Head v. Head

Summarized by:

  • Court: Oregon Court of Appeals
  • Area(s) of Law: Trusts and Estates
  • Date Filed: 03-05-2014
  • Case #: A149899
  • Judge(s)/Court Below: Ortega P.J. for the Court; Sercombe, J.; and Hadlock, J.
  • Full Text Opinion

The court may not grant relief in the form of modifying a trust instrument's terms, if modification was not reasonably contemplated by the parties and substantially departs from the pleadings and legal theories.

Richard Head appealed the trial court’s decision to modify the terms of his mother, Cecilia’s trust. Richard argued that the court did not have authority to modify the terms of the trust, under ORS 130.205(1) or 130.225, because neither party requested a modification. Richard, the plaintiff, argued that the terms of the trust instrument required Robert, the trustee, to fund Trust A with the assets of the Cecilia Head Trust, upon her death. George and Peggy Head, the defendants, argued that the trust became a “discretionary trust,” allowing Robert to use the assets as he saw fit. The Court of Appeals agreed with Richard’s argument that the court lacked the authority to modify the terms of the trust as a remedy. In the pleadings, it is clear that the parties wanted the court to interpret the text of the trusts. The arguments and evidence at trial went towards the proper interpretation of the trust instrument, as to whether Robert had to fund Trust A or whether it became discretionary. Evidence at trial went towards the intent of the trust, and the desire to avoid estate taxes. Modification was never raised and modification as relief was never requested. Modification of the trust’s terms was a form of relief that was not reasonably contemplated by the parties and substantially departed from the pleadings and legal theories brought by both parties. Reversed and remanded.

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