Tait v. Community First Trust Co.

425 S.W.3d 684 (2012)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

William J. Fowler (no offspring) and his wife Annie R. Fowler (six children from a previous marriage) established the Fowler Family Trust. The trust res consisted of the following three classes of property: (1) property that William had owned separately, (2) property that Annie had owned separately, and (3) property that William and Annie had owned jointly. The trust authorized the trustee to dispense to William and Annie the income and principal during their lifetimes as needed for their support. Although initially, the trust was revocable, the trust instrument provided that it would become irrevocable when either William or Annie died. At the death of the survivor, the trust was to terminate, and the principal and income of the trust was to be distributed in the following manner. The jointly owned property and William's separate property was to be apportioned equally among William's two stepchildren, Dale Paschal Jones and Billy Ray Jones, and ten of his nieces and nephews, including Tommy Dean Fry. Annie's separate property was to be disbursed in equal shares to three of her children. Annie died in May 2001. William's stepson, Dale Paschal Jones, died in November 2004, survived by his daughters, Leanna Lackey and Lesia Winters (Ds). William's other stepson, Billy Ray Jones, died in November 2008, survived by his daughters, Debbie Tait and Kerry Jones (Ps). William's niece, Tommy Dean Fry, died in June 2009 without issue. After the deaths of these three named beneficiaries, William died in January 2011. P filed a petition to construe the trust taking the position that the interests of the deceased beneficiaries lapsed because they predeceased William, the surviving settlor and that Ds, the descendants of William's stepsons, were not entitled to share in the remainder of the trust. P relied on the anti-lapse provision of Arkansas Code Annotated section 28-26-104(2) (Repl. 2012). Ds argued that the interests of the deceased beneficiaries did not lapse because their interests vested at the time the trust was created. Applying the 'common law rule,' the court found that Ds could not share in the trust because their fathers' interests lapsed when they predeceased William. Ds appealed.