in trust for the benefit of, such person(s) among my descendants, or who at any time were married to a descendant of mine, upon such conditions and estates, with such powers, in such a manner and in such proportions and at such time or times as my spouse appoints and directs by Will, specifically referring to this limited power of appointment.
She further directed in subparagraph 4.03 that if her husband did not “fully and/or effectively” exercise the power of appointment, the trustee should distribute the remaining trust property, free and clear of the trust, in one-third shares, to her surviving sister, Barbara Teachout; to the lineal descendant of her deceased brother, Dick Cutter; and to the lineal descendants of her deceased brother, Maurice Cutter.
Dr. Johnson exercised the power of appointment in his will by directing that the trust property be disposed of by transferring the property for the benefit of his son and his son’s wife, a medical school, a church, and two charities. Because of disclaimers by the medical school, the church, and both charities, a valid exercise of the power by Dr. Johnson presumably would result in respondents becoming the sole beneficiaries of the trust, to the exclusion of appellants. However, the judgment is silent as to the identity of the ultimate recipients of the trust property.
Mrs. Johnson never had descendants, and it is obvious that she did not anticipate having descendants in the future. The trial court found that “the trust contained an ambiguity considering the provisions of the trust and the fact that Betty had no descendants.” It then entered judgment declaring “that the Revocable Living Trust of Betty Jane Johnson is reformed, and the power of appointment granted to her husband, Dr. Norman Johnson, is not limited to Betty Jane Johnson’s descendants.”
“ ‘Ambiguity’ means ‘duplicity, indistinctness or uncertainty of meaning of an expression used in a written instrument.’ ” Schupbach [v. Schupbach], 760 S.W.2d [918], 932[2] [(Mo.App.1988)]. A trust instrument is ambiguous if its provisions, when taken together, evoke a question as to who the real parties and beneficiaries are. See In re Estate of Lamy, 679 S.W.2d 288, 290[2] (Mo. banc 1984).
An ambiguity in a trust instrument may be either patent or latent. Schupbach, 760 S.W.2d at 923. “A patent ambiguity is one on the face of the instrument, whereas a latent ambiguity occurs where the instrument itself is unambiguous on this face but becomes open to more than one interpretation when applied to the factual situation in issue.” Boatmen’s Union National Bank v. Welton, 640 S.W.2d 497, 502[3] (Mo.App.1982).
Lehr v. Collier, 909 S.W.2d 717, 721 (Mo.App.1995).
It is undisputed that there is no patent ambiguity in the trust provision at issue, and appellants correctly state that the central issue is whether there is a latent ambiguity in subparagraph 4.03. It is also undisputed that if there is a latent ambiguity, then extrinsic evidence may be introduced to explain the ambiguity.
There are, in general, two types of will and trust provisions which present latent ambiguities:
(1) Where the instrument describes a person or thing and more than one *479person of thing fits exactly the description or condition in the writing;
(2) [W]here no person or thing fits the description or condition but two or more persons or things fit the description or condition in part and imperfectly.
[Boatmen’s Union National Bank v.] Welton, 640 S.W.2d [497] at 502 [(Mo.App.1982)].
With reference to latent ambiguities, “extrinsic testimony is admissible solely for the purpose of ascertaining a testator’s or grantor’s intention from the language actually employed.” Id. “In cases where a latent ambiguity exists, not only is evidence of surrounding facts and circumstances admissible, but, in addition, testimony regarding declarations made by the testator concerning such matters as the identity of a beneficiary, the identity or ambiguously described property, or to rebut some equity or presumption is also admissible.” Schupbach, 760 S.W.2d at 923. Nevertheless, such extrinsic evidence “is not admissible to show he meant one thing when he said another or to show an intention not expressed in the will or trust.” Welton, 640 S.W.2d at 502.
In re Nelson, 926 S.W.2d 707, 710(Mo.App.1996).
The Johnson trust provision is not included within the foregoing general types of trust provisions, but neither is it excluded. The parties have not cited a case precisely in point, and the issue of the existence of a latent ambiguity in the language of subparagraph 4.08, when applied to the factual situation at the time the trust was executed, appears to be a matter of first impression. In the absence of controlling precedent, I conclude that there is a latent ambiguity in the facially-valid grant of the power of appointment to Dr. Johnson which he could never exercise, if the language of the grant were literally applied.
I would hold that the trial court can properly consider extrinsic evidence of the facts and circumstances surrounding the execution of the trust, and the declarations made by Mrs. Johnson. After coming to that conclusion, I would affirm the declaration of the trial court that the power of appointment is not limited to descendants of Mrs. Johnson.
I would remand the case for the trial court to proceed as authorized by the principal opinion, and then enter judgment declaring to whom the trustee should distribute the remaining trust property.