In re Frei Irrevocable Trust

Emil Frei and Adoria Frei, husband and wife, created an irrevocable trust (Trust) that was a spendthrift trust. The couple’s ten children were named equal beneficiaries under the Trust. After Adoria died, her son, Stephen Brock, successfully petitioned to modify the Trust with Emil’s consent. The petition proposed to alter the language controlling distribution of the Trust property, granting any beneficiary the right to compel distribution of his share of the Trust. The next year, Stephen settled several lawsuits that Emil and his children had brought against him. In the settlement, Stephen agreed to make payments to an alternate family trust, which he did not do. When Emil died, Stephen did not receive his share of the Trust funds. The trustee of the Trust used Stephen’s share of the Trust to pay a portion of his settlement debt. Stephen filed a petition to construe the terms of the Trust and compel repayment of the amount the trustee paid out on his behalf. The district court denied the petition. The Supreme Court affirmed, holding (1) an irrevocable spendthrift trust may be modified by the survivor of two settlers and interested beneficiaries; and (2) therefore, the district court correctly determined that the modification and settlement were valid. View "In re Frei Irrevocable Trust" on Justia Law