A Strong Offense
A Stronger Defense
Recently, a Missouri Court of Appeals found that a claim regarding the validity of a revocable grantor trust was time-barred, as the two-year statute of limitations to bring a claim contesting a trust’s validity had passed when the personal representative of an estate brought suit.
In Morris v. Trust Co. of the Ozarks, 2014 WL 947109, at *1 (Mo. Ct. App. Mar. 11, 2014), the Court found that Section 456.6-604 of the Missouri Uniform Trust Code barred a claim seeking to establish that the trust at issue had terminated as a matter of law at the grantor’s death. Section 456.6-604.1(1) states that “a person may commence a judicial proceeding to contest the validity of a trust that was revocable at the settlor’s death within. . . two years after the settlor’s death. . .”
A revocable trust, also known as a “living trust,” is a trust created during the settlor’s lifetime, with one or more beneficiary, where the settlor has reserved the right to amend or revoke the trust during his or her lifetime.
In Morris, William Groves and his wife, Kathryn, had a revocable grantor trust. When Ms. Groves died, her husband William became sole trustee. Following William’s death in June 2005, his son, Steven became sole trustee. However, Steven died 16 months later in October 2006, and Trust Company of the Ozarks (“Trust Company”), respondent, became successor trustee.
Deborah Morris, appellant, was appointed as personal representative of son Steven Groves’ probate estate, and filed a petition to discover assets held by the Trust Company in October 2008. She argued that the trust, notwithstanding contrary provisions within the instrument, terminated at Williams’ death more than three years before she filed the suit. In a bench trial, the court ruled against appellant without addressing respondent’s statute of limitations defense.
In affirming judgment, the Court of Appeals held that Deborah Morris was essentially contesting the validity of the trust, notwithstanding the language in her pleadings that sought to establish that the trust had terminated as a matter of law under the doctrines of merger and passive trust/statute of uses. See 2014 WL 947109 at *1. In reviewing the record, the Court is entitled to affirm a judgment on “any basis supported by the record.” See Howard Constr. Co. v. Bentley Trucking, Inc., 186 S.W.3d 837, 844 (Mo. App. 2006). The Court found that to charge failure by operation of law via a lawsuit is to contest the validity of the trust. Pursuant to § 456.6-604, Ms. Morris’ claims were time-barred as she had waited longer than two years to file her petition, and the Court affirmed the trial court’s ruling denying Deborah Morris any relief on the merits.