Estate of Baumgardner v. Ready, 2012 Miss. LEXIS 103

Fifteen years of litigation over two testamentary trusts; Arrington, conservator for Emogene, claims mismanagement and lack of accounting by trustee Ready; chancery court ruled for Ready; appeal to this Court.
Harold Baumgardner died 1979; will created a marital deduction trust and a family trust funded by timberland; Emogene was life beneficiary of the marital trust income.
Family trust provisions were revoked by codicil, directing corpus to Emogene and income to Emogene with ultimate distribution to charities after Emogene’s death; home-place timber and other land tied to remainder beneficiaries.
Timber sales were ordered to protect capital value; proceeds allocated between trusts; Emogene’s conservatorship received funds for support.
Chancellor initially found no accounting required and approved timber-sale allocations; on appeal, Court remands for an accounting and for proper allocation of timber proceeds.
On remand, Court also requires reimbursement of Emogene’s conservatorship expenditures and clarifies heirs’ and charities’ interests in timber proceeds.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Subject matter jurisdiction of the chancery court	Arrington asserts trust administration falls within chancery jurisdiction.	Ready argues lack of subject-matter jurisdiction since private trust action outside estate administration.	Chancery court has subject-matter jurisdiction over trust administration claims.
Standing to sue	Arrington, as conservator and as holder of vested remainder, has standing to sue.	Ready contends Arrington lacks colorable interest.	Arrington had standing as conservator and holder of vested remainder.
Allocation of timber sale proceeds from home-place	Timber proceeds from home-place belong to Arrington and Charlie as remaindermen.	Charities should receive proceeds from the rest of the family trust.	Home-place timber proceeds belong to Arrington and Charlie; rest of timber proceeds to charities; previous allocation to charities was erroneous.
Requirement of an accounting	An accounting is necessary to verify receipts, expenditures, and distributions.	Trustee’s accounting not required due to will provisions and discretionary powers.	Remand for a formal accounting of trust accounts and Emogene’s expenses.
Reimbursement of conservatorship costs	Conservatorship expenses were improperly determined and overbroad.	Chancellor’s amount of reimbursement should stand as proper.	Remand for proper accounting to determine appropriate reimbursement to the conservatorship.

Trustmark Nat’l Bank v. Johnson, 865 So.2d 1148 (Miss. 2004) (trust administration within chancery jurisdiction; duties of trustee)
Learned v. Ogden, 80 Miss. 769 (Miss. 1902) (remaindermen may recover for waste by life tenant harvesting timber)
Bernard v. Bd. of Supervisors, Jackson County, 62 So.2d 576 (Miss. 1953) (timber harvesting by leasehold tenant constitutes waste harming remaindermen)
Threatt v. Rushing, 361 So.2d 329 (Miss. 1978) (timber harvesting by life tenant—need for proper management; waste principles)
Twin States Land & Timber Co., Inc. v. Chapman, 750 So.2d 567 (Miss. Ct. App. 1999) (remaindermen rights in growing timber; waste considerations)
In re Stubbs-Kelley Trust, 573 So.2d 734 (Miss. 1990) (trust accounting waivers do not preclude liability for mismanagement)