In re Katherine E. Reece Trust.
2023 COA 89. No. 22CA1393. Trust Construction—Support and Maintenance—Standard of Living.
September 28, 2023
While Reece and Frascona were married, Frascona executed his last will and testament, which established the Katherine E. Reece Trust (trust) with his residuary estate. Reece is a trust beneficiary. Frascona and Reece separated about nine years after marrying and executed a separation agreement providing, among other things, that Reece would remain a trust beneficiary until the decree of dissolution of marriage had been entered. The separation agreement was incorporated into a decree of legal separation. Frascona then died in an airplane crash while still married to Reece. The probate court later determined that the trust was a testamentary trust that became irrevocable at Frascona’s death. The court found that Reece’s standard of living at the time of Frascona’s death, including during the period of separation, was the applicable standard for the trust administration.
On appeal, Reece contended that the probate court erred by limiting the standard of living she enjoyed during marriage to only the time between the beginning of the legal separation and Frascona’s death, so the probate court misconstrued Frascona’s intent and effectively rewrote the trust. Reece maintained that no consideration should be given to the legal separation period in determining the standard of living she enjoyed during her marriage to Frascona, and the probate court should have ascertained her standard of living by looking at her income and expenses for the three years immediately preceding the legal separation. However, under the trust provisions, Reece’s standard of living is measured by the standard she enjoyed “during [her] marriage” to Frascona. Because the marriage was not terminated until Frascona’s death, the legal separation period was part of their marriage and therefore must be considered in measuring Reece’s standard of living. Further, under § 50, cmt. d(2) of the Restatement (Third) of Trusts (Am. L. Inst. 2003), the standard of living for purposes of support and maintenance “is ordinarily that enjoyed by the beneficiary at the time of the settlor’s death or at the time an irrevocable trust is created.” Accordingly, the standard of living is measured at the time of Frascona’s death, which is also the time when the trust became irrevocable, and the probate court did not err.
The order was affirmed.