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Paula Fant WALLACE v. Hetty Jean FANT, AS COTRUSTEE OF the FANT FAMILY TRUST, and Mary Frances Conquest, individually and as cotrustee of the Fant Family Trust and trustee of the Fant Children's Trust
AFFIRMED. NO OPINION.
See Rule 53(a)(1) and (a)(2)(F), Ala. R. App. P.
I agree that the trial court properly dismissed Paula Fant Wallace's complaint on the basis that the complaint failed to state a claim upon which relief can be granted. See Rule 12(b)(6), Ala. R. Civ. P. I write specially to explain why Wallace had no legally protected right in the Survivor's Trust portion of the Fant Family Trust and why she was not a qualified beneficiary of that trust.1 The grantors, Alfred E. Fant and Hetty Jean Fant, husband and wife, established the Fant Family Trust, naming their children Alfred E. Fant, Jr., and Wallace as ultimate, but remotely contingent, beneficiaries. Upon the death of Alfred E. Fant, the trust estate split into two trusts, one of which was designated as the Survivor's Trust–-a revocable trust.
Wallace filed a complaint seeking a declaration of her rights with respect to an accounting of the Survivor's Trust. Wallace alleges in her complaint that Hetty Jean and Mary Frances Conquest, cotrustees of the trust, terminated that trust without her consent, distributed its assets, and denied her an accounting of those assets as required by § 19-3B-813(a)(2), Ala. Code 1975. That section provides that, “[u]nless unreasonable under the circumstances, a trustee shall promptly respond to a qualified beneficiary's request for information related to the administration of the trust.” However, because the Survivor's Trust was a revocable trust, Wallace had no legally protected right in the trust. Hetty Jean was a grantor, the sole beneficiary, and cotrustee of the Survivor's Trust; thus, during her lifetime, she had no duty to account to anyone regarding the trust. Section 19-3B-603(a), Ala. Code 1975, provides: “While a trust is revocable, rights of the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively to, the settlor.” (Emphasis added.) In other words, while a settlor of a revocable trust is alive, beneficiaries other than the settlor have no right to receive an accounting of the trust assets under § 19-3B-813(a)(2). This conclusion is further consistent with one of the stated purpose of the Fant Family Trust:
“(E) To preserve the privacy of Grantors' personal and financial affairs to the maximum extent permitted by law. While either of the Grantors is living, competent, and able to act in such Grantor's own behalf, nothing herein contained shall be construed to permit any beneficiary to control or interfere with the manner in which Trustee administers the trust estate, or to demand and receive any information with respect to the trust estate, except as unconditionally required by law.”
(Emphasis added.)
Wallace also alleges in the complaint that she is entitled to an accounting of the Survivor's Trust because, she says, she is a “qualified beneficiary” of that trust. Section 19-3B-103, Ala. Code 1975, states:
“(14) QUALIFIED BENEFICIARY means a living beneficiary who, on the date the beneficiary's qualification is determined:
“(A) is a distributee or permissible distributee of trust income or principal;
“(B) would be a distributee or permissible distributee of trust income or principal if the interests of the distributees described in paragraph (A) terminated on that date, but the termination of those interests would not cause the trust to terminate; or
“(C) would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date.”
The Uniform Comment interprets § 19-3B-103(14) as follows:
“The qualified beneficiaries consist of the beneficiaries currently eligible to receive a distribution from the trust together with those who might be termed the first-line remainder beneficiaries. These are the beneficiaries who would become eligible to receive distributions were the event triggering the termination of a beneficiary's interest or of the trust itself to occur on the date in question. Such a terminating event will typically be the death or deaths of the beneficiaries currently eligible to receive the income.”
In this case, the Survivor's Trust benefited only Hetty Jean. The trust agreement provides that Hetty Jean is entitled to all the net income of the trust, and to part or all the principal, as requested. In effect, Hetty Jean--as grantor, sole beneficiary, and cotrustee--has total control over the distribution of the trust assets during her lifetime, and she has no fiduciary duty to account to Wallace. Wallace, on the other hand, is not a current distributee under the trust, and, thus, she has no vested right to any of the trust assets while Hetty Jean is still living. As it stands, Wallace would be entitled to the trust assets only upon Hetty Jean's death and only to the extent any assets remain in the trust. This remote and contingent interest in the trust assets does not give Wallace the status to demand an accounting of the trust during Hetty Jean's lifetime. Although an accounting would provide Wallace with information about the trust and its income, assets, and distributions, none of this information would give rise to a cause of action at this point; it would promote neither family unity nor harmony, and it could serve only to provide a basis to question trust-management issues over which Wallace would have no interest and from which she would receive no benefit or utility. In short, during Hetty Jean's lifetime, an accounting could reveal nothing that could have any relevancy to Wallace.
FOOTNOTES
1. Wallace also asserts that she is seeking a declaration of rights with respect to an accounting of a separate trust known as the Fant Children's Trust, the purpose of which was to own, maintain, and pay the premiums on a policy of life insurance on the joint lives of the grantors of the Fant Family Trust. Notably, unlike the Fant Family Trust, Wallace did not attach a copy of the Fant Children's Trust to her complaint for review of its operative provisions; she does not allege in the complaint that she requested and/or was denied an accounting for that trust; and she makes no factual allegations regarding who has possession of the life-insurance policy, who presently owns the policy, or why the policy was never conveyed to the trust. Accordingly, the trial court did not err in dismissing Wallace's claims as they relate to the Fant Children's Trust, or its trustee, Mary Frances Conquest.
WISE, Justice.
Parker, C.J., and Stewart, J., concur. Bolin and Sellers, JJ., concur specially.
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Docket No: 1180484
Decided: March 06, 2020
Court: Supreme Court of Alabama.
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