Reznik v. McKee, Trustee

534 P.2d 243, 216 Kan. 659, 1975 Kan. LEXIS 377
CourtSupreme Court of Kansas
DecidedApril 5, 1975
Docket47,578
StatusPublished
Cited by40 cases

This text of 534 P.2d 243 (Reznik v. McKee, Trustee) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reznik v. McKee, Trustee, 534 P.2d 243, 216 Kan. 659, 1975 Kan. LEXIS 377 (kan 1975).

Opinion

The opinion of the court was delivered by

Schroeder, J.:

This is an appeal from a judgment of 'the district court of Sedgwick County, Kansas, finding that inter vivos reciprocal trusts created by H. W. Cardwell and Katherine Cardwell were contractual in nature, and enforcing the provisions of the trust created by H. W. Cardwell for the benefit of the plaintiffs (appellees herein) against his estate, which is -being administered by the defendant trustees (appellants herein) in accordance with the provisions of the H. W. Cardwell Revocable Trust as amended. The trial court found H. W. Cardwell had breached an agreement with his wife by failing to leave certain property for the plaintiffs (who are two of his grandchildren) in trust upon his death. The trial court ordered reinstatement of the written trust provisions creating such benefits, which had been revoked by H. W. Cardwell prior to his death.

The underlying question is whether the provisions made for the benefits of the plaintiffs in the H. W. Cardwell Revocable Trust as amended January 17, 1962, later cancelled by an amendment to that trust dated May 31, 1965, after the death of Katherine Cardwell, *662 were made pursuant to an agreement or contract, which can be enforced as a claim against the estate of H. W. Cardwell, deceased.

The evidence presented to the trial court consisted of the trust documents and various amendments thereto, the charter of Charitable Foundation, Inc., the pleadings, interrogatories and answers filed by both parties. A summary of the pertinent provisions contained in the seven trust documents involved in this litigation is essential.

In August of 1960 H. W. Cardwell, and his wife, Katherine S. Cardwell, resided in Wichita, Kansas. They had two children, H. W., Jr., and Jean Anne, who were married adults and each had two children, so that Mr. and Mrs. Cardwell had an immediate family of two children and four grandchildren. The Cardwells were wealthy people possessing a combined estate in excess of $4,000,000 at that time.

On August 12, 1960, Mr. and Mrs. Cardwell executed separate instruments denominated the “Katherine S. Cardwell Revocable Trust” and the “H. W. Cardwell Revocable Trust.” Their entire combined estate was settled in these two trusts. The preamble in Mr. Cardwell’s trust recites that he is “joined herein by my wife, Katherine S. Cardwell” and that he is delivering all of his property, both real and personal, to himself and to Mable H. McKee (one of the appellants herein) as co-trustees. In the same manner, the preamble in Mrs. Cardwell’s trust recites that she is “joined herein by my husband, H. W. Cardwell” and that she is delivering all of her property, both real and personal, to H. W. Cardwell as trustee.

Each settlor was joined in the execution of his or her trust by the other spouse who expressly consented to the terms and provisions of the instrument and waived all rights as the settlor’s spouse in and to the trust property under law.

Each trust directs the trustees to distribute all income from the trust property to the settlor during his or her lifetime “at such intervals and in such amounts as the settlor may from time to time direct.” The same provision also authorizes the settlor “to withdraw from time to time, and at any time, any part of the Trust Estate.” Each settlor reserved the right to alter, amend or revoke in whole or in part, his or her trust by delivering a written instrument to the trustees then serving.

Article II of each trust makes provision for the disposition of specific personal property upon the death of the settlor. Certain personal property (jewelry and clothing) is to be distributed out *663 right upon the settlor’s death and other specified personal property (automobiles, household property and stock) is to be held or used by the surviving spouse for life with the remainder over to other named beneficiaries.

In the last paragraph in Article II, paragraph 2.7, of each instrument the settlor explains the omission of certain heirs. Mr. Card-well’s trust recites:

“Settlor makes no provisions for distributions for the primary benefit of Settlor’s children for the reason that he has previously made provisions for them by gifts of stock and otherwise, and also for the reason that Settlor’s wife has made ample provision for such children.” (Emphasis added.)

Mrs. Cardwell’s trust recites:

“Settlor make no provision for the distributions for the primary benefit of Settlor’s grandchildren for the reason that Settlor’s husband has made ample provision for such grandchildren.” (Emphasis added.)

The property disposed of by specific legacy under Article II of each trust was relatively insignificant. The great bulk of each estate consisted of shares of stock in the Cardwell Investment Company. Article III of each trust provides for the disposition of this stock and all remaining property held by the respective settlors at death.

Article III of Mrs. Cardwell’s trust places her entire residuary estate in trust for the benefit of their son and daughter, each of whom is given a power of appointment over the estate remaining at his or her death. If the son and daughter predecease the settlor then the residuary estate is given to their issue.

Article III of Mr. Cardwell’s trust consists of a single paragraph which divides the estate remaining after the dispositions made in Article II into two parts of equal value, one of which is to be “held in trust, managed, invested and distributed for the benefit of the issue of Settlor’s son” and the other of which is to be likewise held and managed in trust “for the benefit of the issue of Settlor’s daughter.”

Article V of the H. W. Cardwell Revocable Trust directs that, after the settlor’s death, cash payments be made to his wife (for “medical and hospital expenses and maintenance” during her lifetime), his sister ($3,000 per year for life) and five other individuals (a maximum of $140,000 is to be paid over a period of ten years). These payments are to be made in equal shares from the income of the trusts created for the benefit of his grandchildren. No similar provision appears in Mrs. Cardwell’s trust.

*664 The remaining provisions in both trusts deal with the powers, duties, obligation, authority, accounting and succession of the trustees. These provisions are substantially identical. Each trust provides for alternative dispositions in the event any of the beneficiaries (including each spouse, the children and the grandchildren) do not survive the settlor and for final disposition of the trust property upon the death of the beneficiaries who do survive the settlor.

On the same day that the Cardwells’ Revocable Trusts were executed (August 12, 1960), a third instrument denominated “H. W. Cardwell Irrevocable Trusts” was executed by both parties. The preamble recites that H. W. Cardwell is “joined herein by my wife, Katherine S. Cardwell” in the delivery and transfer of $500,000 to the trustees to be held in separate and equal trusts for the benefit of their four grandchildren, of whom the plaintiffs in this suit are two. Mrs.

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Cite This Page — Counsel Stack

Bluebook (online)
534 P.2d 243, 216 Kan. 659, 1975 Kan. LEXIS 377, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reznik-v-mckee-trustee-kan-1975.