260 Kan. 573, 921 P.2d 803
On March 29, 1990, while hospitalized, Will C. Taliaferro executed two revocable trust indentures along with a will and other documents prepared by his nephew, an attorney with limited estate planning experience.1 One document established the Taliaferro & Browne Trust covering his engineering firm and a life insurance policy, which was addressed in a prior decision.2 The second document created the Will C. Taliaferro Trust, a personal revocable inter vivos trust.3
The Will C. Taliaferro Trust declaration stated that Will C. Taliaferro appointed himself as trustee and accepted and held in trust all property described in Schedule A attached to the indenture.4 Schedule A listed all Douglass Bank stock solely owned by the grantor.5 Schedule A also listed his entire interest in Equitable Insurance Company Policy number 34-590-634 MSC/KSM on the life of Carl Buckner.6 Schedule A further listed all of his household goods, safe deposit box contents, and other tangible personal property.7 Will C. Taliaferro was designated as the income beneficiary during his lifetime, with the successor trustee to distribute assets after his death among named beneficiaries, remainder to his wife Betty Taliaferro.8
Will C. Taliaferro died on September 1, 1990.9 Betty Taliaferro, his wife, sole heir, executor of his will, and designated successor trustee, initiated a declaratory judgment action challenging the validity of the Will C. Taliaferro Trust.10 In her petition, she alleged that no property had been transferred into the trust and that Will C. Taliaferro had treated the assets as his individual property during his life.11
The trial court first considered cross-motions for summary judgment and determined a material question of fact existed regarding intent, leading to an evidentiary hearing.12 Following the hearing, the trial court concluded the trust was invalid.13 Proponents of the trust appealed the decision to the Supreme Court of Kansas.14
Whether Will C. Taliaferro transferred definite property sufficient to create a trust?15
A trust may be created by a declaration by the owner of property that he holds it as trustee for another person.16 Where the settlor is also the trustee, no transfer of legal title to the trust property is required to fund the trust because the trustee already holds legal title, and the declaration divests an equitable interest to the beneficiaries.17
Yes. On March 29, 1990, Will C. Taliaferro executed the Will C. Taliaferro Trust declaration appointing himself as trustee and declaring that he held in trust all property described in Schedule A attached to the indenture.18 Because Will C. Taliaferro was both settlor and trustee, the declaration itself transferred the property into the trust without any further assignment or deed.19
Will C. Taliaferro transferred definite property sufficient to create the trust through his declaration.20
Whether Will C. Taliaferro manifested a present intent to transfer an equitable interest in his property and thereby create a trust through his declaration of trust?21
Yes. The trust instrument on its face unequivocally and unambiguously evidenced Will C. Taliaferro's intent to create a present trust at the time it was executed.24 He declared that he accepted and held the Schedule A property in trust as trustee.25 The trial court erred by considering extrinsic evidence of later conduct because the declaration was unambiguous and the parol evidence rule barred its use to contradict the instrument.26
Will C. Taliaferro manifested a present intent to create the trust through the declaration.27
Whether Will C. Taliaferro agreed to act as trustee?28
Yes. Will C. Taliaferro signed the trust instrument in which he expressly declared that he accepted and held the Schedule A property in trust as trustee.31 This unambiguous declaration establishes acceptance as a matter of law regardless of his later treatment of the assets.32 The focus remains on acceptance at execution rather than any subsequent handling of the property by the settlor-trustee.33
Will C. Taliaferro agreed to act as trustee.34