Smith v. Smith
392 P.3d 985
Utah Ct. App.2017Background
- Sharon and Keith Smith created the Smith Family Trust in 2006 composed of two sub-trusts (Keith L. Smith Trust — KLS; Sharon L. Smith Trust — SLS) and executed Schedule A allocating listed assets to KLS, SLS, or KLS & SLS.
- Schedule A §2 (Financial Accounts Provision) broadly declared that listed accounts and “all new accounts … in any and all other financial institutions” would be owned equally by KLS & SLS.
- Schedule A §4 (Partnership Provision) specifically allocated "all interest of Sharon L. Smith in and to Luveda Fincher Family Limited Partnership" to SLS.
- After Sharon’s mother died in 2012, Sharon received a distribution from the Family Partnership and deposited the check into two new money-market accounts in her name.
- The trial court held the distribution remained Sharon’s separate property under the Partnership Provision and did not convert to joint property under the Financial Accounts Provision; it awarded Sharon the inheritance but ordered alimony to Keith. Keith appealed the ownership ruling.
Issues
| Issue | Plaintiff's Argument (Keith) | Defendant's Argument (Sharon) | Held |
|---|---|---|---|
| Whether Sharon’s partnership distribution became joint trust property when deposited in new bank accounts | Financial Accounts Provision is broad: any new financial accounts are owned equally, so deposit converted the funds to joint property | Partnership Provision specifically gives Sharon “all interest” in the partnership, including distributions, so the funds remain Sharon’s separate property despite deposit | Court held Partnership Provision is a specific exception to the general Financial Accounts Provision; distribution remained Sharon’s separate property |
Key Cases Cited
- Stonehocker v. Stonehocker, 176 P.3d 476 (Utah Ct. App. 2008) (abuse-of-discretion standard for property distribution in divorce)
- Hull v. Wilcock, 285 P.3d 815 (Utah Ct. App. 2012) (trust interpretation is question of law reviewed for correctness)
- Bakowski v. Mountain States Steel, Inc., 52 P.3d 1179 (Utah 2002) (interpreting instrument from its four corners; plain meaning governs unambiguous text)
- Big Cottonwood Tanner Ditch Co. v. Salt Lake City, 740 P.2d 1357 (Utah Ct. App. 1987) (reconcile seemingly conflicting contract provisions when reasonable)
- Encon Utah, LLC v. Fluor Ames Kraemer, LLC, 210 P.3d 263 (Utah 2009) (avoid interpretations that render provisions meaningless)