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GULF NATIONAL BANK v. DAVID STURTEVANT

AUGUST 19, 1987

GULF NATIONAL BANK
v.
DAVID STURTEVANT



BEFORE HAWKINS, P.J., AND PRATHER AND ANDERSON JJ.,

ANDERSON, JUSTICE, FOR THE COURT:

This is an appeal from a decree of the Chancery Court of Harrison County, involving a dispute over the adequacy of payments to the beneficiary of certain trusts.

Margaret Coolidge Sturtevant, an elderly, well-to-do widow, set up two trusts for the benefit of her son David. One was a testamentary trust, providing that David should receive, every month," a sum sufficient for his maintenance, comfort and medical expenses. "She also set up The Margaret Coolidge Sturtevant Trust No. 1, which provided that after her death, payments to David in the" sole discretion "of the trust, but stipulated that the payments should never exceed $200.

 Appellee Gulf National Bank (GNB) was made the trustee of both trusts, and was given" sole discretion "as to any payments made to David.

 Mrs. Sturtevant died in 1979. David Sturtevant is currently unemployed and living in an apartment house in Los Angeles, the ambience of which can be deduced from its popular nickname -" Roach Haven. "At the time of

 trial, disbursements from the testamentary trust were in the amount of $1,100 per month, of which $700 went directly to David and the balance to the IRS to pay off a tax lien which had been imposed against him. As for Trust No. 1, no payments had been made under it at all for two years.

 In 1981 David filed a bill in the Chancery Court of Harrison County alleging that GNB was refusing to disburse adequate funds to him under the trusts. He sought construction of the trust instruments, a declaratory judgment as to his rights under them, and relief in the form of increased payments.

 After hearing the evidence, the chancellor found that David could not live in" comfort "on $700 per month, and thus concluded that GNB had abused its discretion as trustee. He ordered GNB to pay David a lump sum from Trust No. 1 and to increase the monthly payments. GNB appeals, taking the position that the chancellor effectively disregarded the provision that disbursements were to be made in its" sole discretion. "

 The chancellor's findings, of course, are entitled to the usual degree of deference. They will be disturbed on appeal only if we conclude that he was manifestly wrong. E. g. Harkins v. Fletcher, 499 So. 2d 773 (Miss. 1986); Dunaway v. Busbin, 498 So. 2d 1218 (Miss. 1986); Spain v. Holland, 483 So.2d 318 (Miss. 1986).

 The only real issue in this appeal is whether or not the chancellor erred by finding as a fact that David Sturtevant could not subsist" in comfort "on $700 per month. As the appellant's brief points out, it is well known that a trust must be administered according to the intent of the settlor. E.g, D'evereaux Hall Orphan Asylem v. Green, 226 So. 2d 725 (Miss. 1969); Reedy v. Johnson's Estate, 200 Miss. 205, 26 So 2d 685 (1946). In disputes concerning the amount disbursed under trusts, courts are very deferential to the trustee's judgment. However, in the present case, if the chancellor was right in finding the current payments cannot maintain David in" comfort "then as a matter of course, he was also right in finding the trustees abused their discretion, since in such a case they would be frustrating the settlor's obvious purpose rather than furthering it. Thus, the significance of the word" comfort "in the trust instruments becomes of decisive importance in determining whether or not the trustees adequately fulfilled their responsibilities.

 It is not unusual for a settlor to create a trust

 designed to maintain the beneficiary in" comfort ", or words to that effect. Even in cases where the terms of the trust give the trustees" sole "or" absolute "discretion, terms such as" comfort "limit this discretion by furnishing boundaries past which the trustee cannot go except at peril of being found to have abused his discretion. As one court put it:" A trust conferring upon the trustees power to distribute income and principal in their absolute discretion "but which provides standards by which that discretion is to be exercised with reference to the needs of the trust beneficiary for education, care, comfort or support, it is neither a purely discretionary trust nor a strict support trust. . . ." Martin v. Martin, 54 Ohio St. 2d 101, 374 N.E. 2d 1384, 1389-90 (1978).

 "Comfort" means different things to different people. Where it appears in a trust document, however, courts have generally held the settlor "intended to provide for the maintenance of the beneficiary in the social and economic position in which the latter had been living at the time of the creation of the trust. . . ." 8 G. Bogert, The Law of Trusts and Trustees, 811 (Rev. 2d ed. 1981). See also, e. g., Blodgett v. Dulaney, 201 F. 2d 589, 593 (1st Cir. 1953); Equitable Trust Co. v. Montgomery, 28 Del. Ch. 389, 44 A. 2d 420, 423 (1945); Amoskeag Trust Co. v. Wentworth, 99 N. H. 346, 111 A. 2d 198, 200 (1955); Kuykendall v. Proctor, 270 N.C. 510, 155 S. E. 2d 293, 301 (1967).

 Similarly, one court held that where a trust beneficiary had an income of just under $10,000 and the trustees made payments to him of $4205 at a time when the trust had accumulated $30,000 in income, the payments were not sufficient to maintain the beneficiary in "comfort" in accordance to the terms of the ...


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