Timmons v. Ingrahm

36 So.3d 861 (2010)

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Nature of the Case

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Facts

Frank Sr. was married to Myrtle Timmons. He had two adopted children, Ps, from a previous marriage. Myrtle had four children (Ds) none of which was ever adopted by Frank Sr. He created two trusts: The Timmons Family Trust ($650,000) and the Timmons Marital Trust. The more substantial portion of Frank Sr.'s estate was placed in the Marital Trust. Myrtle was the sole income beneficiary of the trusts during her lifetime. She was also empowered, in her sole discretion, to annually remove from each trust, up to $ 5,000 or five percent (5%) of the principal, whichever was greater. The co-trustees were also given authority to encroach on the trusts' principal as necessary for Myrtle's maintenance and support. The Marital Trust provided that upon Myrtle's death, the trust's remaining principal (after payment of estate taxes) would be 'poured over' into the Family Trust and distributed in accordance with the terms of the Family Trust. The Family Trust provided that upon Myrtle's death, the trust assets were to be divided 'into as many equal shares as there are children of mine then living and deceased children of mine leaving issue then surviving.' Frank Sr.'s will expressly defined 'children' to include both his adopted children and Myrtle's children. In 2007, Myrtle made an attempt to disinherit Ps through the purported exercise of a limited power of attorney granted to Myrtle in the Family Trust. The applicable provision reads as follows: My said wife shall have the further limited power at any time during her lifetime to appoint by specific reference to this power in an instrument in writing executed and delivered to the Trustee all or any part of the principal of this trust, free and clear of any trust to and among my then living lineal descendants in such proportions and subject to such trust and conditions as she may direct. This limited power of attorney may be exercised by said wife even to the point of completely exhausting the entire corpus trust of this trust estate. Myrtle executed a document entitled 'Exercise of Limited Power of Appointment' that attempted to grant all of the principal and income of the family trust, then in existence or later coming into the trust, to her four (4) natural children. Ps brought an action against Ds for breach of fiduciary duty and an accounting. Ps asserted that Myrtle's attempt to disinherit them was ineffective because the limited power of appointment could only be executed in favor of Frank Sr.'s 'lineal descendants' and Myrtle's natural children did not fall within this definition. D won the motion for summary judgment, and Ps appealed.