Brief Fact Summary. The Appellant trustee argues that the district court erred in ordering the early termination of a trust after all beneficiaries consented and sought its termination.
Synopsis of Rule of Law. When all beneficiaries of a trust consent they can compel its early termination on the grounds that it lacks any remaining material purpose.
Is a trustee an “aggrieved party” that has standing to appeal an order terminating a trust?
Can the beneficiaries of a trust compel its termination when there is no material purpose in continuing the trust and all beneficiaries consent?
Can a trustee be required to personally bear the expense of defending a trust?
Held. Judgment affirmed in part and reversed in part.
Yes. In order to carry out the material purpose of a trust, a trustee has an obligation to defend the trust. The Wyoming statute provides that a trustee has standing to “prosecute or defend actions, claims or proceedings for the protection of trust assets. . ..”
Yes. This court adopts the principles of Section: 337 of the Restatement (Second) of Trusts as the law of Wyoming. When all beneficiaries of a trust consent to its termination, and there remains no material purpose in continuing the trust, the beneficiaries can compel its termination. In this case all beneficiaries consented to termination and there remained no material purpose for continuing the trust.
No. A trustee has the power to maintain legal actions to defend the trust but they are not required to personally bear the expenses of such defense. In this case the trustee should not have been required by the trial court to post a supersedeas bond at its own expense.
Discussion. The majority concludes that there is no material purpose for the continuation of the trust. Grant E. Miller renounced and assigned his monthly interest support to his children therefore it is no longer a material purpose of the trust. In addition educational support was only a material purpose until the children reached age 35. At time of the suit all beneficiaries had reached age 35. The appellant trustee argued that there were unborn contingent beneficiaries who did not consent to the termination. However the court finds that the terms of the trust make clear that there are no unborn, contingent beneficiaries. In directing that the trust be divided in “. . . as many equal shares as there are then living children. . . ” it provides for per capita distribution and no heirs of Davin, Hickey, or Miller, Jr. could be involved.