When trust assets consist wholly of real property, the trustee has the authority to sell the realty in order to pay the necessary sums to the beneficiary even when the trust language itself does not expressly authorize the sale. It is presumed that the testator intended a beneficiary to be supported and maintained from estate income or from sale of part of the corpus.
A mother who was institutionalized in a nursing home was the beneficiary of her son's testamentary trust. The trustee was also the appointed guardian of the mother and her own assets. There was a large, outstanding bill from the nursing home due, so the guardian sought permission from the chancery court to sell guardianship assets to pay the bill. The testator's siblings, the mother's two other children, filed a petition to require the guardian to first sell the assets of the testamentary trust to support their mother before the mother's own assets, as controlled by her guardian, were used. The petitions were consolidated for trial. The guardian sought to sell guardianship assets to pay the bill and the children filed the petition to require the guardian to first sell the trust assets. Because the guardian was the residuary beneficiary of the testamentary trust, a new guardian was appointed. The chancery court dismissed the children's petition to sell the trust assets finding that testator intended that his testamentary trust be used to support his mother only in the event her own property was insufficient to maintain her.
Must trust assets from a guardianship be exhausted before the assets of a testamentary trust be used?
The appellate court reversed finding that the trust assets could be used to support the mother even before her own assets were depleted. The court interpreted the will establishing the testamentary trust from its four corners. The court presumed that the testator understood the meaning of the terms he used and intended that the trust be used to support his mother. The court noted that the testator could not control what the mother did with her property. The court concluded that there was no intention in the will that the guardianship assets had to be exhausted before the trusts assets were used.