In 1997, the settlor, Stephen M. Gunther, established the Stephen M. Gunther Revocable Living Trust and named J. Barry Gunther as the initial trustee. In 2006, the settlor amended the trust, naming himself as the trustee and changed the residuary beneficiary upon his death to his then-living descendants, subject to a contingent trust for any beneficiaries under the age of 25. The settlor died in March 2009, leaving his wife, Angel, and two minor children beneficiaries. One year after the settlor’s death, the beneficiaries filed a petition for accounting. They sought accounting of the trust from its inception on 1997 until its amendment in 2006 and from settlor’s death to date.
St. Louis County Circuit Court, J. Ross, Held:
The trial court concluded that the trustee had no fiduciary relationship with the beneficiaries before the settlor’s death, and therefore, the beneficiaries were not entitled to an accounting of trust transactions prior to that date. Summary judgment was awarded against the plaintiff beneficiaries and in favor of the defendant trustee. The beneficiaries appealed.
Court of Appeals, J. Mooney, Held:
Affirmed. While finding no Missouri case addressing the precise question of whether the beneficiaries are entitled to an accounting covering the years the settlor was alive, the Court looked to Section 456.6-603.1 of the Missouri Uniform Trust Code which provides, “while a trust is revocable and the settlor has capacity to revoke the trust, rights of the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively to, the settlor.” Therefore, while a trust is revocable, all rights that beneficiaries would otherwise possess are subject to settlor’s control.
While pointing out it has no precedential value, the reasoning in the Alabama case of Ex parte Synovus Trust Co., 41 So.3d 70, 74 (Ala. 2009) was found to be persuasive in this case as well. In Synovus, the parents, who were settlors and beneficiaries of two revocable trusts, and their children, who were also beneficiaries of the two trusts, sued the trustee and other defendants for breach of fiduciary duty and other claims. The Alabama Court found that regardless of whether the children had suffered injuries to their rights as trust beneficiaries, the defendants owed duties exclusively to the settlors/parents during this time.
Similarly in this case, the Court found the trial court was correct in determining the trustee had no fiduciary relationship with the beneficiaries until settlor’s death, and thus, owed no duty to the beneficiaries to give them an accounting before that date.