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Roberson v. Roberson

Court of Appeals of Arkansas, Division I

September 19, 2018

JOSEPH ROBERSON AND TAWNY ROBERSON APPELLANTS
v.
JAMES ROBERSON APPELLEE

          APPEAL FROM THE BOONE COUNTY CIRCUIT COURT [NO. 05CV-12-187] HONORABLE GORDON WEBB, JUDGE

          Brockett Law Firm, by: Christopher Dewitt Brockett; and Richard F. Hatfield, P.A., by: Richard Franklin Hatfield, for appellants.

          Jones, Jackson & Moll, PLC, by: Mark Moll and Kathryn A. Stocks; and Sprott, Golden & Bardwell, by: Kelsey K. Bardwell, for appellee.

          PHILLIP WHITEAKER, JUDGE

         The appellants, Joseph Roberson and Tawny Roberson, filed a complaint in the Boone County Circuit Court against James Roberson (Jim), the appellee. They sought an order funding an irrevocable credit shelter trust (CST), under the terms of the Roberson Living Trust (the Trust) and requested that the court declare the first amendment (First Amendment) to the Trust invalid. The court entered judgment dismissing their complaint. They appeal, arguing that the court erred in entering this judgment. We reverse the judgment and remand the case to the circuit court.

         I. Background

         Joe Roberson, Sr., (Joe Sr.) and Cleo Roberson were husband and wife. They were the parents of five children, including twin sons, Jim Roberson and Joe Roberson, Jr. (Joe Jr.).[1] Joe Jr. is the father of Joseph and Tawny. In 1972, Joe Sr. and Cleo purchased over 1800 acres of farmland in Omaha, in Boone County, Arkansas. They used the land primarily to raise cattle. Jim joined the farm operation at its inception. Joe Jr. later joined the operation with his wife, René. Joe Jr. and René lived and worked on the farm for approximately two years, however, before Joe Jr. obtained employment with the United States Department of Agriculture (USDA) in California. After the move to California, Joe Jr. returned to the farm in the summer to help while Jim remained and helped his parents run the farm.

         Joe Sr. suffered a heart attack in 1993. Soon after, he and Cleo made Jim a partner in the farming operation because he had lived and worked on the farm with his parents for over twenty years. They also executed a quitclaim deed giving Jim a one-half interest in the farmland in Omaha.

         Three years later, in June 1996, Joe Sr. and Cleo executed the Trust. Joe Sr. and Cleo were the trust grantors, the original trustees, and the primary beneficiaries of the Trust. Joe Sr. and Cleo mandated, among other things, in article two, subsection A, that upon the death of either, the surviving spouse "shall" fund a separate CST to take advantage of the $600, 000 estate-tax exemption that existed at the time.[2] They named Jim as the successor trustee of the CST and directed a plan of distribution for the CST. Joe Sr. and Cleo specifically provided in article two, section A, that upon the death of the survivor of Joe Sr. and Cleo, the farm land would go to Jim and Joe Jr. as tenants in common, taking into consideration any previous transfers of land to Jim. Joe Sr. and Cleo specifically stated the intent of the CST plan of distribution was to equalize the amount of farmland passing to each son and directed that any asset of Jim or Joe Jr. would pass to his issue by representation if either Jim or Joe Jr. predeceased Joe Sr. or Cleo. Joe Sr. and Cleo made the plan of distribution and all the terms of the CST irrevocable and unamendable upon the death of either Joe Sr. or Cleo.[3] Joe Sr. died in April 1997. Cleo never funded the CST despite the mandatory language in the article two, section A.

         In September 2000, Joe Jr. told his family that he had terminal brain cancer. Approximately one month later, Cleo executed the First Amendment to the Trust. In this amendment, Cleo deleted the identical plans of distribution in the Credit Shelter Trust and the Roberson Living Trust which gave the land to Jim and Joe Jr. as tenants in common. Instead, she directed that upon her death the successor trustee conveys any remaining interest in the farm to Jim. Within a few months of the execution of the First Amendment, Joe Jr. died in April 2001. Joseph and Tawny, his children, are his surviving heirs.

         Cleo died in June 2011. After her death and pursuant to the terms of the First Amendment, Jim, as the successor trustee, executed a deed transferring his parents' share of the farmland, which had been held in the Trust, to himself.

         Joseph and Tawny filed a complaint against Jim arguing that Cleo, their grandmother, was required to transfer the farmland to the CST when Joe Sr. died, that the terms of the CST created an irrevocable and unamendable plan of distribution, and that they were entitled to their father's distribution of the farmland as his descendants. They further argued that the First Amendment was invalid.

         The circuit court dismissed Joseph and Tawny's claims, concluding that the plain language of the Trust indicated that Cleo was not obligated to fund the CST at Joe Sr.'s death; therefore, she was free to amend the plans of distribution under the CST and the Trust. The circuit court also found that Joe Sr. and Cleo executed the Trust with the intent to keep the farmland intact and within the family after their deaths, or in other words, free from the influence of their daughter-in-law, René Roberson.

         II. Stand ...


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