Barrett v. Barrett

by
William Barrett ("Bill") appealed a circuit court order entering summary judgment in favor of George Harvey Barrett ("George") and the trustees of the George Harvey Barrett Trust--Gail Ledbetter Cole Kaphan, Curtis L. Barrett, Jr., and Charles Ledbetter (collectively, "the trustees"). He also challenged the denial of his motion for a partial summary judgment on the basis that the circuit court lacked the authority to modify the trust. In 1999, Ben and Janet Barrett died in a plane crash. The Barretts' wills, the applicable provisions of which were identical, established the "Children's Trust" for the benefit of George and his two younger siblings and provided that each child would receive his or her portion of the trust proceeds upon reaching age 25 and that the trust would terminate when the youngest child reached age 25. In June 2000, the circuit court, on the petition of the trustees, modified the Children's Trust to establish separate trusts for each Barrett child and to provide that the trustees "are required to pay 40% of the trust assets to each Barrett child upon his or her attainment of 25 years of age and the remaining 60% of said trust assets upon the attainment of 35, at which time said Trust shall terminate." The trust assets were largely Central Alabama Bancshares, Inc. stock. In August 2014, George offered to sell a share of his bank stock to his cousin Bill because the trustees refused to give him enough money from the trust to meet his financial needs. While George was an inpatient at a rehabilitation center, Bill's attorney wrote a letter to Curtis informing Curtis that George would be turning 35, and requested the trustees transfer either to Bill or to George the bank stock and all dividends that had been paid on the stock since August 22, 2014. The trustees informed Bill that they would not turn over the bank stock to him absent a court order. George was discharged with instructions that he have a conservator, due to his memory and attention impairments. The trustees thereafter petitioned to modify the trust because George was unable to manage his financial affairs. The trustees did not name Bill as a necessary party to the trust-modification proceeding despite knowing that he had a claim against the trust assets. The Alabama Supreme Court found that the circuit court erred in finding the agreement between Bill and George void ab initio, thereby precluding Bill from enforcing his rights under that agreement. "The circuit court's interpretation of the shareholders agreement does not comport with the plain language of the agreement, and, in fact, dictates an inequitable result." View "Barrett v. Barrett" on Justia Law