delivered the opinion of the court:
On Oсtober 31, 2007, plaintiffs Patricia A. Laubner and Pamela A. Larson filed an amended petition to remove codefendant Deborah B. Alley as trustee and to modify the distributions being made from the trusts. On November 30, 2007, defendants, cotrustees Deborah B. Alley and JP Morgan Chase Bank, N.A., filed a motion to dismiss. Following a hearing on January 25, 2008, the trial court granted defendants’ motion to dismiss. Plaintiffs appealed. We affirm.
I. BACKGROUND
William J. Alley, deceased, had four daughters: Patricia A. Laubner (plaintiff), Pamela A. Larson (plaintiff), Sarah A. Manges, and Susan A. Mertz. Patricia has one child, Kelsey L. Dennis. Pamela has three children: Courtney L. Larson, Kristin A. Larson, and William Curvin Larson. Sarah has two children: Emily Manges and Haley M. Manges. Susan has one child, Lawson M. Mertz. Sometime before his death, William married Deborah B. Alley, who would become plaintiffs’ stepmother.
On March 23, 1994, William executed a trust entitled “Irrevocable Split-Dollar Insurance Trust Agreement” (original trust). The trust was between William (grantor) and Deborah (cotrustee) and Bank One, Springfield (cotrustee). Bank One, Springfield has since become JP Mоrgan Chase Bank, N.A. (JP Morgan). The original trust provided that should either Deborah or JP Morgan cease to be a trustee, Deborah could appoint another trustee or, if she did not appoint one, the continuing trustee could appoint a successor. When William passed away in 1996, the principal of the original trust was divided into four separate trusts, one for each of the four daughters.
By the direction of cotrustees Deborah and JP Morgan, plaintiffs’ trusts were further divided as follows. Patricia’s trust was divided into thrеe trusts: (1) the Patricia Laubner Generation Skipping Tax (GST) Exempt Trust #1, (2) the Patricia Laubner GST Exempt Trust #2, and (3) the Patricia Laubner GST Nonexempt Trust (Patricia’s trusts). Likewise, Pamela’s trust was divided into three trusts: (1) the Pamela Larson GST Exempt Trust #1, (2) the Pamela Larson GST Exempt Trust #2, and (3) the Pamela Larson GST Nonexempt Trust (Pamela’s trusts). The record does not indicate how Deborah and JP Morgan administered and/or divided the trusts of Sarah and Susan, although we have no reason to guess that those trusts were handled differently.
As of December 31, 2006, the value of Patricia’s trust was as follows:
Name of Trust Value of Trust
The Patricia Laubner GST Exempt Trust #1 $1,505,291.76
The Patricia Laubner GST Exempt Trust #2 $ 500,798.87
The Patricia Laubner Nonexempt Trust $2,870,407.52
Total Value of Patricia’s Trusts $4,876,498.15
As of December 31, 2006, the value of Pamela’s trust was as follows:
Name of Trust Value of Trust
The Pamela Larson GST Exempt Trust #1 $1,517,285.77
The Pamela Larson GST Exempt Trust #2 $ 508,726.91
The Pamela Larson Nonexempt Trust $2,994.306.39
Total Value of Pamela’s Trusts $5,020,319.07
Patricia’s trusts and Pamela’s trusts were subject to the same distribution standard set forth in the original trust agreement, namely:
“During the Trust Period, the trustees shall hold, invest, and reinvest each share so provided as the principal of a separate trust hereunder, collect the income therefrom and, after deducting from said income all proper charges and expenses, in each year pay at least quarterly to or аpply for the use of such daughter and such daughter’s issue, so much of the net income as the trustees shall deem advisable for the proper care, support, maintenance or education of such daughter of the grantor and such daughter’s issue and shall add to the principal from time to time any balance of net income not so applied. The trustees shall be authorized also to pay to or apply to the use of such daughter and her issue, at any time and from time to time, so much of the рrincipal of such trust (even to the extent of wholly terminating the trust) as the trustees may deem advisable for the proper care, support, maintenance or education of such daughter or her issue or for any other purpose after giving such consideration as the trustees may deem feasible and appropriate to other financial resources available for the purpose to which such payment or application is proposed to be made. In exercising their disсretion with respect to the payment or application of income or principal pursuant to the provisions of this paragraph, the grantor directs his trustees to bear in mind that his primary concern is the comfortable maintenance and support of his daughters during their lifetime.” (Emphases added.)
Under this rather discretionary distribution standard, Deborah and JP Morgan adopted a distribution schedule of $11,500 per month to both Patricia and Pamela. This amounts to an annual distribution of 3.5% of the fair market value оf the trusts.
It appears some exceptions to the steady distribution of funds existed. For example, in 2004, the trustees distributed $54,893 in lump sum to Patricia to pay off her credit card debt and balance owing on her vehicle. During this time, it seems that monthly distributions to Patricia were as high as $12,500 because she purportedly fell on financial hard times due to the loss of her husband’s income. It also seems, based on an admission made in plaintiffs’ complaint, that Patricia and Pamela are reimbursed, or the trustees directly pay, for tuition, fees, and living expenses for plaintiffs’ children, up through and including graduate school. The complaint mentioned one instance where the cotrustees hesitated to pay a “medical bill” for one of the grandchildren, but it appears, based on an admission in the complaint, that this bill was ultimately paid with the use of trust funds.
On March 26, 2007, Patricia and Pamela’s attorney, Sarah Delano Pavlik, wrote JP Morgan to propose a change in the established distribution plan. Attorney Pavlik noted that the monthly distributions came solely from the nonexempt trusts. The nonexempt trusts were subject to the GST tax, which, as of March 2007, was set at a rate of 45%. To avoid imposition of the GST tax upon plaintiffs’ deaths, Pavlik proposed that the distributions from the nonexempt trusts be calculated to liquidate the nonexempt trusts over plaintiffs’ life expectancies, resulting in a monthly distribution of $17,769 for Patricia and $18,536 for Pamela over approximately the next 30 years. Pavlik noted that liquidating the nonexempt trusts of Patricia and Pamela would not put them at risk beсause, in the event they should need additional funds, the assets in their exempt trusts would still be able to provide for them. The cotrustees declined to accommodate plaintiffs’ requests as set forth in the letter.
On July 25, 2007, plaintiffs filed a petition requesting to convert the distribution standard of the trusts and to modify the trust agreement such that the funds be distributed at a rate of 5% of the total fair market value of all of the plaintiffs’ trusts but that the funds only be distributed from the nonexempt trusts. Plaintiffs also requested that, in the event of Deborah’s death or incаpacitation, each respective plaintiff would become cotrustee of her own trusts and have the discretion to appoint a new corporate cotrustee if she so desired.
On August 27, 2007, defendants filed a motion to dismiss. On October 30, 2007, the trial court entered an order cancelling a hearing on the matter; allowing leave to amend the petition; and appointing a guardian ad litem (GAL) for the minor remainder beneficiaries, i.e., Emily and Haley Manges, and future descendants of grantor William Allеy.
On October 31, 2007, plaintiffs filed the amended petition at issue in this appeal, alleging that Deborah in particular acted with an improper motive due to her personal animosity toward plaintiffs. Therefore, plaintiffs requested that the trial court remove Deborah as a trustee and appoint each plaintiff cotrustee of her respective trusts. Plaintiffs further alleged that both trustees breached their fiduciary duty by (1) showing a preference for the remainder beneficiaries by preserving the principal rather than focusing on plaintiffs’ comfortable maintenance, (2) adopting arbitrary distribution standards, and (3) wasting the assets of the trusts by unnecessarily subjecting plaintiffs’ descendants to generation-skipping taxes. Plaintiffs requested that the trustees distribute income so as to deplete the nonexempt trusts over plaintiffs’ lifetimes and that plaintiffs’ attorney fees from the instant case be paid from the nonexempt trust.
On November 30, 2007, defendants filed a motion to dismiss, arguing that the amended complaint did not allege а factual basis for removal of Deborah as cotrustee or for reformation of the trust. See 735 ILCS 5/2 — 615 (West 2006). On January 24, 2008, the GAL for the minor remainder beneficiaries joined in defendants’ motion to dismiss plaintiffs’ amended complaint. Some of the adult remainder beneficiaries of plaintiffs’ trusts, who also happen to be plaintiffs’ children, Kelsey L. Dennis, Courtney L. Larson, Kristin A. Larson, William Curvin Larson, entered an answer in the circuit court asking that plaintiffs’ relief be granted. No adult remainder beneficiary entered a request that the court deny plaintiffs’ relief.
On January 25, 2008, the trial court held a hearing on defendants’ motion to dismiss and granted said motion. The court endorsed the argument of cotrustees’ counsel, that plaintiffs simply failed to allege a basis for removing Deborah as trustee or for modifying the distribution scheme. The court told plaintiffs they could amend their complaint, but plaintiffs did not do so. This appeal followed.
II. ANALYSIS
On appeal, plaintiffs appeal the dismissal under section 2 — 615 of the Code of Civil Procedure (735 ILCS 5/2 — 615 (West 2006)) of their pеtition, which began as follows:
“[Plaintiffs] petition the Court (a) [to] remove Deborah B. Alley as Trustee of the Trusts (as defined below), (b) to appoint Pamela A. Larson as Co-Trustee of the Pamela Trusts (as defined below), (c) to appoint Patricia A. Laubner as Co-Trustee of the Patricia Trusts (as defined below), and (d) to modify the distributions being made from the Trusts as set forth below.”
We will first address whether plaintiffs properly stated a claim for reformation of the trust, especially as this pertains to modifying the distribution scheme. We will then address whether plaintiffs properly stated a claim for removing Deborah as a trustee and appointing plaintiffs as successor trustees.
A dismissal motion under section 2 — 615 attacks the legal sufficiency of the complaint. Canel v. Topinka,
However, the general policy favoring a liberal construction of the pleadings as described in Canel cannot cure a plaintiff’s failurе to set forth well-pleaded facts. See Teter v. Clemens,
A. Current Distribution Scheme
1. Distribution Amount
Plaintiffs pleaded that the cotrustees breached their fiduciary duties by “arbitrarily” setting the distribution rate at 3.5% of the principal per year, resulting in payments of $11,500 per month for each plaintiff. Plaintiffs believe that a distribution scheme that amounts annually to only 3.5% of the value of the principal of the trust, so that the value of the principal is protected, thwarts William’s stated purpose of providing for the comfortable maintenance and support of his daughters over their lifetimes and has the effect of favoring the remainder beneficiaries over plaintiffs. Plaintiffs also pleaded that the distribution amount (i.e., $11,500 per month each) is arbitrary because the cotrustees did not sufficiently communicate with plaintiffs to see whether that amount would be enough to sustain their current lifestyles.
A trustee is to exercise the same degree of care in managing a trust as persons of prudence and intelligence exercise in their own affairs. Durdle v. Durdle,
That being said, a court should not interfere with a trustee’s exercise of discretion given to him or her by thе trust instrument so long as the trustee does not act in a wholly unreasonable and arbitrary manner. Chicago Title & Trust Co. v. Chief Wash Co.,
We cannot say the cotrustees are acting in a “wholly unreasonable and arbitrary” manner because they have sought to protect the principal of the trust, especially where they continue to distribute the substantial sum of $11,500 per month to each plaintiff, not including educational and living expenses for plaintiffs’ children. See Chicago Title,
“The trustees shall *** collect the income [from the trusts] and *** pay *** so much of the net income as the trustees shall deem advisable for the proper care, support, maintenance or education of such daughter *** and shall add to the principal from time to time any balance of net income not so applied.”
From this clause, it seems clear William envisioned some sort of preservation of thе principal. In fact, William appears to have envisioned that the income earned on the trust could potentially exceed the amount necessary to provide for his daughters’ comfortable support and said excess would therefore be used to grow the principal of the trust. Simply because William authorized depletion of the principal in the event that his daughters’ needs were not being met does not mean that the cotrustees are breaching their fiduciary duty by holding off on that аuthorization. Nor does it mean that the co-trustees are breaching their fiduciary duty by favoring the remainder beneficiaries over plaintiffs.
Plaintiffs cite Northern Trust Co. v. Heuer,
In contrast, the cotrustees here merely adopted a conservative and responsible distribution plan that incidentally benefits the remainder-men by protecting the principаl. We note it can just as well be said that protecting the principal benefits plaintiffs; cost of living is sure to rise, and plaintiffs themselves state they expect to live another 30 years. The cotrustees are not acting partially by protecting the principal of the trust.
Plaintiffs pleaded that cotrustees have never met with them in person to establish that $11,500 per month is a sufficient amount of money to sustain their respective lifestyles. Plaintiffs cite section 50 of the Restatement of Trusts, Comment e, for the prоposition that the “trustee[s have] a duty to act in a reasonable manner in attempting to ascertain the beneficiary’s needs.” Restatement (Third) of Trusts §50, Comment e(l), at 271 (2003). Plaintiffs argue that the trusts contain millions of dollars to properly provide for the comfortable life of plaintiffs, not for preservation of the principal of the trust, and that the current distribution rate of $11,500 per month caused plaintiffs to lower their standard of living. However, no requirement exists that trustees meet in person with beneficiaries.
More to the point, plaintiffs have not set forth any facts to show why $11,500 per month is not enough to sustain their respective lifestyles in a manner that is “comfortable.” Plaintiffs make no allegations of debt (aside from the credit debt that trustees paid off), steep mortgage payments, or any other expense that we can imagine that would result in $11,500 per month being insufficient. Without pleading facts to support the assertion that $11,500 per month is insufficient to support a comfortable lifestyle, said assertion is merely a conclusoiy factual allegation. See Time Savers,
2. Allegation of Waste: the Nonexempt Trust
Plaintiffs complain that the cotrustees are subjecting the trusts to waste by refusing to distribute from the nonexempt trust at a rate that would lead to its depletion by the end of plaintiffs’ respective lives and thereby avoid any generation-skipping tax on the funds in the nonexempt trust. Such a depletion of the nonexempt trust would lead to a distribution rate of approximately $18,000 per month for each plaintiff. Plaintiffs cite Warner v. Rogers,
Plaintiffs have not pleaded sufficient facts to show the cotrustees are committing waste by failing to deplete the nonexempt trust. The only fact that plaintiffs pleaded in support of their claim that failing to immediately start depleting the nonexempt trust constitutes waste is that nonexempt trust funds are currently subject to a 45% generation-skipping tax. However, plaintiffs predict they will each livе another 30 years. The tax laws might be different at that time. The cost of living will have risen. Plaintiffs might require expensive end-of-life care. It seems the trustees are acting prudently at this stage, planning ahead for the aforementioned concerns rather than depleting the trust at a steady rate.
Plaintiffs have not set forth facts to establish a breach of fiduciary duty, and therefore reformation of the distribution scheme would not be appropriate. Generally, reformation is appropriate only in extreme circumstances, such as where the trust as written actually frustrates the grantor’s intent because circumstances evolved in a manner that the grantor could not have anticipated. Dyer v. Paddock,
B. Whether Plaintiffs Stated a Claim for Removal
Plaintiffs argue that they properly stated a claim for removal of Deborah as cotrustee. In support of their claim to remove Deborah, plaintiffs alleged in their petition that Deborah acted with “improper motive” and that she improperly managed the trusts. In regard to their claim that Deborah acted with improper motive, plaintiffs set forth the following circumstances that led them to believe that Deborah had a great deal of animosity for them. Following William’s death, Patricia provided the local nеwspaper with family information to be used in the obituary. Apparently, Deborah felt the information was too personal to be released to the public. Deborah did not attend the memorial service for William that Patricia organized, even though Deborah was in town on the date of the service. Also in 1996, more than 10 years prior to the instant action, Deborah went to Patricia’s house and accused Patricia of being responsible for William’s suicide. At a date not clear from the record, Dеborah invited all three of William’s daughters except for Patricia to her son Bray ton’s wedding. On at least one occasion, Deborah denied Pamela access to visit William’s ashes, which Deborah interred in a gated community. Plaintiffs contend that Deborah refused to communicate with them, noting that she did not reply to a letter from Patricia dated August 18, 2003, or to the letter from attorney Pavlik dated September 7, 2006. Plaintiffs believe that Deborah refused to increase distributions because of this alleged persоnal animosity.
A court of equity has inherent powers to remove a trustee for breach of trust, misconduct, or disregard of his fiduciary duties. Chicago Title,
In dismissing plaintiffs’ claim for removal of Deborah, the trial court stated:
“The fact that they don’t like their stepmother is not sufficient to carry the day here. If you want time to amend, I’ll give you time to amend, but you’re going to have to tell me something more than you are at this point.”
Plaintiffs did not take advantage of their opportunity to amend the complaint. See Knox College,
This case is distinguishable from other cases we were able to find regarding removal of the trustee where personal animosity existed between the trustee and the beneficiary. For example, in Rennacker, in addition to the hostility between the trustee and the beneficiary, the trustee also sold thе trust residence and put the sale proceeds under his own social security number, constituting a “questionable transaction at best.” Rennacker,
Here, it does not appear that the alleged personal animosity endangered the trust fund. As discussed above, there is nothing unreasonable about the way that Deborah has been coadministering the trust. As such, plaintiffs have not pleaded sufficient facts to justify Deborah’s removal as trustee. Because plaintiffs have not pleaded sufficient facts to justify Deborah’s removal, they certainly have not pleaded sufficient facts to warrant appointing themselves as successor trustees.
C. Attorney Fees
Finally, we affirm the trial court’s denial of plaintiffs’ request for attorney fees in this matter. At the trial court’s discretion, it may order that the trust pay plaintiffs’ attorney fees where the plaintiffs’ actions in bringing a lawsuit somehow confer a benefit on the trust, but will not award fees where plaintiffs seek personal benefits. Stein v. Scott,
III. CONCLUSION
For the aforementioned reasons, we affirm the trial court’s judgment.
Affirmed.
TURNER and STEIGMANN, JJ., concur.
