Lane v. Caler
2013 MT 108
Mont.2013Background
- Maxine Lane created the Maxine Lane Irrevocable Trust with her daughter Linda as Trustee; the Trust's sole asset was Maxine's residence and it prohibited encumbrances.
- The Trust provides that if the residence is sold during Maxine's lifetime, $50,000 must be distributed to Homer Steiner III and $50,000 to Karl Steiner, totaling $100,000.
- The sale of Maxine's residence occurred in July 2011, generating $176,469.16 in net proceeds for the Trust.
- Maxine objected to the $50,000-per-brother distributions, arguing the proceeds should be used to buy her a new residence.
- The District Court granted summary judgment to Linda, holding the Trust required the $50,000 distributions; Maxine appealed.
- The Montana Supreme Court affirmed, ruling the Trust language clearly directed the $50,000 distributions and could not be amended to eliminate them.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trust requires $50,000 distributions on sale | Lane: distributions would defeat housing purpose | Caler: language mandates distributions | Yes, distributions required |
| Whether the primary housing purpose overrides distributions | Lane: housing purpose overrides distributions | Caler: both purposes operate; distributions lawful | No, both purposes coexist; distributions must occur |
| Whether the trust may be amended to eliminate distributions | Lane: amendment allowed | Caler: irrevocable and prohibitions prevent elimination | No, amendment cannot eliminate distributions |
Key Cases Cited
- In re Charles M. Bair Family Trust, 2008 MT 144 (Mont. 2008) (trust language contains clear directives to trustees; interpret to give effect to all provisions)
- In re Estate of Snyder, 2000 MT 113 (Mont. 2000) (interpretation should give words their ordinary meaning and effect)
- In re Cecilia Kincaid Gift Trust for George, 2012 MT 119 (Mont. 2012) (trust interpretation principles applied to grantor trust decisions)