Probate & Trust Law Section Conference Manual ... - Minnesota CLE

documentation was discovered that indicated that there was an intent to
fund the May trust; however, none of the formal procedures were
observed. The October trust, however, was formally funded. The ultimate
disposition of the trust for the grandchildren involved a calculation that
took into consideration the stock that each grandchild should receive from
his or her respective parent, which was not included in the May trust. One
family line, therefore, would receive less from the October trust because
they were expected to receive more than their cousins from their mother;
however, the mother had had much of her stock redeemed and her children
ultimately would have less stock than their cousins. To reduce the
perceived unfairness, the mother adopted her ex-husband and the father of
her children, who would then presumably gift his shares to their children.
However, after being adopted, the ex-husband had a change of heart and
decided to keep the distributions for himself.
The Court found that extrinsic evidence could be considered when
determining whether there was intent to create the trust. The Court found
that the May trust was not properly created because the settlors did not
disclose the existence of the trust to anyone and they did not follow the
procedures for funding the trust. Additionally, Schedule A of the trust was
not initialed. The Court further upheld the formula found in the October
trust as a clear expression of the settlors’ intent. Finally, the Court found
that adult adoptees with whom the settlors’ children did not have a parentchild
relationship were not intended to be treated as grandchildren for
purposes of becoming a beneficiary of the trust. The adoption was an
attempt to thwart the purpose of the trust and the ex-husband is not
recognized as a grandchild.
10. Dixon v. Weitekamp-Diller, 979 N.E.2d (Ill. App. Ct. 2012). Adopted
adults were not treated as descendants for purposes of determining
interest in trust. At age 87, trust beneficiary married for the first time.
When beneficiary attained the age of 94, he adopted the three adult
daughters of his wife, who were in their 50’s. Upon beneficiary’s death,
adopted children argued that they were beneficiaries of the trusts. The law
provides that adopted children are to be treated as being born to the
adoptive parent. The Court held that to permit the beneficiary to
circumvent the desires of the settlors by adopting three adults would
thwart the intent of those grantors and the adopted adults were not treated
as beneficiary’s descendants for purposes of becoming trust beneficiaries.
11. Sefton v. Sefton, 206 Cal. Rptr. 3d 875 (Cal. Ct. App. 2012). The
statute governing powers of appointment in effect when the power
was created governs the exercise of the power. The beneficiary was
granted a power of appointment over the trust assets which could be
exercised in favor of his issue. The law governing powers of
appointments in effect when the trust was established provided that unless
the grant of the power of appointment provided otherwise, an exercise
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