In Re Carlson Trust

152 N.W.2d 434, 82 S.D. 631, 1967 S.D. LEXIS 83

• Court: South Dakota Supreme Court
• Decided: July 27, 1967
• Docket: File 10397
• Status: Published

Opinions

HOMEYER, Presiding Judge.

This is an appeal taken and prosecuted by Deming Smith as guardian ad litem for Christie Ann Carlson and Linda Lou Carlson, minors.¹ The appeal is from an order which directed the Northwest Security National Bank of Sioux Falls, as trustee, in the matter of the Emma Lou Carlson Trust, to pay to Henry Carlson, Jr., the father and general guardian of said minors, the sum of $225 per month for their care, support and maintenance.

There is no dispute in the facts; however, we believe a recital will place the controversy in better perspective. Henry Carlson, Jr. and Emma Lou Carlson were divorced sometime before June 30, 1956.² On that date a trust agreement was entered into between Emma Lou Carlson and the bank in which it acknowledged receipt of the sum of $38,000 to be used for the benefit of Mrs. Carlson and the two daughters. The trust fund represented the proceeds from the sale of the dwelling house of the Carlsons and was established as a part of their separation agreement. The trust agreement contained customary provisions on investment and the trustee was directed to pay to Mrs. Carlson the sum of $275 per month commencing January 31, 1957, and such further sums as in the judgment and discretion of the trustee shall be necessary for the care, support and maintenance of Mrs. Carlson and the two daughters, and the education of the latter. Payment of additional sums was authorized in the event of illness or other misfortune. The specified monthly payment could be increased or decreased in case of monetary inflation or deflation during the life of the trust.

The agreement also contained the following provisions:

(1) In case of Mrs. Carlson's remarriage payments and allowances for her support were to cease, but the trustee shall pay her "in behalf of her said daughters such reasonable sums as shall be needed for their care, support, maintenance and education." (2) If any beneficiary is deceased the trust "shall nevertheless continue for the benefit of the survivors and it shall continue until the fund be exhausted or until the remarriage of First Party or until the younger or the survivor of the minor beneficiaries shall be 21 years old, whichever shall be the later date." (3) If all beneficiaries of the trust are deceased, the residue is to be paid to Henry Carlson Jr. (4) If Mrs. Carlson remarried, the trust is to continue until the youngest child becomes twenty-one when the residue is to be divided equally between the children, or if one is deceased, the whole residue goes to the survivor. (5) No court supervision of the trust was required, "but it may be invoked, terminated, or reinvoked, when and as deemed necessary." (6) The trust agreement was irrevocable.

On March 9, 1961, the trustee petitioned for court supervision of the trust; it appears Mrs. Carlson had remarried; the $275 monthly payment to her had been discontinued; the trustee had been paying her $150 per month for the support of the daughters.³ On March 28, 1961, upon notice the court entered its order assuming jurisdiction and supervision of the trust. On May 25, 1961, Mrs. Carlson petitioned the court for an increase in support allowance seeking $125 per month for each child.⁴ A hearing was held on the petition and the amount sought was resisted by Henry Carlson, Jr.⁵ On September 1, 1961, judgment was entered allowing Emma Lou Carlson Wilcox the sum of $225 per month for the support of the daughters and additionally the trustee was directed to pay all medical, dental and hospital expenses incurred by Mrs. Wilcox for said daughters.

Mrs. Emma Lou Carlson Wilcox died on April 4, 1966. Shortly thereafter the trustee filed an annual accounting which was approved and the order further recited that the trustee "shall hold all payments in trust until such time as a legal guardian is appointed for the minor daughters of Emma Lou and Henry Carlson."

By habeas corpus in the district court of Lincoln County, Nebraska, Henry Carlson, Jr. obtained custody of his two daughters from their maternal grandparents and they now live with him near Brandon, South Dakota.⁶ Thereafter, Henry Carlson, Jr., was appointed guardian of the persons and estates of his daughters and petitioned the court for a support allowance from the trust estate which was granted in the amount of $225 per month. The allowance was resisted by the maternal grandparents. The court found:

"The trust fund involved in the above matter was established with moneys that represented the proceeds of the dwelling house of the petitioner and the said Emma Lou Carlson at the time they were divorced. Said moneys were all provided by the petitioner and the trust fund was established as a part of the separation agreement between the parties and was one of the conditions of the divorce between the petitioner and the ■said Emma Lou Carlson. The trust fund was established and exists since the death of the said Emma Lou Carlson for the care, support, maintenance and education of the two daughters of the marriage, namely, Christie Ann Carlson and Linda Lou Carlson."

"That Henry Carlson, Jr. is financially capable of supporting these children."

and concluded:

"The Trust Agreement involved in this matter provides specifically for the care, support, maintenance and education of the minor beneficiaries of the trust. The Trust Fund is set up for this specific purpose. The petitioner's application for an allowance from the Trust Fund is also for this specific purpose."

Appellant contends that neither the trust agreement nor the applicable law authorize payment of the income or the principal of this trust to the father for the care, support and maintenance of his daughters. He relies upon In re Guardianship of Severtson v. Severtson, 70 S.D. 85, 14 N.W.2d 886, to support his position. In that case, this court quoted from 39 C.J.S. Guardian and Ward § 62, p. 101, as follows:

"A father, being under the legal duty to support his children, even though they have independent means, * * * cannot, as their guardian, be allowed anything out of their estate for their support, unless he is financially unable to support them, in which event the allowance should not be of the entire cost of support but only of such amount as was necessary to be used in view of the father's inability * *

Also in this state the statute declares it the duty of the father, and if his means and capacity are inadequate, the duty of the mother, to support and educate their children. SDC 14.0310.

We believe it is well settled in this jurisdiction, as well as elsewhere, that a father is bound to support his minor children, if he is able to do so, even though they have property of their own. In re Guardianship of Severtson v. Severtson, supra; see however, SDC 1960 Supp. 35.1812. The exception to this rule occurs when by a trust, will or agreement, a fund has been set up for the express purpose of support, maintenance and education of the minor children. In such case, the prevailing rule appears to be that the income and property of the minors shall be applied for that purpose without regard to the ability of the parents to support said minors. Cleveland Clinic Foundation v. Humphrys, 6 Cir., 97 F.2d 849, 121 A.L.R. 163; Slaughter v. Slaughter, Mo.App., 313 S.W.2d 193. See also Annot. 121 A.L.R. 176, 198, 200.

The record in this case clearly reveals that the trust fund involved was created from property of the father or parents⁷ of Christie Ann Carlson and Linda Lou Carlson for the specific purpose of maintaining and educating them with various contingencies existent. The parties so recognized it and no other claims for support of the children were made against the father. In fact he zealously watched its disbursement subsequent to his ex-wife's remarriage fearful that it might be injudiciously exhausted with duty to support from other sources reverting upon him. This is not a case of minor children having an estate of their own acquired through gift or inheritance being used to discharge a father's duty to support. The fact that the children when the youngest attained her 21st birthday might share in what remained does not change the character of the trust fund. The trust instrument specifically provides "Should any beneficiary of this trust be deceased it shall nevertheless continue for the benefit of the survivors * * No one could contend under this language had Emma Lou Carlson died without remarrying that the fund did not exist for the maintenance and education of the children. Equally without foundation is a construction which would bar its use for that purpose when death occurs after remarriage.

To hold that the father cannot resort to the trust fund to support and educate his children would require us to say that he must twice provide for them. This we cannot do.

Affirmed.

ROBERTS and RENTTO, JJ„ concur. HANSON, J„ concurs in result. BIEGELMEIER, J., dissents.

1 . The notice of appeal also lists H. R. Wivell, grandparent of Christie Ann Carlson and Linda Lou Carlson, minor beneficiaries of the trust, as an appellant.

2 . The record in the divorce proceeding is not before us.

3 . The petition recites as the reason for court supervision some disagreement of the amounts to be paid for the maintenance of the daughters.

4 . A letter from Mrs. Carlson Wilcox to her attorney dated December 15, 1960, attached to the petition, details her needs. In it she states: “I was awarded the money used to establish Trust Fund #1. I never received any alimony or child support otherwise.”

5 . Henry Carlson, Jr. filed an affidavit to which a projection of balance in fund, income, and expenditures is attached. In his affidavit he states: “* * * a projection of the length of time the money would last if taken out at the rate of $250.00' per month and that the fund would be exhausted by the time the girls are about 18 or 19 years old. In other words it would provide nothing for college education; * * The oldest daughter will be of college age in 1968; the other daughter is IV2 years younger.

6 . The maternal grandparents have appealed the custody award to the Supreme Court of Nebraska. At time of oral argument no decision had been handed down. Super-sedeas pending appeal was denied.

7 . The record does not disclose how title to the dwelling house was held at time of sale. Concededly, it may have been the homestead which both parties voluntarily abandoned upon sale. In any event, the trust fund was set up from the proceeds to discharge the husband and father’s obligation to support his wife and children. SDC 14.0726. See note 4.