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Rouner v. Wise

Supreme Court of Missouri, En Banc

October 14, 2014

Rouner
v.
Wise

Page 243

APPEAL FROM THE CIRCUIT COURT OF ADAIR COUNTY. The Honorable Karl DeMarce, Judge.

The stepchildren were represented by Antony L. Dewitt, Edward D. Robertson Jr. and Mary D. Winter of Bartimus, Frickleton, Robertson & Gorny PC in Jefferson City.

Mark L. Williams and John Jay Benson of The Benson Law Firm in Kriksville.

The children were represented by Robert J. Selsor and Jeffrey M. Glogower of Polsinelli PC in St. Louis; David L. Knight of Knight & Salladay Law Offices in Columbia.

Paul C. Wilson. All concur.

OPINION

Paul C. Wilson, J.

Page 244

Cari Renee Wise and Carli Nicole Conklin (the " Children" ) became trustees of their father's inter vivos trust (i.e., the K.R. Conklin Living Trust (" Trust" )) when Dr. Conklin died in 2009. They are being sued in their individual capacities and as trustees of the Trust by the children of Dr. Conklin's second wife, C. David Rouner and Alisha Hudson (the " Stepchildren" ).

The Stepchildren seek relief in three counts. First, they seek a declaration that they are beneficiaries of the Trust. Second,

Page 245

they seek an order requiring the Children to distribute certain Trust assets to them. Third, they seek a declaration that the Children are no longer beneficiaries of the Trust because they violated its " no contest" provision. Following a bench trial, the circuit court entered judgment for the Children on all counts. This Court has jurisdiction of the Stepchildren's appeal. Mo. Const. art. V, § 10. The judgment is affirmed.

I. Background

The following facts were largely uncontested at trial and were found, explicitly or implicitly, by the trial court.

A. Dr. Conklin's Second Wife and Stepchildren

Dr. Conklin's marriage to his first wife (i.e., the Children's mother) ended in divorce prior to the events in this lawsuit. In 1990, Dr. Conklin began living with Diana Jo Conklin, who would become his second wife (" Mrs. Conklin" ), along with one Stepchild (David) and the Children. At that time, the Children were approximately 15 and 16 years of age and the Stepchildren were approximately five and ten years old. The other Stepchild (Alisha) lived part of the time with them and part with her father. All four children eventually left the couple's home to establish their own homes. Dr. Conklin and Mrs. Conklin were married in 2000 and remained married until Dr. Conklin's death in 2009.

B. The Trust and Pour-Over Will

On October 24, 1996, Dr. Conklin executed (in the following order): (1) an agreement between himself as " Trustor" and himself as " Trustee" creating the Trust (the " 1996 Agreement" ) and (2) a will giving his net probate estate to the Trust (the " Pour-Over Will" ). The will emphasizes that the Trust is an existing inter vivos trust and is not to be construed as a testamentary trust. See § 456.021.[1]

The 1996 Trust Agreement named Dr. Conklin as the sole trustee and designated the Children to serve as co-trustees upon his death. It provides that Dr. Conklin would receive all interest -- and such principal as he may direct -- from the Trust property during his lifetime and that he could make additional contributions (or withdrawals) of property to the Trust by " written direction delivered to my Trustee." Finally, Dr. Conklin expressly reserved the right in the 1996 Agreement to " amend, modify, alter, revoke or terminate my trust ... at any time in whole or in part."

The terms of the Trust are simple and straightforward. The beneficiaries are a class consisting of all Dr. Conklin's natural and/or adopted children at the time of his death. The 1996 Agreement and the Pour-Over Will recite that the only members of this class are the Children, but the beneficiary class remained open in the event additional children were born to or adopted by Dr. Conklin before his death.

Upon Dr. Conklin's death, the Trust property was to be divided into shares equaling the number of beneficiaries (including those who pre-deceased him). Shares belonging to pre-deceased children were to be distributed immediately, free of the Trust, to (or, if a minor, for the benefit of) the living descendants of those beneficiaries. Those beneficiaries who survived Dr. Conklin, on the other hand, were not to receive their shares outright. Instead, they would receive only the interest from their share plus whatever principal distributions the trustees in their discretion deemed necessary for that beneficiary's " health, maintenance, support and education."

Page 246

When each beneficiary died, that child's share was to be distributed, free of the Trust, to (or, if a minor, for the benefit of) that beneficiary's living descendants.

In the 1996 Agreement, Dr. Conklin purported to " assign, convey, transfer and deliver" to the trustee all of the real and personal property that he owned at that time. The agreement makes no effort to identify any of this property specifically, however, and there was no evidence at trial establishing what property was transferred to the Trust, either upon its creation or at any time thereafter (including by operation of the Pour-Over Will).[2]

Even though Dr. Conklin began living with the future Mrs. Conklin and the Stepchildren in 1990, neither the 1996 Agreement nor the Pour-Over Will makes any mention of them. The Stepchildren, of course, would have been entitled to distributions of interest (and perhaps principal) from the Trust under the terms of the 1996 Agreement if Dr. Conklin had adopted them, and their living descendants would have been entitled to receive (free of the Trust) each Stepchild's share upon that Stepchild's death. But Dr. Conklin did not adopt the Stepchildren, either before he married their mother in 2000 or at any time prior to his death in 2009. Accordingly, the Stepchildren concede they are not beneficiaries of the Trust under the terms of the 1996 Agreement.

C. The 2002 Letter

On November 1, 2002, Dr. and Mrs. Conklin left their rural Missouri home for the Kansas City airport. From there, they planned to fly to Arizona to help Dr. Conklin's mother close her home there. Afterward, they planned to drive one of the mother's cars back to Iowa, drop it off, and return to their home in Missouri. On the way to the airport, Dr. Conklin wrote -- and both he and Mrs. Conklin signed -- the following:[3]

NOV 1, 2002
Cari, Carla, David & Alisha,
Am writing this in the car on the way to KC, MO so excuse the penmanship.
If you are reading this it means that Jo & I have met our demise either going to or coming back from Phoenix.
The trust has not been updated for several years so I will express my desire on how I wish everything to be handled.

Page 247

My life insurance (250,000) is to be used to pay off the loan against the apartments (120,000). The balance of it (after taxes) to be used to pay off the mortgage [sic] (at NEMO bank) against the house.
Cash flow from the apartments will meet the payments on the Zimmerman farm (16,000/yr on Mar 1, 2003, 2004 & 2005) to Bob Zimmerman and will make the portion of the Glidwell farm payment to Donald Glidwell on Dec 31, 2002, 2003, 2004 & 2005 that the farm doesn't generate. Farm generates around 10,000 clear/yr - payment is 33,000/yr.
After the farms are paid for, I want David and Alisha to have the apt at 710 S. First Street and Cari and Carli to have the apt at 708 S. First St.
The farm north of Novinger by Lee Kittles will go to Cari and Carli.
The Zimmerman farm will go to Cari, Carli, David & Alisha, 1/4 undivided interest to each. If one of the four or two of the four wants to purchase the farm, I would want them to have it at a fair market appraised value to be fair to those selling their interest. If all decide to sell, I would think keeping it for several years & then maybe splitting it In to smaller parcels would be the best alternative for maximum selling price. The rental income will more than pay the taxes and general expenses so there would be no need to sell it.
I don't want the Glidwell farm sold. I wish all four of you (Cari, Carli, David, Alisha) to have an undivided 1/4 interest. Later in your lives you can all decide whether to pass it to your families or to sell.
We wish to have the proceeds of Jo's life insurance (100,000) given ...

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