Buckalew v. Arvest Trust Co.Buckalew v. Arvest Trust Co.
| Appellant Kathy Buckalew is the sole life beneficiary of a trust established by her mother, fern Stafford. After her mother’s death, Buckalew filed a petition seeking to terminate the trust. Appellee Arvest Trust Company became the successor trustee upon the settlor’s death and оpposed the termination. At trial, the Benton County Circuit Court granted Ar-vest’s motion for directed verdict. In this appeal, Buckalew argues that the circuit court misapplied the governing statutory provisions, erred in finding that there was no evidence of a change in circumstances bеtween the establishment of the trust and the settlor’s death, erred in finding that Buckalew failed to rebut a statutory presumption, and erred in refusing to consent to the termination of the trust. We affirm the circuit court.
Following the death of Buckalew’s father in 1997, her mother established the Fern I. Stafford Trust (the Fern Trust) with Buckalew as the sole life beneficiary. The dispositive provisions of the original trust instrument provided that, upon Stafford’s death, the assets of |2the trust would be transferred to Buckalew (then known as Kathy Anderson) as trustee of the Kathy Anderson Trust (Anderson Trust). Bucka-lew,
In September 1999, Stafford amended and restated the Fern Trust. In its dis-positive provisions, the amended trust instrument specified that, upon Stafford’s death, the Fern Trust would terminate and its assets would be conveyed to Arvest as trustee of the Anderson Trust. The amended trust instrument created the Anderson Trust for the рrimary purpose of providing for Buckalew’s care, comfort, support, welfare, and benefit. The disposi-tive provisions of the Anderson Trust were that Buckalew was not to receive a distribution from the trust principal or income until the year in which she attained the age of sixty unlеss she developed a serious medical hardship or disability. Beginning in the year in which she turned sixty,
IsAfter Stafford’s death in September 2010, Buckalew and the contingent beneficiaries of the Fern Trust entered into a family settlement agreement to terminate the Fern Trust and distribute the assets to the Kathy Buckalew Revocable Trust (Buckalew Trust), which was created by the аgreement. The agreement gave Buckalew discretion to receive income from the Buckalew Trust and to invade the corpus.
In May 2011, Buckalew filed a petition to terminate the Fern Trust. She sought a declaratory judgment terminating the trust pursuant to Arkansas Code Annotated seсtion 28-69-401(a) (Repl.2012). Ar-vest answered and opposed the termination or modification. Citing Arkansas Code Annotated section 28-73-411(c) (Repl.2012), Arvest contended that a spendthrift provision was a material purpose of the trust that would be defeated if the trust were terminated.
Buckalew mоved for partial summary judgment. In her motion and accompanying brief, she argued that section 28-69-401 provided a separate procedure for modification or termination of a trust, making section 28-73-411 inapplicable. In response, Arvest argued that a trust containing a spendthrift рrovision could not be terminated by the consent of the beneficiaries. Arvest further argued that there were no unforeseen circumstances that would warrant modification or termination of the trust, regardless of whether section 28-73-411 or section 28-69-401 applied. The circuit court denied the motion from the bench.
The matter proceeded to trial. At the close of Buckalew’s case, Arvest moved for a directed verdict, and the circuit court granted the motion. In its judgment, the circuit court found that Buckalew presented no evidence of any change of circumstance not foreseen by Rthe settlor and that she failed to prove that continuance of
For reversal, Buckalew argues that the circuit court erred by (1) applying section 28-73-411 to her petition seeking termination or modification of the Fern Trust, (2) finding that there was no evidence of a change in circumstances between the September 1999 amendment of the Fern Trust and Stafford’s death in September 2010; (3) finding that Buckalew presented no evidence to rebut the presumption that the spendthrift provision was a material purpose of the trust, and (4) refusing to consent to the termination of the trust.
In determining whether a directed verdict should have been granted, we review the evidence in the light most favorable to the party against whom the verdict is sought and give it its highest probative value, taking into account all reasonable inferences deducible from it. Woodall v. Chuck Dory Auto Sales, Inc.,
Buckalew contends that Arkansas Code Annotated section 28-69-401 applies. That section, in pertinent part, provides as follows.
(a) By written consent of the settlor and all named beneficiaries of a trust or any part thereof, regardless of any spendthrift or similаr protective provisions, the trust or part thereof may be revoked, modified, or terminated upon a finding by the court having jurisdiction over the trust, or otherwise being of competent jurisdiction, that the trust’s purposes, as expressed in or implied by the circumstances surrounding the trust, as a result of circumstances not foreseen to the settlor are not effectively being fulfilled or are frustrated.
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(c)(1) For purposes of this section, consent may be given on behalf of the estate of a deceased settlor by the court on a finding that there is general family benefit to the living named beneficiaries and their families.
(a)(1) A noncharitable irrevocable trust may be modified or terminated upon consent of thе settlor and all beneficiaries, even if the modification or termination is inconsistent with a material purpose of the trust.
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(c) A spendthrift provision in the terms of the trust is presumed to constitute a material purpose of the trust.
Buckalew argues that the circuit court erred by grafting the provisions of section 28-73-| ⅜411 onto
We hold that the trial court did not err in determining that Buckalew failed to present substantial evidence of any unforeseen circumstances that would frustrate the purpose of the Fern Trust. According to the 1999 trust instrument, thе primary purpose of the trust was to provide for Stafford’s care, support, and welfare, while the primary purpose of the Anderson Trust was 17to provide for Buckalew’s care, comfort, support, welfare, and benefit. Buckalew .argues that the trust’s primary purpose wаs being frustrated due to the significant overfunding of the trust coupled with an arbitrary limitation on distributions. The further argues that the trust’s purpose was frustrated when she had to provide for Stafford’s care and treatment, all of which interfered with her employment. This, in turn, limited the amount Buckalew was to recеive from the trust.
The only changes of circumstances mentioned by Buckalew were that she did not believe that her mother- thought that she would die before Buckalew turned sixty and that her mother’s illness prevented her (Buckalew) from working full time, impacting the amount of the distributions she would receivе. We cannot say that the timing of Stafford’s death constitutes an unforeseen change of circumstances because she knew that she was going to die at some point, and that is why she prepared the trust — to plan for events following her death. Ñor can we say that Buck-alew’s hаving to care for her mother was an unforeseen event , that could disrupt Buckalew’s employment. The terms of the trust appear to anticipate a possible disruption to Buckalew’s employment by providing a formula to be used in determining the amount of distributions she would receive. The formula, based on a three-year average of Buckalew’s income, would take into account and minimize any disruption of her employment. Nor can we say that the funding level of the trust was unforeseen. Although the trust in the present case had grown from approximatеly
Buckalew’s third point asserts that the circuit court erred in determining that she failed to rebut the presumption that the spendthrift provision was a material purpose of the trust. She argues that her mother’s purchase of various annuities and life-insurance produсts naming Buckalew as beneficiary shows an intent that the estate be passed to Buckalew. However, as Buckalew acknowledges, each of those financial instruments was later amended to name the trust as the beneficiary, with Buckalew being a secondary beneficiary. The fact that the 1997 trust was referenced when the changes were made is not as significant as Buckalew asserts. It is the fact that the trust was named as the beneficiary instead of Buckalew, not the particular trust instrument that is important.
As part of this point, Buckalew argues that, while a cоmplete termination of the trust may defeat the spendthrift purpose, the court should nevertheless consider a partial termination of the trust. Although her complaint contained a count seeking modification of the trust and she mentioned this in her summary-judgment brief, Buckalew never aсtually pressed this argument on the circuit court and the circuit court did not rule on whether such a modification would be appropriate. It is an appellant’s responsibility to obtain a ruling to preserve an issue for appeal. Miller v. Ark. Dep’t of Fin. & Admin.,
Finally, we cannot address Bucka-lew’s fourth point in which she argues that the circuit [9court erred in refusing to consent to the termination of the trust. The circuit court did not specifically address whether there would be a general family benefit to the living beneficiaries if the trust were terminated. See
To the extent that the argument is preserved for our review, it overlaps much of Buckalew’s argument under her first point. However, as pointed out under the discussion there, Buckalew focuses on the fact that all the beneficiaries havе consented, not the second part of
Affirmed.
Notes
. Buckalew was born in 1953.
. Nadine Cox is Buckalew’s aunt, the sister of Buckalew’s late father.
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