Court Opinion

ID: 9883940
Source: CourtListenerOpinion
Date Created: 2023-10-06 02:26:46.337936+00
Date Added: 2024-06-11T07:48:33.558653
License: Public Domain

SEDGWICK, Judge
(dissenting).
I respectfully dissent.
The trial court’s order directing the trustee to purchase an annuity contract which safeguards appellant’s right to receive $12,000 per year for life, preserved the material intent of the testator and permitted the trial court to accelerate the remainder interests of the trust with consent of all beneficiaries.
The majority opinion holds that a material intent of the testator was that both income beneficiaries must die as a condition precedent to remaindermen’s receipt of any funds.
The compromise agreement approved by the district court on April 17, 1983 changed that provision. The compromise agreement was the result of the testator’s son’s, Thomas A. Boright, Jr., challenge to the validity of the trust agreement in Hennepin County Probate Court. The trustee then commenced an action for a declaratory judgment that the trust was valid. All beneficiaries and remaindermen received notice and all but two charities appeared and were represented. All, including appellant, agreed to a compromise which gave Thomas Boright, Jr. a larger annual *652income and which modified the original trust by providing that the trust income, after payment to the two income beneficiaries, would be distributed to the remainder beneficiaries according to the percentages specified in the trust rather than be added to the corpus. All beneficiaries have been receiving trust income since the district court approved the compromise agreement on April 17, 1983. That agreement, which is not part of the present action, was approved by all affected persons and was never appealed. It was in accord with Minn.Stat. § 501.35 (1982), which provides:
Any trustee of an express trust by will or other written instrument whose appointment has been confirmed, or any beneficiary of that trust, may petition the court then having jurisdiction of the trust as a proceeding in rem, * * * for instructions in the administration of the trust * * * for a construction of the trust instrument * * *. Upon such hearing the court shall make such an order as it deems appropriate, which order shall be final and conclusive as to all matters thereby determined, and binding in rem upon that trust estate and upon all the interests of all beneficiaries ⅜ ⅝ *.
This action to accelerate or terminate the trust is contested by the sole remaining income beneficiary only because she wants a “cash out” or lump sum payment if the trust is terminated. Since this would clearly contravene the spendthrift provision the testator provided for his former nurse and housekeeper, and because spendthrift provisions are recognized as material, the trial court properly provided an alternative of the guaranteed annuity.
The present corpus of the trust is in excess of $900,000. It does not seem reasonable to preserve a trust of that amount to fund $12,000 per year. It also does not seem reasonable that the testator would have named beneficiaries if he intended they would not receive anything.
Minn.Stat. § 501.40 (1982) provides that: When the purposes for which an express trust is created cease, the estate of the trustee shall also cease.
The Minnesota Supreme Court has held:
The power and jurisdiction of the court in a proper case to terminate an express trust, in proceedings brought for that purpose, when the purpose thereof has been fully accomplished, even before the expiration of the term of which it has created, are well settled by the authorities.
Simmons v. Northwestern Trust Company, 135 Minn. 357, 359-60, 162 N.W. 450, 451 (1917).
In this case, where the critical evidence is documentary, we need not defer to the trial court’s assessment of its meaning. Ploog v. Ogilvie, 309 N.W.2d 49, 53 (Minn.1981). However, under these circumstances, where the settlor’s son was accidentally killed at a relatively young age, where the trust has a present market value in excess of $900,000 and where all remaindermen are already receiving income through a valid compromise agreement, I find it inconceivable that the settlor would have intentionally directed that so large a trust estate be kept together to fund an annual annuity of $12,000.
Those seeking to terminate this trust have shown “that there is no material purpose to be served by the continuation of the trust.” In re Trust of Tufford, 275 Minn. 66, 71, 145 N.W.2d 59, 64 (1966).
I would affirm the trial court.