Do you or a loved one have a trust? Are you thinking about changing some items in it? Have you thought about removing a trustee.
You may be wondering why someone would want to change their trustee. Many people change their trustee’s for certain reasons. One of those reasons would be that they got into an argument with their trustee. When that is the case, you would not want them to take care of your trust if anything were to happen to you. You would want someone who you can trust.
According to The Oklahoma Bar Journal, Vol. 86-No. 3-1/24/2015 there was an appeal from a trial court order filed July 19, 2012, removing Trustee for various reasons. By ordering reimbursement to Appelle for nursing home expenses and medical expenses paid out of joint tenancy with right of survivorship accounts, its removal of Charles R. Leggett as Trustee, and affirm. Leggett and Appellee were married June 2, 2002. Prior to their marriage, they executed an Antenuptial Agreement on February 12, 2002. Leggett created a trust dated April 12, 2002, naming himself as Trustee and his brother as Successor Trustee. He amended the trust in 2004 to reflect his marriage. In the amendment he distributed the property to his wife. Leggett entered a nursing home in 2007 and remained there until his death in 2009. During the marriage and before Leggett moved into the nursing home, they deposited their social security checks into an account. The amended trust allowed Appelle to receive the homestead and ten acres, some personal property and net income of the trust for life. Upon her death, the estate would pass to equal shares to nieces and nephews, one of who was Leggett’s brother, the trustee. The trustee opened an account in Leggett’s name and began depositing money in the account. The account then triggered a probate, since it was opened in Leggett’s name. Appellee alleged that by doing this, the Trustee was interfering with and manipulating joint tenancy funds, not owned by the Trust. Appelle still had to continue to pay Leggett’s nursing home and medical expenses from these accounts. The trust owed to Appellee to be $11,813.83. The court also ordered that Appellee be reiumbrused out of the trust $81,251 for nursing home expenses and $4,975.90 for medical expenses.
The law states “The subject of trusts and the control of trust estates are cognizable only by courts of equity.” In re Lorice T. Wallace Revocable Trust, 2009 OK 34, 2, 219 P.3d 536, (quoting Peyton v. McCaslin, 1966 OK 4, 11, 417 P.2d 316, 320) In an equity case, the Court will examine the whole record and weigh the evidence, but the trial court’s findings will not be distributed in that review unless they are clearly against the weight of the evidence or some governing principle of law. Estate of Sneed, 1998 OK 8, 8, 953 P.2d 1111, 1115. Questions of law are reviewed de novo, which involves a plenary, independent and non-deferential examination of a trial court’s legal rulings. Jackson v. Jackson, 2002 OK 25, 2, 45 P.3d 418,422.
Court ruling relies on the terms of Trust that indicate these expenses were to be paid out the Trust principal not out of Appelle’s joint tenancy account Trust life income. The Antenuptial Agreement states: Jointly Owned Property. Without regard to the source of the funds with which it was acquired, or whose separate property it was earlier, registration or record ownership of an asset in Leggett and Appelle’s names together, whether as joint tenants with right of survivorship or as tenants in common, shall constitute conclusive evidence that they have an equal ownership interest in, and equal liability for any debts secured by, the asset, unless there is clear written evidence of a contrary intent. If the asset is owned in common (not as joint tenants with right of survivorship) the interest of each of Leggett and Appelle shall be his or her separate property. If Leggett and Appelle own the asset as joint tenants with right of survivorship then for purposes of Article IV herof upon the death of a party while married, the entire property shall be the property (and any debt secured thereby shall become the obligation) of the survivor, in addition to and not in reduction of amounts due the survivor pursant to Article IV, and for purposes of Article V here (divorce, etc.) each party shall be deemed to won his or her share (and to owe his or her share of the debt) as separate property. (Emphasis added)
The Antenuptial Agreement is a quest to determine and follow the intent of the parties. An unqualified intent on the part of Leggett and Appelle to creat a joint tenancy with right of survivorship relationship after the marriage, and that Appelle had every right as expressed by the terms of the Antentiptual Agreement and the actions of the parties post marriage, to the use and ownership of these two accounts. This does not end the inquiry. Even though Appelle had join and survivor ownership of the account funds, is Appelle entitled to reimbursement, thus reducing Trust principal and the residual share distributable out of Trust to the remaining contingent beneficiaries? The answer to the question is affirmative. The joint tenancy accounts were opened after the creation of the Anteniputal Agreement and Trust, were not an asset of the Trust. They were established for the purpose of paying all living and medical expenses during the marriage.
The Trust provisions provide during Leggett’s life and following his death: Trustee shall hold, manage, invest, and reinvest the trust estate and shall collect the income therefrom and shall dispose of the income and principal as follows: During the lifetime of Trustor, the Trustee shall pay and distribute to the Trustor all of the income of the trust and as much of the prinicpal of the trust as is necessary to enable Trustor to live in his accustomed standard of living and to enable Trustor to satisfy all financial needs related to his support and medical care. Upon the death of the Trustor, the Successor Trustee shall distribute the assets and residue of the Trust estate as follows: Pay any and all debts, funeral expenses, estate taxes, administration expenses, and other amounts due by Trustor or payable because of Trustor’s death. The rest, residue, and remainder of the Trust estate to be held in trust for the benefit of Luella Madeira nd she shall receive the net income form the assets, of the Trust estate for her life. The net income from the assets of the Trust estate shall be the amount after payment of all taxes; including income taxes, ad valorem taxes, and personal taxes; costs of administration of the Trust estate; insurance costs; and maintenance costs of Trust assets. The maintenance costs of Trust assets. The maintenance of Trust assets shall be at the sold discretion of the Successor Trustee. After the death of the Trustor, thte Trustees shall pay out of the trust fund either (a) all of the following described taxes and expenses or (b) that portion of the following described taxes and expenses which the Trustees shall, in their uncontrolled discretion, deem to be fairly attributable to the property of the trust or which the court having jurisdiction over the estate of the Trusttor shall direct, and shall charge said payments to the trust fund, to-wit: Any and all death duties, federal and state, including interest and penalty, which may become due to payable by reason of the death of the Trustor; any and all estate and inheritances due or payable, including taxes due on property co-owned or owned in joint tenancy with any beneficiary of this Trust; any and all expenses of the last illness, funeral, and burial of the Trustor, his debts, and the cost of administration of his estate.
The terms of the Trust show a clear intent that Leggett nursing home and medical expenses were to be paid from Trust assets. The rest, residue, and remainder of the Trust estate to be held in turst for the benefit of Trustor’s wife, Leggett. It is the intent of Trustor that Leggett shall receive the net income formt he assets of the Turst estate for her life. The net income from the assets of the Trust estate shall be the amount after payment of all taxes; incluidng income taxes, ad valorem taxes, and personal taxes; costs of administration of the Trust estate; insurance costs; and maintenance costs of Trust assets. The maintenance of Trust assets shall be at the sole discretion of the Successor Trustee. It is clear from the record there was a need to have the trial court determine what trust expenses Trustee was to deduct from Appelle’s life interest income for that year. The trial court heard evidence and adopted Appelle’s position that she was entitled to $11,813.83. The trial court again heard evidence and argument on this issue and gave credit for the first quarterly income payment of $3,986.40 she did receive. The trial court award did not includ deductions requested by Trustee for funeral expenses of $8,679.51 or Trustee’s request to deduct attorney fees paid to Trustee’s former attorney. The trial court award is not against the weight of the evidence and we find no error. The trustee continued to refuse to regularly pay any net income. There was hostility between the Trustee and AppelleE. Trustee was a contingent beneficiary of Trust. There was concern about Trustee’s interest as a beneficiary of Trust and possible influence on his conduct as antagonistic to Appellee. A trial court has broad discretion to entertain removal of a trustee after hearing and fill such trustee vacancy.
An experienced living trust attorney like Brent D. Coldiron, knows what to do in these situations. His fees are reasonable. The best money ever spent is to get good legal advice before signing your name to something. Contact Brent at (405) 478-5655 or 737-2244. His website is Brent’s Website.