Plain Meaning of the Trust is What Governs
August 15, 2019
The Second District Court of Appeal’s opinion in Ebeling v. Ebeling (June 7, 2019) reiterated this concept of trust construction.
In Ebeling, the trial court construed the terms of a trust to determine the entitlement to the trust’s assets. The trial court’s decision on distribution to contingent beneficiaries named in the trust rater than the decedent’s estate was reversed.
The trust was governed by Illinois law but that did not make any difference. Under Illinois law, just as in Florida, courts are required to look to the plain meaning of the trust document in determining how to enforce its terms. This requires the trial court to look solely at the four corners of the trust document, unless there is an ambiguity in the terms of the trust, that would allow the court to look to extraneous information to determine the settlor’s intent.
The Second District, in reviewing the matter de novo, determined that the Trust at issue here was unambiguous such that its disputed provisions were to be construed within its four corners. In reviewing this Trust as a whole, within its four corners, it was clear that the intent was to distribute the corpus of the trust at certain times, and direct how trust income was to be paid. The contingency that the contingent beneficiaries had argued for, that they would be entitled to distribution if the other children were not alive to receive their distribution, never occurred.
If you have questions on a trust, whether as a trustee or a beneficiary, an experienced trust attorney can review the trust documents to advise and guide you.