In re Pike Family Trusts
38 A.3d 329
Me.2012Background
- Clifton died in 2003 and Doris died in 2007; Clifton's will created a spendthrift family trust for his wife and children.
- Doris's estate was not funded and remained separate; Clifton's trust’s main asset is an apartment building.
- Doris appointed Buhrman as independent trustee after the bank declined to serve; Doris did not exercise the power of appointment.
- Joyce and Elaine petitioned to combine the trusts, fund Doris’s estate into Clifton’s trust, and terminate the trusts; Buhrman opposed except to consolidate assets.
- The probate court granted the petition; Buhrman appeals, arguing the spendthrift clause prevents termination; issue centers on spendthrift provisions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the spendthrift clause preclude termination? | Buhrman argues yes; spendthrift is a material purpose. | Joyce/Elaine argue no; removal of spendthrift presumption allows termination. | No; spendthrift is not a material purpose to prevent termination. |
| May trusts be combined and Doris’s estate transferred under the relevant code sections? | Buhrman contends termination defeats settlor’s intent. | Petitioners seek to consolidate and terminate with consent of beneficiaries. | Authorized if continuance not necessary to achieve trust purposes and all beneficiaries consent. |
| Is spendthrift a material purpose under §411(3) after 2005 UTC changes? | Yes; presumption persists without explicit showing. | No; §411(3) rejects presumption of material purpose. | Buhrman failed to prove spendthrift was a material purpose. |
Key Cases Cited
- University of Maine Found. v. Fleet Bank of Me., 817 A.2d 871 (Me. 2003) (holding spendthrift not presumed to be a material purpose prior to UTC adoption)
- White v. Fleet Bank of Me., 875 A.2d 680 (Me. 2005) (trusts may be terminated when purposes accomplished and all beneficiaries consent)
- Estate of Silsby, 914 A.2d 703 (Me. 2006) (interpretation of wills and extrinsic evidence considerations)
- Guardianship of Jewel M., 2 A.3d 301 (Me. 2010) (judicial notice and records in related cases)