In Re McDonald Revocable Trust

942 S.W.2d 926
CourtMissouri Court of Appeals
DecidedJanuary 8, 1997
Docket20971
StatusPublished
Cited by27 cases

This text of 942 S.W.2d 926 (In Re McDonald Revocable Trust) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re McDonald Revocable Trust, 942 S.W.2d 926 (Mo. Ct. App. 1997).

Opinion

942 S.W.2d 926 (1997)

In re the CARL McDONALD REVOCABLE TRUST DATED OCTOBER 1, 1979.
HOME OF HOPE, INC., Appellant,
v.
Betty L. McDONALD and C.R. Rhoades, Successor Trustee, Respondents.

No. 20971.

Missouri Court of Appeals, Southern District, Division Two.

January 8, 1997.
Motion for Rehearing or Transfer Denied January 30, 1997.

*928 John S. Dolence, Spencer, Scott & Dwyer, P.C., Joplin, Mark W. Curnutte, Logan & Lowry, Vinita, OK, for appellant.

Ron Mitchell, Joplin, Blanchard, Robertson, Mitchell & Carter, P.C., for respondent, Betty L. McDonald.

SHRUM, Chief Judge.

Appellant, Home of Hope, Inc., (Home of Hope) is a contingent beneficiary under a revocable trust executed by Carl McDonald (Carl) in 1979. Respondent Betty McDonald (Betty) is Carl's widow and is a beneficiary of the trust which was amended by him three times. An attempted fourth amendment was earlier declared invalid.[1] The instant appeal involves a declaratory judgment action filed by C.R. Rhoades, the successor trustee (successor trustee) seeking an interpretation and declaration of the meaning of the third amendment.[2] Home of Hope, in an amended answer, sought declaratory relief and recovery of its attorney fees. Likewise, Betty requested declaratory relief via her pleadings.

In a revised judgment dated in July 1994, the trial court decided the issues raised in the successor trustee's declaratory judgment action favorably to Betty. By a separate judgment, the trial court also denied Home of Hope's request for attorney fees.[3] This appeal followed.[4] We affirm.

According to McDonald-I, the provisions that Carl made for Betty in his original trust included the following:

*929 "(1) ... [T]he use for her lifetime of a residential property owned by Carl prior to his marriage to Betty and located at 3510 South Joplin, Joplin, Missouri; the trust was to pay all taxes, insurance and reasonable costs of maintenance for the property;
....
"(4) she was to receive $1,000.00 per month for her lifetime and $2,000.00 per year reimbursement for travel and vacation expenses...."

814 S.W.2d at 943.

Carl's first amendment to the trust indenture gave the trustee additional personal property and "allowed the Trustee to increase the monthly income to Betty ($1,000 per month) within his discretion to take into consideration the `present inflationary rate.'" Id.

Carl's second amendment, dated November 26, 1983, "[r]evoked" the previous Article FIRST C 1 and adopted "a new Article FIRST C 1. ... in lieu thereof." By subparagraph 1.b of this amendment, Betty was given a life estate in additional real estate, commonly known as the "Mickey Mantle Holiday Inn" parcel, henceforth called "Motel Property." Additionally, Betty was authorized to lease the subject real estate but was also required to pay its taxes, insurance, and reasonable costs of maintenance. Continuing, the second amendment revoked the original Article First C 4, and made another provision in lieu thereof. In this part of the second amendment, Carl stated that if net income from the Motel Property did not provide Betty with $1,000 per month, the Trustee was to make up the difference, "it being [Carl's] intent ... that ... Betty ... receive at least ... $1,000.00 per month [for her lifetime] from the [Motel Property] and the Trust created herein[.]" Additionally, Carl gave the successor trustee discretionary power to increase Betty's monthly allowance if "our present inflationary rate continues and... $1000.00 per month does not prove sufficient to provide for the reasonable care and maintenance of Betty...." The amendment left Betty's $2,000 annual vacation allowance unchanged.

Less than a month later, on December 23, 1983, Carl amended his trust a third time. In pertinent part, the third amendment read:

"[T]he Revocable Trust Agreement dated September 16, 1979, as heretofore amended, is hereby amended and modified in the following manner and respect, to wit:
"1.b. `The Successor trustee shall distribute to my wife, Betty ..., the following described real estate:
[legal for residential property & adjoining lots]
for her life, the remainder to Successor Trustee....
....
"Except as herein amended, the parties hereto ratify and confirm all the other provision of the Revocable Trust Agreement dated September 16, 1979, and the Amendment ... dated April 15[,] 1980, and the Amendment ... dated November 26, 1983...."

Carl died June 18, 1988. McDonald-III at 273. Although the status of the Motel Property at that time is not entirely clear, the record suggests that by the early 1990's, it was producing but little gross income and no net income. In part, this was due to the fact that the buildings were in "a dilapidated or run-down condition" and also because of competition from newer motels. Whatever the Motel Property income was, it went to the trust after Carl's death and not to Betty. On the other hand, Betty had not paid the taxes, insurance, or maintenance costs for the Motel Property as directed in the trust.

In 1990, the successor trustee was attempting to sell part of the Motel Property to "Braums." In order to proceed, the successor trustee needed a quitclaim deed from Betty. They negotiated an agreement wherein Betty agreed to convey her interest in the Braums portion of the Motel Property for $50,000, but retained her "right to receive full monthly income from July 1, 1990 forward." *930 The sale to Braums was closed and Betty received the $50,000.

In 1993, the successor trustee sold the balance of the Motel Property to Lowes. On this occasion, the successor trustee's lawyer signed an agreement with Betty concerning this prospective sale. The pertinent parts of that agreement follow:

"... Betty ... will sign the Quit-Claim Deeds conveying the `Holiday Inn' and `Skateland' property in exchange for $100,000.00 for her interest ... in the event the Court of Appeals restores her rights under the ... Trust.... It is further understood... that this payment will be solely for Betty's life estate interest and will not affect her right to receive any other benefit under the trust, including her right to receive monthly support."
"[We also agree] ... that ... [if] the Court of Appeals sustains the trial court's decision to forfeit Betty's rights and benefits under ... the trust, that the trustee will not independently pursue any action to recover the $50,000.00 paid for Betty's interest for her life estate in the `Braum's' tract. [We agree] that such payment was a compromise and settlement of disputed claims as of that time and not contingent upon her succeeding claims under the trust."
"However, both parties agree that this understanding is not binding, upon any beneficiary, including the Home of Hope and actions they may pursue, if any."[5]

We glean from the record that the sales to Braums and Lowes generated approximately $840,000, this being a figure before some expenses and payments to Betty.

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Bluebook (online)
942 S.W.2d 926, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-mcdonald-revocable-trust-moctapp-1997.