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Cason v. Lambert

Court of Appeals of Arkansas, Division III

January 28, 2015

DAREN CASON, APPELLANT
v.
GLADYS LAMBERT and LEONE K. HENDRICKSON, as personal representatives of the Estate of Marie Eackles, Deceased, and UNION BANK & TRUST COMPANY, as Trustee of the Eackles Family Trust, APPELLEES

Page 251

APPEAL FROM THE DREW COUNTY CIRCUIT COURT. NO. CV-2010-144-4. HONORABLE DON GLOVER, JUDGE.

AFFIRMED.

Robert S. Tschiemer, for appellant.

Walter Whit Barton, for appellee.

PHILLIP T. WHITEAKER, Judge. VAUGHT and Hoofman, JJ., agree.

OPINION

Page 252

PHILLIP T. WHITEAKER, Judge

This case requires us to construe a trust agreement in which Marie Eackles, one of the two settlors of a revocable trust, amended the trust after the death of the other settlor, her husband Donald Eackles. Our review encompasses whether the trial court erred (1) by finding that Marie had the power to amend the trust after the death of her husband; (2) in its interpretation of the trust and resultant distribution; and (3) by awarding attorney's fees. Finding no error, we affirm.

I. Facts

J. Donald Eackles and A. Marie Eackles were husband and wife. In 1995, while living in California, they created and funded the Eackles Family Trust. After the creation and funding of the trust, Donald and Marie used trust assets to purchase a house in Monticello, Arkansas. The warranty deed for that house was titled in their personal names as " J. Donald Eackles and A. Marie Eackles." The house in Monticello was never deeded to the trust. Donald and Marie amended the trust several times during their joint lifetimes with the final joint amendment of the trust occurring on March 14, 2000. At that time, they each executed a will.

Pursuant to the terms of the trust, Donald and Marie served as co-trustees during their joint lifetimes, and California law governed. The status of co-trustees terminated upon the death of either Donald or Marie. Upon the death of the first spouse, the trust provided that the surviving spouse became the sole trustee and also provided that the trust assets would be divided into two trusts, Trust A and Trust B. Trust A would consist of the separate property of the surviving spouse and one-half of the community property. Trust B would consist of the separate property of the deceased spouse and one-half of the community property. Upon the death of the surviving spouse, Daren Cason, Marie's nephew and the appellant, was named

Page 253

as the successor trustee and was a beneficiary of the trust.

Donald died in October 2002. Upon his death, Marie continued to serve as trustee under the trust. In that capacity, she did not divide the trust proceeds into the two separate trusts, Trust A and Trust B. After her husband's death, Marie moved to Arkansas and determined that she wanted to further amend the Eackles Family Trust. On March 5, 2004, she executed the following documents: (1) Power of Appointment; (2) Amendment to Eackles Family Trust; and (3) Last Will and Testament of A. Marie Eackles. The Power of Appointment expressly states that A. Marie Eackles is executing the same pursuant to power granted to her by the terms of the trust and that she appointed to her estate all of the property over which she had the power of appointment, including principal and undistributed income in Trust A and principal and undistributed income in Trust B of the Eackles Family Trust. Marie's amendment made the following changes: (1) appointed Union Bank & Trust Company as Successor Trustee; (2) changed the choice of law from California to Arkansas; and, most notably, (3) disinherited Daren Cason and made other changes to the distribution schemes of Trust A and Trust B.

Marie died in June 2008. Pursuant to the 2004 trust amendments executed by Marie, Union Bank & Trust Company began to serve as successor trustee. As successor trustee, it was charged with distributing trust assets. In fulfilling this duty, Union Bank & Trust Company concluded that Marie had the authority to alter the provisions of Trust A but not Trust B. It employed a certified public accountant to perform an audit necessary to determine the valuation of Trust A and Trust B. The accountant concluded that Trust A was composed of 66.9% of the total trust assets and Trust B was composed of 33.1% of the total trust assets. Following the audit, Trust A and Trust B were funded in 2010.

Union Bank & Trust Company filed a petition in the Drew County Circuit Court seeking a declaratory judgment as to the appropriate distribution of trust assets. Daren Cason responded and objected to the petition and proposed distribution. He also filed a counterclaim alleging that Union Bank & Trust ...


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