No. 84-358
IN THE SUPREME COURT OF THE STATE OF MONTANA
1985
JAMES F. McCAFFREY, as Conservator
of the Estate of THORVALD K.
LAURSEN, a/k/a T,K, LAURSEN,
Plaintiff and Respondent,
ORVILLE A. LAURSEN, et al.,
Defendants and Appellants.
APPEAL FROM: District Court of the Nineteenth Judicial District,
In and for the County of Lincoln,
The Honorable Robert M. Holter, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Sverdrup & Spencer; Lawrence H. Sverdrup,
Libby, Montana
For Respondent:
Douglas & Bostock; William A. Douglas, Libby,
Montana
Submitted on Briefs: Feb. 8, 1985
Decided: March 26, 1985
Clerk
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
This suit was commenced by James F. McCaffrey as
conservator of the estate of Thorvald K. Laursen to recover
title to certain parcels of real property in Lincoln County,
Montana, and to obtain an accounting for income from the
property. Thorvald K. Laursen, hereinafter T.K., is 92 years
old and his health is failing. He now resides in Washington
County, Oregon, with his granddaughter. McCaffrey, an Oregon
attorney, was appointed conservator by the Oregon court.
On July 21., 1981, T.K. executed a deed which purported
to convey all title and interest in his Lincoln County
property to his son Orville A. Laursen, defendant-appellant
herein. On the same day, a separate document, defendant's
Exhibit E, was executed and signed by Orville A. Laursen.
The document provided:
"The undersigned acknowledges that as of this date
his father, T. K. LAURSEN, did by written Deed
convey certain property to him to be held by him in
Trust for the said T. K. Laursen (a copy of said
Deed is attached hereto). Undersigned covenants
and agrees that all income from such properties
shall belong to T. K. Laursen and that he, the
affiant will re-convey the property to T. K.
Laursen at anytime the said T. K. Laursen requests
and that if the said T. K. 1,aursen should die while
the property is still in the name of affiant such
property shall be considered as an asset of T. K.
Laursen's estate and be disposed of in accordance
with T. K. Laursen's Will."
This document was delivered by appellant to Shelton R.
Williams, T.K.'s attorney.
Based on these d-ocumentsand the testimony of defendant,
the District Court ruled that defendant holds the properties
in trust for his father and by the terms of the trust,
defendant is obligated to reconvey the property to T.K. and
to account for al.1 income from the properties. Appellant
appeals this order and contends that there is no evidence
that a trust existed.
Montana separates trusts into two classes: voluntary
trusts and involuntary trusts. Section 72-20-1.01, MCA. An
involuntary trust is one created by operation of law.
Section 72-20-103, MCA. A voluntary trust is an obligation
arising out of a personal confidence reposed in and
voluntarily accepted by one for the benefit of another.
Section 72-20-102, MCA. Intent to establish a voluntary
trust may be express or implied. However, clear and
convincing evidence establishing intent is required. First
National Bank of Twin Bridges v. Sant (1.973), 161 Mont. 376,
The creation of a voluntary trust as to the trustor j.s
governed by 72-20-107, MCA. Section 72-20-108, MCA,
governs as to the trustee. They provide:
"72-20-107. Voluntary trust--how created - -
as to
trustor. Subiect to the ~rovisionsof 72-24-102, a
voluntary trust is creatgd, as to the trustor and
beneficiary, by any words or acts of the trustor
indicating with reasona.ble certainty:
" (1) an intention on the part of the trustor to
create a trust; and
"(2) the subject, purpose, and beneficiary of the
trust.
"72-20-108. Voluntary trust--how created - -
as to
trustee. Subject to the provisions of 72-24-102, a
voluntary trust is created, as to the trustee, by
any words or acts of his indicating with reasonable
certainty:
" (1) his acceptance of the trust or his
acknowledgment, made upon sufficient consideration,
of its existence; and
"(2) the subject, purpose, and beneficiary of the
trust " .
Section 72-24-102, MCA, refers to trusts concerning real
property. It provides:
"No trust in relation to real property is valid
unless created or declared by:
" (1) a written instrument subscribed by the
trustee or his agent thereto authorized in writing;
"(2) the instrument under which the trustee claims
the estate affected; or
" (3) operation of law. "
The status of Orville A. Laursen, the appellant in this
action, is that of trustee. He was entrusted with the
property of T. K. Laursen. Exhibit. R previously set forth
herein and signed by appellant ack-nowledges that T.K. will-
receive all rents and profits from the properties and that
appellant promises to reconvey the property on request.
Together with the deed referred to therein, they satisfy the
requirements of $ 72-24-102, MCA. This instrument on its
face conclusively proves that appellant accepted the deed
from his father with the intent of holding the property for
the benefit of his father. Appellant promised to convey the
property to T.K. on request. He also promised to convey the
property to T.K. 's estate if T.K. should die without
demanding its return. These promises show appel.lantlsintent
to act as trustee for his father's property. Appellant's
testimony concerning his intent was consistent with the
document. He stated that the purpose of the transaction was
estate planning. We hold appellant met the requirements of §
72-20-1.08,MCA.
T. K. Laursen did not sign Exhibit R , the aforementioned
document. However, he was not required to sign the document
to meet the requirements of $ 72-24-102, MCA. Once those
requirements are met by the actions of the trustee, the
trustor, T.K., must by words or acts indicate with reasonable
certainty: (1) an intention to create a trust; and ( 2 1 the
subject, purpose, and beneficiary of the trust. Section
72-20-107, MCA.
The fact that the document was given to T.K. ' s now
deceased attorney, Shelton Williams, for safekeeping is an
act that tends to show T.K. intended a trust to be created.
Appellant testified that he believed T.K. deeded the property
to appellant because T.K. wa.nted someone to take care of the
property and to take care of him; that T.K. wanted to make
it more difficult for his wife to get the property in T.K.'s
upcoming divorce action; and that T.K. deeded the property to
appellant for estate planning purposes. Appellant's
testimony taken with the circumstances of this case show with
reasonable certainty that T.K.'s intention was to create a
trust when he deeded his property to appellant. We hold the
District Court's finding to be factually sound and legally
correct.
Affirmed.
We Concur: