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Factual Background:

Decedent died intestate.  He had a life insurance policy with Crown Life Insurance Company and Canada Assurance Company.  The policy was owned by Melanjo Investment, Inc.  Decedent’s dad and sister were the sole directors of the company.  His parents and sister paid the premiums on the policy.  The company executed a trust, of which Decedent’s parents and sister were the trustees and primary beneficiaries.  At the time the trust was created, no property was identified or placed in the trust.  Approximately 18 months later, the company transferred most of the ownership in the policy to the trust and designated the trust as the beneficiary of most of the proceeds.  There was no contingent beneficiary.  The trust was also named the contingent owner and contingent beneficiary of another life insurance policy which also insured the life of Decedent.  After insured died, the company’s president filed a death claim and the death benefits were paid to the company.  Decedent’s children, his only heirs, brought an action against Crown Life Insurance Company and Canada Life Assurance Company to challenge payments to the trust.

Held:

Trial court entered summary judgment in favor of insurers.  Heirs appealed contending: 1) the trial court erred in granting Insurance Companies’ motion for summary judgment because a genuine issue of material fact existed with respect to the manner in which the contract disposed of the insurance proceeds in the event that the Trust was nonexistent; 2) that the trial court erred in granting summary judgment to Insurance Companies because the evidence demonstrated that the Trust did not exist at the time of the death of Insured and the insurance contract did not provide a contingent beneficiary; and 3) that the trial court erred in not entering summary judgment for Heirs because the Trust did not exist at the time of death of the Insured and the insurance contract did not provide a contingent beneficiary.

On Appeal:

Affirmed.  Court held that the life insurance trust statute, §456.030 (re-numbered as §456.005) did not require that the trust and beneficiary designations be made simultaneously.  A trust does not need to be funded or have a corpus.  It need only have the right to be able to receive proceeds of a life insurance policy.  Therefore, the trust was valid, even though the policyholder executed a title request to transfer ownership to the trust more than one year after it was created.

Absent ambiguity in the terms, the intent of the grantor of a testamentary or inter vivos trust is to be ascertained from the four corners of the instrument without resort to parol evidence as to that intent.  The Nineteen page trust document established the company’s intent to create a trust.