TAIT V. COMMUNITY FIRST TRUST CO.
____ S.W.3d ____ 2012
NATURE OF THE CASE: Debbie Tait, Kerry Jones, Leanna Lackey, and Lesia Winters (Ds)
appeal the order denying their claim to a share in the Fowler Family Trust over which
Community First Trust Company (P) serves as trustee.
FACTS: William J. Fowler (no offspring) and his wife Annie R. Fowler (six children from a
previous marriage) established the Fowler Family Trust. The trust res consisted of the
following three classes of property: (1) property that William had owned separately, (2)
property that Annie had owned separately, and (3) property that William and Annie had owned
jointly. The trust authorized the trustee to dispense to William and Annie the income and
principal during their lifetimes as needed for their support. Although initially the trust
was revocable, the trust instrument provided that it would become irrevocable when either
William or Annie died. At the death of the survivor, the trust was to terminate, and the
principal and income of the trust was to be distributed in the following manner. The jointly
owned property and William's separate property was to be apportioned equally among William's
two stepchildren, Dale Paschal Jones and Billy Ray Jones, and ten of his nieces and nephews,
including Tommy Dean Fry. Annie's separate property was to be disbursed in equal shares to
three of her children. Annie died in May 2001. William's stepson Dale Paschal Jones died in
November 2004, survived by his daughters, Leanna Lackey and Lesia Winters (Ds). William's
other stepson, Billy Ray Jones, died in November 2008, survived by his daughters, Debbie
Tait and Kerry Jones (Ps). William's niece, Tommy Dean Fry, died in June 2009 without issue.
After the deaths of these three named beneficiaries, William died in January 2011. P filed a
petition to construe the trust taking the position that the interests of the deceased
beneficiaries lapsed because they predeceased William, the surviving settlor, and that Ds,
the descendants of William's stepsons, were not entitled to share in the remainder of the
trust. P relied on the anti-lapse provision of Arkansas Code Annotated section 28-26-104(2)
(Repl. 2012). Ds argued that the interests of the deceased beneficiaries did not lapse
because their interests vested at the time the trust was created. Applying the 'common law
rule,' the court found that Ds could not share in the trust because their fathers' interests
lapsed when they predeceased William. Ds appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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