NOT FOR PUBLICATION
STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
08-1179
JILL BARNHILL
VERSUS
LYNN H. WOOD, ET AL.
********** APPEAL FROM THE 15TH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, C-20061179 HONORABLE DURWOOD CONQUE, PRESIDING **********
SYLVIA R. COOKS JUDGE
********** Court composed of Sylvia R. Cooks, J. David Painter, and Shannon J. Gremilion, Judges. REVERSED AND REMANDED
EDWIN DUNAHOE (Bar # 05164) DUNAHOE LAW FIRM 402 Second Street P.O. Box 607 Natchitoches, LA 71457 Tel. (318) 352-1999 Fax. (318) 352-5222 Counsel for Plaintiff-Apellant: Jill Barnhill
GEORGE D. FAGAN (Bar # 14260) PATRICK WARTELLE (Bar # 14484) CATHERINE L. DAVIDSON (Bar # 27792) Leake & Anderson, L.L.P. 1100 Poydras Street New Orleans, LA 70163 Tel. (504) 585-7500 Fax (504) 585-7775 Defendants-Appellees: Lynn H. Wood, et al.
COOKS, Judge. FACTS AND PROCEDURAL HISTORY
Plaintiff’s mother and father established a revocable inter vivos trust entitled
“The Rodgers Living Trust of 1993” which instrument was signed and executed on
September 27, 1993. The instrument was an authentic act, signed by Mr. and Mrs.
Rodgers specifically as “trustees” and “settlors” in the presence of a notary and two
witnesses. Both parties agree that this Trust was a valid Louisiana Trust established
in conformity with the provisions of the Louisiana Trust Code, LA. R.S. 9:1721, et
seq. Included in the provisions of the 1993 Trust were provisions for the
establishment of two trusts in the event of the death of the first Settlor, identified as
the Rodgers Trust “A” and the Rodgers Trust “B.” On the same date the 1993 trust
was established, Plaintiff’s mother executed a Power of Attorney appointing her
husband as her agent with authority to transfer property into the trust. Under the
authority of the Power of Attorney, and in his own right, Mr. Rodgers signed an IRA
Adoption Agreement on November 30, 1999, affecting the couples’ entire interest
in his IRA bearing number 321-739473. Mr. Rodgers listed he and his wife as
Trustees of the Rodgers Living Trust of 1993 as the primary beneficiaries of the
entire IRA account and listed his children, Mrs. Jill Barnhill and Mr. Richard D.
Rodgers, Contingent Beneficiaries.
Plaintiff’s father, Mr. Billy Howard Rodgers, passed away on July 13, 2003.
At the time of Mr. Rodgers’ death, Plaintiff’s mother, Mrs. Frances Smith Rodgers,
was mentally incapacitated due to Alzheimers Disease. Mrs. Rodgers passed away
a few months later on December 4, 2003. Subsequent to Mrs. Rodgers’ death, in
March, 2004, Plaintiff and her brother contacted Defendant Wood concerning the
investment of the assets held in trust. The parties agree that Plaintiff and her brother
wanted the IRA funds to be handled in a tax deferred manner in what is known as a
-2- Beneficiary IRA. Eventually, Plaintiff received notification from Defendant Wood
that the IRA funds had been distributed in such a fashion as to create a taxable event.
Plaintiff claims this distribution caused she and her brother a loss of at least
$141,000.00. Issues concerning the propriety of Woods decision to place the funds
in an Individual IRA rather than in a Beneficiary IRA, and other actions, are not
before this court on this appeal and therefore will not be addressed.
Subsequent to Plaintiff filing her Petition, the trial court issued an Order
granting the parties’ Joint Motion For Stay of the proceedings in recognition of an
arbitration agreement binding on the parties. Defendants filed a Motion For
Declaratory Judgment, and both parties filed a Joint Motion To Partially Lift Stay so
as to allow the trial court to hear the Motion For Declaratory Judgment. Following
a hearing on the Motion, the trial court entered a declaratory judgment finding that
only one trust had been created, namely the Rodgers Living Trust of 1993. The trial
court ruled that Rodgers Trust “A” and Rodgers Trust “B” were not created. Plaintiff
appeals the declaratory judgment.
ANALYSIS
The trial court erred as a matter of law. The instrument signed by Mr. and Mrs.
Rodgers in 1993 established both a valid inter vivos trust and valid testamentary
trusts. The Trust Code defines a trust as: “[t]he relationship resulting from the
transfer of title to property to a person to be administered by him as a fiduciary for the
benefit of another.” La. R.S. 9:1731. The Trust Code further distinguishes
testamentary trusts and inter vivos trusts as follows: “A trust is testamentary when it
is created by donation mortis causa,” La. R.S. 9: 1733, and “All Trusts not
testamentary are considered inter vivos, regardless of the time of creation.” La. R.S.
9: 1734. As to the form of trusts, the Code provides that an inter vivos trust can be
-3- created by authentic act, as was the Rodgers Living Trust of 1993. See La. R.S. 9:
1752. Additionally, the Code provides: “No particular language is required to create
a trust, but it must clearly appear that the creation of a trust is intended. A trust
instrument shall be given an interpretation that will sustain the effectiveness of its
provisions if the trust instrument is susceptible of such an interpretation.” La. R.S.
9:1753. See also St. Charles Land Trust v. St. Amant, 217 So.2d 385, (La.1968).
The Trustee(s) may, as Mr. and Mrs. Rodgers did in the instrument at issue herein,
accept the trust in the trust instrument itself. La. R.S. 9:1755.
There can be no doubt that the instrument signed by the Rodgers in 1993
clearly expressed the intent to create an inter vivos trust, effective immediately, and
two testamentary trusts which would take effect upon the death of the first Settlor
(Mr. or Mrs. Rodgers). The Rodgers placed property in the living trust at its
inception and thereafter placed additional property, the IRA, into the trust. Under the
express provisions of the Louisiana Trust Code, the testamentary trust, properly made
by the authentic act of the Rodgers, was created automatically by operation of law
“at the moment of the settlor’s death, without awaiting the trustee’s acceptance of the
trust.” La. R.S. 9:1821. Thus, contrary to the Defendants’ argument and the trial
court’s ruling, the Trustee (or co-trustees due to the Trustee’s incapacity) did not have
to do anything after Mr. Rodgers’ death for the testamentary trusts to be created. As
noted in Grant v. Grant, 35-635 (2/27/02), 810 So.2d 1226, writ denied, 02-1046 (La.
6/14/02), 817 So.2d 1158:
“The trust instrument is not required to contain specific language of conveyance provided it is clear that title is being transferred to the trustee, because the creation of a trust automatically and by definition effects a transfer of title to the trust property pursuant to LSA - R.S. 9:1731. The trust instrument must identify the property being transferred in trust either specially, as in a description of land, or generally, as under a universal legacy. 11 Leonard Oppenheim & Sidney Ingram, Louisiana Civil Law Treatise, trusts Sect. 102 (1977).” Grant,
-4- Supra. at 1229.
In Grant, the trust instrument identified specific immovable property and
generally identified all other property owned by the Grants. In the case sub judice the
trust instrument identified the trust property as “$100.00 cash and all of Settlors’
personal possessions, wherever located, together with such other property as may be
added by Settlors or by third persons.
Free access — add to your briefcase to read the full text and ask questions with AI
NOT FOR PUBLICATION
STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
08-1179
JILL BARNHILL
VERSUS
LYNN H. WOOD, ET AL.
********** APPEAL FROM THE 15TH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, C-20061179 HONORABLE DURWOOD CONQUE, PRESIDING **********
SYLVIA R. COOKS JUDGE
********** Court composed of Sylvia R. Cooks, J. David Painter, and Shannon J. Gremilion, Judges. REVERSED AND REMANDED
EDWIN DUNAHOE (Bar # 05164) DUNAHOE LAW FIRM 402 Second Street P.O. Box 607 Natchitoches, LA 71457 Tel. (318) 352-1999 Fax. (318) 352-5222 Counsel for Plaintiff-Apellant: Jill Barnhill
GEORGE D. FAGAN (Bar # 14260) PATRICK WARTELLE (Bar # 14484) CATHERINE L. DAVIDSON (Bar # 27792) Leake & Anderson, L.L.P. 1100 Poydras Street New Orleans, LA 70163 Tel. (504) 585-7500 Fax (504) 585-7775 Defendants-Appellees: Lynn H. Wood, et al.
COOKS, Judge. FACTS AND PROCEDURAL HISTORY
Plaintiff’s mother and father established a revocable inter vivos trust entitled
“The Rodgers Living Trust of 1993” which instrument was signed and executed on
September 27, 1993. The instrument was an authentic act, signed by Mr. and Mrs.
Rodgers specifically as “trustees” and “settlors” in the presence of a notary and two
witnesses. Both parties agree that this Trust was a valid Louisiana Trust established
in conformity with the provisions of the Louisiana Trust Code, LA. R.S. 9:1721, et
seq. Included in the provisions of the 1993 Trust were provisions for the
establishment of two trusts in the event of the death of the first Settlor, identified as
the Rodgers Trust “A” and the Rodgers Trust “B.” On the same date the 1993 trust
was established, Plaintiff’s mother executed a Power of Attorney appointing her
husband as her agent with authority to transfer property into the trust. Under the
authority of the Power of Attorney, and in his own right, Mr. Rodgers signed an IRA
Adoption Agreement on November 30, 1999, affecting the couples’ entire interest
in his IRA bearing number 321-739473. Mr. Rodgers listed he and his wife as
Trustees of the Rodgers Living Trust of 1993 as the primary beneficiaries of the
entire IRA account and listed his children, Mrs. Jill Barnhill and Mr. Richard D.
Rodgers, Contingent Beneficiaries.
Plaintiff’s father, Mr. Billy Howard Rodgers, passed away on July 13, 2003.
At the time of Mr. Rodgers’ death, Plaintiff’s mother, Mrs. Frances Smith Rodgers,
was mentally incapacitated due to Alzheimers Disease. Mrs. Rodgers passed away
a few months later on December 4, 2003. Subsequent to Mrs. Rodgers’ death, in
March, 2004, Plaintiff and her brother contacted Defendant Wood concerning the
investment of the assets held in trust. The parties agree that Plaintiff and her brother
wanted the IRA funds to be handled in a tax deferred manner in what is known as a
-2- Beneficiary IRA. Eventually, Plaintiff received notification from Defendant Wood
that the IRA funds had been distributed in such a fashion as to create a taxable event.
Plaintiff claims this distribution caused she and her brother a loss of at least
$141,000.00. Issues concerning the propriety of Woods decision to place the funds
in an Individual IRA rather than in a Beneficiary IRA, and other actions, are not
before this court on this appeal and therefore will not be addressed.
Subsequent to Plaintiff filing her Petition, the trial court issued an Order
granting the parties’ Joint Motion For Stay of the proceedings in recognition of an
arbitration agreement binding on the parties. Defendants filed a Motion For
Declaratory Judgment, and both parties filed a Joint Motion To Partially Lift Stay so
as to allow the trial court to hear the Motion For Declaratory Judgment. Following
a hearing on the Motion, the trial court entered a declaratory judgment finding that
only one trust had been created, namely the Rodgers Living Trust of 1993. The trial
court ruled that Rodgers Trust “A” and Rodgers Trust “B” were not created. Plaintiff
appeals the declaratory judgment.
ANALYSIS
The trial court erred as a matter of law. The instrument signed by Mr. and Mrs.
Rodgers in 1993 established both a valid inter vivos trust and valid testamentary
trusts. The Trust Code defines a trust as: “[t]he relationship resulting from the
transfer of title to property to a person to be administered by him as a fiduciary for the
benefit of another.” La. R.S. 9:1731. The Trust Code further distinguishes
testamentary trusts and inter vivos trusts as follows: “A trust is testamentary when it
is created by donation mortis causa,” La. R.S. 9: 1733, and “All Trusts not
testamentary are considered inter vivos, regardless of the time of creation.” La. R.S.
9: 1734. As to the form of trusts, the Code provides that an inter vivos trust can be
-3- created by authentic act, as was the Rodgers Living Trust of 1993. See La. R.S. 9:
1752. Additionally, the Code provides: “No particular language is required to create
a trust, but it must clearly appear that the creation of a trust is intended. A trust
instrument shall be given an interpretation that will sustain the effectiveness of its
provisions if the trust instrument is susceptible of such an interpretation.” La. R.S.
9:1753. See also St. Charles Land Trust v. St. Amant, 217 So.2d 385, (La.1968).
The Trustee(s) may, as Mr. and Mrs. Rodgers did in the instrument at issue herein,
accept the trust in the trust instrument itself. La. R.S. 9:1755.
There can be no doubt that the instrument signed by the Rodgers in 1993
clearly expressed the intent to create an inter vivos trust, effective immediately, and
two testamentary trusts which would take effect upon the death of the first Settlor
(Mr. or Mrs. Rodgers). The Rodgers placed property in the living trust at its
inception and thereafter placed additional property, the IRA, into the trust. Under the
express provisions of the Louisiana Trust Code, the testamentary trust, properly made
by the authentic act of the Rodgers, was created automatically by operation of law
“at the moment of the settlor’s death, without awaiting the trustee’s acceptance of the
trust.” La. R.S. 9:1821. Thus, contrary to the Defendants’ argument and the trial
court’s ruling, the Trustee (or co-trustees due to the Trustee’s incapacity) did not have
to do anything after Mr. Rodgers’ death for the testamentary trusts to be created. As
noted in Grant v. Grant, 35-635 (2/27/02), 810 So.2d 1226, writ denied, 02-1046 (La.
6/14/02), 817 So.2d 1158:
“The trust instrument is not required to contain specific language of conveyance provided it is clear that title is being transferred to the trustee, because the creation of a trust automatically and by definition effects a transfer of title to the trust property pursuant to LSA - R.S. 9:1731. The trust instrument must identify the property being transferred in trust either specially, as in a description of land, or generally, as under a universal legacy. 11 Leonard Oppenheim & Sidney Ingram, Louisiana Civil Law Treatise, trusts Sect. 102 (1977).” Grant,
-4- Supra. at 1229.
In Grant, the trust instrument identified specific immovable property and
generally identified all other property owned by the Grants. In the case sub judice the
trust instrument identified the trust property as “$100.00 cash and all of Settlors’
personal possessions, wherever located, together with such other property as may be
added by Settlors or by third persons. Settlors hereby convey, to Trustee in trust all
of their rights, title, and interest in that property.” After creation of the 1993 Trust,
Mr. Rodgers later transferred his IRA into the trust by appropriate legal means.
Further, the trust instrument provided that the property comprising the two
testamentary trusts would be the corpus of the 1993 trust. The instrument recites at
Paragraph 3.3 and 3.4 that Rodgers Trust “A” and Rodgers Trust “B” would consist
of the property in the Rodgers Living Trust of 1993, and further accorded the
surviving Settlor, or in his/her incapacity, the co-trustees, the right to select which
property to place in the revocable Trust “A” and which to place in the irrevocable
Trust “B”.
Mrs. Rodgers signed the original trust instrument in 1993 both as Trustee and
Settlor, and as such did not have to do anything in writing to accept the testamentary
trusts after the death of Mr. Rodgers. See La. R.S. 9:1824. The 1993 trust instrument
specifically named Mrs. Barnhill and her brother Mr. Rodgers as alternate co-trustees
in the event of the death or physical/mental disability of the original trustees. No
action was required to create the testamentary trusts. The co-trustees could thereafter
seek financial advice, as they did, to determine how to handle assets subject to
placement at their discretion into Trust “A” or Trust “B”.
-5- DECREE
The judgment of the trial court is reversed and the case is remanded for further
proceedings in accordance herewith, and all costs of this appeal are assessed against
the Defendants.
REVERSED AND REMANDED.
-6-