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Factual Background:

Settlor created a trust with multiple income beneficiaries.  Settlor specifically named remainder beneficiaries for some of the original income beneficiaries, but for all “others” stated that upon their death, their former share would go to the lawful issue of John Goulding Sr. per stirpes.  John Goulding Sr. had two sons, Patrick and John Jr..  At Patrick’s death, he and John Jr. were each receiving 34.42% of the Trust income, 3.25% of which was each brother’s original share of the income before they began receiving the income of deceased beneficiaries.

At Patrick’s death, the Trustee distributed Patrick’s 34.42% share to his children, in his stead as the lawful issue of John Sr.  In 2005, John Jr. filed a breach of trust action, alleging that when Patrick died, he was entitled to one-half of Patrick’s former share (3.25%) because the Trust stated that for all “other” beneficiaries, which included Patrick, their former share shall accrue per stirpes to the lawful issue of John Sr., which would be John Jr. and Patrick’s children.  In 2007, the court granted partial summary judgment, finding that John Jr. should have received half of Patrick’s 3.25% share, with the other half going to Patrick’s children.

In 2008, John Jr. filed an amended petition claiming that Patrick’s former share included both the 3.25% share and the additional 31.17% being distributed to him as John Sr.’s lawful issue, and thus the Trustee should have distributed half of Patrick’s entire share to John Jr. at his death.  John Jr. moved for partial summary judgment.  The Trustee also moved for partial summary judgment, asking the court to rule that the additional 31.17% being distributed to Patrick at his death was correctly distributed to his children because they took his place as issue of John Sr.

 Jackson County Circuit Court, J. Forsyth, Held:

The circuit court granted the Trustee’s motion for partial summary judgment.  The grandnephew, John Goulding Jr., appealed.

 Court of Appeals, C.J. Hardwick, Held:

Affirmed.  The Trust provides that on the death of an “other named beneficiary,” that beneficiary’s “former share” is to accrue to John Sr. if he is living, and if not, “per stirpes to the lawful issue of John Sr.”  This is not a distribution to a specifically named beneficiary, and thus it cannot be treated as increasing a specifically named beneficiary’s “former share.”  The phrase “former share” as used in the Trust Agreement refers to the amount a specifically named beneficiary received pursuant to the initial terms of the Trust, as increased by any other amount specifically directed to accrue to that named beneficiary upon the death of another beneficiary.  “Former share” does not include the amounts a specifically named beneficiary happened to be receiving by the luck of being an eligible recipient.  The language of the Trust makes the intent of the settlor clear, and that intent must be honored in interpreting the provisions of the Trust.