Beaver v. Craven

19 Am. Samoa 2d 14
CourtHigh Court of American Samoa
DecidedApril 10, 1991
DocketCA No. 72-90
StatusPublished

This text of 19 Am. Samoa 2d 14 (Beaver v. Craven) is published on Counsel Stack Legal Research, covering High Court of American Samoa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beaver v. Craven, 19 Am. Samoa 2d 14 (amsamoa 1991).

Opinion

On Motion for Summary Judgment:

In this case we must construe the terms of a trust instrument to determine how the settlors intended to distribute its assets when the first settlor died.

Facts

The following facts appear undisputed: In 1983 plaintiff Lefaga Beaver and her late husband William Beaver were the majority stockholders in South Pacific Traders, Inc., a corporation operating in [17]*17Nu’uuli. On December 19, 1983, they signed a trust instrument1 creating an inter vivos trust ("Beaver Family Trust"), transferred all their shares2 of South Pacific Traders, Inc. (hereinafter "S.P.T. stock") into the trust as the original corpus of the Trust Estate, Art. I.A, and appointed themselves as trustees. Art. II. A. Mr. Beaver added a codicil to his will on the same day giving, devising, and bequeathing to the trust any property not already transferred to it when he dies ("pour-over provision"). No other assets were transferred to the trust during their joint lifetimes. When Mr. Beaver died on September 18, 1984, certain events occurred under the terms of the trust: 1) the trust became irrevocable, Art. IV; 2) defendants Barrett and Cravens became trustees, Art. II.B; 3) the Trust Estate (including "all property received as a result of the Decedent’s death") divided into two trusts administered separately--a Survivor’s Trust and a Decedent’s Trust — and the assets of the inter vivos trust were distributed between them according to the terms of the trust agreement, Art. V. The allocation of assets to the Survivor’s Trust vested in its trustees immediately; the Survivor’s interest in her trust also vested immediately, Art. V., and she received a power of appointment over the principal and undistributed income of the Survivor’s Trust. Art. VLB.

On February 21, 1990, defendants Cravens and Barrett called a special shareholders’ meeting of South Pacific Traders, Inc.. Claiming authority as r-ole trustees of the Decedent’s Trust (which they maintained now held the. S.P.T. stock per the allocation of assets required by the trust instrument), they removed the Board of Directors and elected a new board which included Mrs. Beaver and Muliufi Hanneman. Complaint and Answer, para. 16. The new board immediately met (without plaintiff and Hanneman) and elected Cravens to replace plaintiff as president and Abraham Orcini to replace Hanneman as secretary.

Since at least May 1990, plaintiff has not been allowed to function as an officer of the corporation or a trustee of either the Decedent’s or Survivor’s Trust. On or about July 2, 1990, defendants Cravens and Barrett received a letter from plaintiff in which she exercised her power of appointment under the Survivor’s Trust to direct [18]*18them as trustees to transfer title to all S.P.T. stock held in the Survivor’s Trust into her name. As such transfer of S.P.T. stock would make her the major shareholder, she then requested that defendants (as named President and Chairman of South Pacific Traders) call a special shareholders meeting. Defendants responded with the claim that all of the S.P.T. stock comprising the original Trust Estate of the inter vivos trust had been allocated to the Decedent’s Trust according to the terms of the trust instrument. Plaintiff then filed suit. Both parties have moved for summary judgment on the following issues:

Discussion

I. Which Trust Received the S. P. T. Stock Upon the Death of Mr. Beaver?

The Decedent’s Trust consists of all assets in the inter vivos Trust not allocated to the Survivor’s Trust. Art. V.B. The Survivor’s Trust consists of the separate property of the survivor plus Marital Deduction Property, defined as:

Out of the other assets subject to the terms of this Trust, including those received by the Trustees upon, or by reason of the death of the Decedent, which are e'tfible to satisfy the marital deduction, property equal in value to the amount of the maximum "Marital Deduction" allowable in finally determining the Federal Estate Tax in the Estate of the Decedent less the value of all assets or interest which pass, or have passed to the survivor other than by the terms of this Trust, and which are eligible to satisfy said marital deduction.
In making the selection and allocation of such assets, the Trustees shall do so in a manner to fully utilize the marital deduction .... No assets shall be included in this distribution with respect to which a marital deduction is not allowed, or not allowable if included. In the event a distribution or distributions are made for the Decedent’s Probate Estate which shall saturate and fully utilize the Federal Estate Marital Deduction, then no additional distribution shall be made to the SURVIVOR’S TRUST under the provisions of this subparagraph.

[19]*19Art. V.A.(2) (emphasis added). Since the instrument does not define "other assets” or "maximum Marital Deduction," the Court must construe these terms to ascertain and give effect to the settlors’ intention in creating the trust. In doing so we take into account the document’s subject matter, scheme, and plan, as well as the relationship of the parties; favor effectiveness of the instrument and validity of the trust (if possible); favor beneficiaries rather than settlors; and give effect to the whole instrument by reconciling repugnancies and avoiding surplusage. 76 Am. Jur. 2d Trusts § 17 (1975); 90 C.J.S. Trusts §§ 161-173 (1955). The parties agree on material facts but differ on how they must be interpreted to determine the plan and intent of the settlors. Interpreting a trust instrument to find the settlor’s intention is a question of law. Davison v. Duke Univ., 194 S.E.2d 761, 783 (N.C. 1973); Evans v. First Nat’l Bank of Stillwater, 192 P.2d 666, 667 (Okla. 1948). Since there is no genuine issue as to any material fact, summary judgment can be rendered if either party is entitled to a judgment as a matter of law. Trial Court Rule of Civil Procedure 56(a).

Defendants argue as follows. The Beavers executed the trust instrument intending to minimize federal estate taxes by maximizing the estate’s marital deduction, to provide lifetime income for the survivor, and to ensure that the Trust Estate would pass to their children when the survivor died. Defendant’s Memorandum of Points and Authorities, at 2. "Marital Deduction Property" is restricted to "other assets [than the S.P.T. stock] subject to the terms of this trust." Id. at 3 (emphasis added). A probate action (PR No. 29-87) was opened, and all of decedent’s property "poured into" the inter vivos trust per his will. These "other assets" that poured over satisfied the maximum marital deduction, were transferred to the Survivor’s Trust, and were distributed therefrom to Mrs. Beaver, exhausting and terminating the Survivor’s Trust. Id. They argue that the settlors wished to transfer to the survivor only her half of all property acquired during the marriage. Affidavit of W. Scott Barrett, at 5.

Plaintiff, on the other hand, contends as follows. She and Mr. Beaver intended primarily to transfer as much of the trust estate of the decedent as possible to the survivor without paying federal estate tax.

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Bluebook (online)
19 Am. Samoa 2d 14, Counsel Stack Legal Research, https://law.counselstack.com/opinion/beaver-v-craven-amsamoa-1991.