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Keywords

trustwill
contractdefendanttrialprobatetrustwill

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Brown v. International Trust Co., 130 Colo. 543, 278 P.2d 581

Facts

Carroll H. Wegemann died on January 6, 1952, leaving a will that directed the proceeds of his life insurance policies to be paid to his grandchildren through a third party. However, prior to executing the will, Wegemann had established a life insurance trust agreement with the International Trust Company, which designated the company as the trustee and outlined the terms under which the insurance proceeds were to be managed. The trust agreement included provisions that allowed Wegemann to revoke the trust during his lifetime, which he did not do before his death.

The controlling facts which give rise to this controversy are not in dispute. January 6, 1952, one Carroll H. Wegemann died in the City and County of Denver leaving a will dated September 25, 1951. This will was admitted to probate and defendant in error Isabel Becker was appointed administratrix with the will annexed.

Issue

Will the subsequent execution of a will, which purports to dispose of the corpus of the trust in a manner at variance with the terms of the trust agreement, operate to remove the property from the trust and authorize delivery thereof to the legatee named in the will?

Where a settlor establishes a trust concerning the proceeds of insurance policies payable upon his death, and by the terms of the trust agreement reserves the power to revoke during his lifetime and specifically prescribes the manner in which the power of revocation shall be exercised; will the subsequent execution of a will, which purports to dispose of the corpus of the trust in a manner at variance with the terms of the trust agreement, operate to remove the property from the trust and authorize delivery thereof to the legatee named in the will?

Rule

A settlor may revoke a valid trust where a power of revocation is validly reserved, but if a particular method of revocation is specified, that procedure must be strictly followed in order to make the revocation effective.

A settlor may revoke a valid trust where a power of revocation is validly reserved, but if a particular method of revocation is specified, that procedure must be strictly followed in order to make the revocation effective.

Analysis

The court determined that Wegemann's will could not alter the terms of the trust agreement because the trust was validly established and the settlor had reserved the right to revoke it only through a specific process during his lifetime. Since Wegemann did not follow the prescribed method of revocation, the trust remained in effect, and the insurance proceeds were governed by the trust agreement rather than the will.

The question is answered in the negative. In the instant case the settlor Wegemann and the International Trust Company entered into a contract by the terms of which the Trust Company accepted the responsibilities of trustee under all the terms and conditions contained in the agreement. Our Court cannot alter or amend that contract.

Conclusion

The Supreme Court affirmed the lower court's judgment, ruling that the attempted disposition of the insurance proceeds by will was ineffectual due to the prior trust agreement.

The judgment is affirmed.

Who won?

Isabel Becker and the International Trust Company prevailed in the case because the court upheld the validity of the trust agreement over the provisions of the will.

The trial court entered judgment in favor of defendants the International Trust Company and Isabel Becker, and Brown, seeking reversal of the judgment, brings the case to our Court for review by writ of error.

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