On February 29, 2024, the Supreme Court of Mississippi affirmed a decision of the Chancery Court of Madison County, Mississippi that reformed an irrevocable trust established in 1992 based on an alleged scrivener’s error.
Previously, on November 1, 2022, after at trial on the merits, the Chancery Court found that the trustee, represented by BBJ, had met its burden under the relevant statute to warrant the relief requested.
Part of the Uniform Trust Code, Mississippi Code Section 91-8-415 provides: “The court may reform the terms of a trust, even if unambiguous, to conform the terms to the settlor’s intention if it is proved by clear and convincing evidence what the settlor’s intention was and that the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement.” Miss. Code Ann. § 91-8-415 (Rev. 2021).
The trust was designed, initially, to benefit sixteen specific individuals, three of which were the children (now adults) of the grantor, Elton G. Beebe, Sr. The trust was to terminate upon the last death of the sixteen named individuals. The issue before the chancery court was, at that time, how would the trust’s assets be distributed.
As drafted, the assets presently worth nearly $100,000,000 and comprising a substantial portion of the grantor’s life’s work, would be distributed to the lineal descendants of the initial sixteen individuals, many of which are now deceased or at least 80 years of age.
The trustee argued this to be in error, stating Elton’s intent was that for the assets to be distributed to his lineal descendants and not the lineal descendants of the initial sixteen, which would consist of a large number of people. Indeed, the trustee named nearly forty adult respondents in its initial petition, roughly three dozen of whom joined in the petition. Multiple minor children were represented by a guardian ad litem. An additional respondent was also named during the litigation after a baby was born. The only parties opposing the reformation consisted of the widow of one of Elton’s brother, one of the widow’s daughters, and said daughter’s two adult children.
Elton testified that he did not understand the provision at issue and how it legally operated and that he assumed, based on the fact that his children were named among the initial sixteen beneficiaries, coupled with the fact that the others named were in Elton’s generation, the assets would pass to their descendants, which were also Elton’s descendants. The chancery court found Elton’s testimony to be credible, as well as supported by other testimony and evidence and applicable rules of construction.
The parties opposing the reformation argued Elton changed his intent in 2019; however, they provided no testimony or evidence as to Elton’s intent during the relevant time, e.g. when the trust was formed in 1992.
FUN FACT: the opinion referred to and relief on, at least in part, the Supreme Court’s prior decision in another trust matter, being Olin v. Richards (In re Est. of Blackburn), 299 So. 3d 781, 783 (Miss. 2020). This case also involved a reformation based on a scrivener’s error, and the prevailing trustees in that case were also represented by BBJ.
Advocating on behalf of the trustee at trial and on appeal were shareholders, Trip Barnes and Will Janoush.
BBJ routinely represents clients in trust litigation matters, including with respect to Mississippi’s relatively recent adoption of the Uniform Trust Code.
