Weinstein v. Weinstein

326 P.3d 307, 235 Ariz. 40
CourtCourt of Appeals of Arizona
DecidedMay 16, 2014
DocketNo. 2 CA-CV 2013-0117
StatusPublished
Cited by38 cases

This text of 326 P.3d 307 (Weinstein v. Weinstein) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Weinstein v. Weinstein, 326 P.3d 307, 235 Ariz. 40 (Ark. Ct. App. 2014).

Opinion

OPINION

HOWARD, Chief Judge.

¶ 1 Milton Weinstein appeals from the trial court’s grant of summary judgment in favor of Steven Weinstein and Carrie Rosen (the “Weinsteins”), interested persons as trustee and beneficiary respectively, of an inter vivos trust their grandparents established in 1964 (the “Trust”), on the basis that he lacked standing to file a petition for an accounting of the Trust. Milton argues the court erred in finding he lacked standing because the agreement purporting to assign his entire beneficial interest in the Trust was invalid, and, alternatively, he re-inherited an interest in the Trust through his father’s will. Milton also argues the court abused its discretion in [44]*44awarding the Weinsteins their attorney fees. The Weinsteins cross-appeal, arguing the court erred in awarding less than the full amount of fees they had requested. Because we find that Milton lacked standing, and the trial court did not abuse its discretion in determining the attorney fee award, we affirm.

Factual and Procedural Background

¶2 On appeal from a grant of summary judgment, we view the facts in the light most favorable to the opposing party. Wells Fargo Bank, N.A. v. Allen, 231 Ariz. 209, ¶ 14, 292 P.3d 195, 199 (App.2012). In 1964, Harry and Alice Weinstein created an inter vivos trust, and named their three grandchildren, Steven, Carrie, and Milton Weinstein, as the beneficiaries. Bernard Weinstein, father of Steven, Carrie, and Milton, was named trustee. The Trust contained a spendthrift provision prohibiting the voluntary and involuntary transfer of a beneficiary’s interest. Pursuant to several amendments over the years, the Trust was modified to terminate upon Bernard’s death.

¶ 3 In 2000, Milton executed an assignment, purporting to assign his entire interest in the Trust to his siblings, Steven and Carrie, to be held in trust for the benefit of Steven and Carrie’s children. In return for the assignment, the trustee paid Milton $75,000 from the Trust, which was distributed over three years. Bernard passed away in May 2010.

¶4 In September 2012, Milton brought a petition for accounting against the Trust and requested the court freeze all Trust assets and grant him a surcharge. The Weinsteins objected to the petition and then filed a motion for summary judgment. The Wein-steins argued that Milton had no standing to file the petition for accounting because he was no longer a beneficiary of the Trust following the assignment in 2000, and that laches and the statute of limitations barred any claims attempting to invalidate the assignment. The trial court granted the Wein-steins’ motion, finding that the assignment was valid, that Milton did not re-inherit an interest in the Trust through Bernard’s will, and that even if the assignment was invalid, laches and the statute of limitations prohibited Milton’s claims. The court also awarded the Weinsteins a portion of their attorney fees pursuant to AR.S. § 14-11004(B). We have jurisdiction over Milton’s appeal and the Weinsteins’ cross-appeal pursuant to AR.S. §§ 12-120.21(A)(1) and 12-2101(A)(9).

Summary Judgment

¶ 5 Milton argues the trial court erred in concluding that he had assigned any interest he had in the Trust in 2000 and therefore lacked standing to bring a petition for accounting against the Trust. Whether a party has standing is an issue of law we review de novo. In re Estate of Stewart, 230 Ariz. 480, ¶ 8, 286 P.3d 1089, 1092 (App.2012). The Arizona Trust Code specifies that a court may intervene in the administration of a trust only when an action is brought by an “interested person.” AR.S. § 14-10201(A). An “interested person” in Title 14 proceedings is defined, as relevant here, as any “beneficiary ... [or] other person who has a property right in or claim against a trust estate.” AR.S. § 14-1201(28).

¶ 6 Milton first argues the assignment of his interest was invalid, thus maintaining his status as a beneficiary of the Trust, because the Trust’s spendthrift provision prohibited the assignment. To determine whether Milton has standing to petition for an accounting, we therefore must first examine the language of the Trust and determine whether Milton effectively assigned any interest he had in the Trust, or whether he remained a beneficiary despite the purported assignment.

¶ 7 We review the interpretation of a written instrument de novo. See Squaw Peak Cmty. Covenant Church of Phx. v. Anozira Dev., Inc., 149 Ariz. 409, 412, 719 P.2d 295, 298 (App.1986). When interpreting a trust, the overriding goal is to ascertain the intent of the trustor. In re Estate of Zilles, 219 Ariz. 527, ¶ 8, 200 P.3d 1024, 1027 (App. 2008). That intent “ ‘is to be ascertained from the contents within the four corners of the instrument, including the general plan or scheme thereof, and when necessary or appropriate, the circumstances under which the [45]*45[instrument] was made.’ ” Id., quoting In re Estate of Gardiner, 5 Ariz.App. 239, 240-41, 425 P.2d 427, 428-29 (1967) (second alteration in Estate ofZilles).

¶ 8 In Arizona, a spendthrift provision in a trust “is valid only if it restrains either voluntary or involuntary transfer of a beneficiary’s interest.”1 A.R.S. § 14-10502(A). No specific language is necessary to create a spendthrift trust, so long as its terms manifest an intention to create such a trust. § 14-10502(B); Restatement (Second) of Trusts § 152 cmt. c (1959) (hereinafter “Restatement”).2 “ ‘The purpose of a spendthrift trust is to protect the beneficiary from himself and his creditors.’ ’’ Birdsell v. Coumbe (In re Coumbe), 304 B.R. 378, 382 (B.A.P. 9th Cir.2003), quoting Richardson v. McCullough (In re McCullough), 259 B.R. 509, 517 (Bankr.D.R.1.2001); see also George G. Bogert & George T. Bogert, The Law of Trusts and Trustees § 222 (rev.2d ed.1980) (spendthrift provisions protect against creditors and “incompetence, imprudence, or misfortune” of beneficiaries). And although a trustee may choose to honor an assignment made in violation of a spendthrift clause, the beneficiary retains the ability to cease all future payments that would be made pursuant to that assignment because “[a] valid spendthrift provision makes it impossible for a beneficiary to make a legally binding transfer.” Unif. Trust Code § 502 cmt. (2000);3 Restatement § 152 cmt. i.

¶ 9 Here, section 2(i) of the Trust restricts the beneficiaries’ ability to assign their interest and is the portion Milton contends is a spendthrift provision that prohibited the assignment of his beneficial interest. A portion of section 2 provides that a beneficiary’s interest “shall [not] ... be liable for the obligations or debts of said beneficiary ... and shall not be ... taken on execution, breached by creditor’s bill, garnishment, or other process or writ by any person having ... a claim against said beneficiary.” This clause clearly prohibits the involuntary transfer of a beneficiary’s interest to satisfy the beneficiary’s creditors.

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Bluebook (online)
326 P.3d 307, 235 Ariz. 40, Counsel Stack Legal Research, https://law.counselstack.com/opinion/weinstein-v-weinstein-arizctapp-2014.