The Utah Court of Appeals recently delivered a significant ruling in a family trust dispute involving Kenneth L. Jenson, Julie G. Jenson, and Caron L. Jenson. The court's decision clarifies the rights of a trust settlor to withdraw assets, even when a trust is labeled as irrevocable. This ruling affects how trusts are interpreted in Utah, particularly regarding the powers granted to settlors and trustees.
The case, known as Jenson v. Jenson (Case No. 20251237-CA), centers on a trust created by Caron L. Jenson, who initially served as the trustee. After resigning, her son Kenneth assumed the role. Caron later amended the trust to declare it irrevocable, which led to a conflict when she requested the transfer of trust assets, a request Kenneth refused. This disagreement prompted Caron to seek legal action.
Background
Caron Jenson established The Caron L. Jenson Trust after the death of her husband, Clifford, in 2009. The trust was initially revocable, allowing Caron to manage her assets, which included farmland and brokerage accounts. Kenneth, one of her four sons, became the trustee after Caron resigned from that position.
In 2010, Caron amended the trust, making it irrevocable. This amendment raised questions about her rights as the settlor, particularly her ability to withdraw funds. Caron later requested the transfer of all trust assets, which Kenneth denied, leading her to file a lawsuit in September 2024. The suit included claims for breach of fiduciary duty, undue influence, and a request for a declaration that Kenneth was required to transfer the trust's principal assets to her.
The Ruling
The Utah Court of Appeals ruled in favor of Caron, affirming the lower court's decision that Kenneth was required to transfer specific assets to her upon request. The court highlighted that Caron held an unrestricted power of withdrawal, which superseded the irrevocability clause. Judge John D. Luthy, along with Judges David N. Mortensen and Ryan D. Tenney, concurred with this interpretation.
The court stated, "notwithstanding the trust’s language of irrevocability, Caron holds an unrestricted withdrawal power."
This ruling emphasized that the trust's provisions allowing the settlor to request payment of principal were valid, even in the context of an irrevocable trust. The court found that the ambiguity in the trust's language could not be resolved in summary judgment, necessitating a factual determination regarding Caron's intent when creating and amending the trust.
Impact
This ruling has significant implications for how trusts are interpreted in Utah. It clarifies that a settlor's power to withdraw assets can exist even when a trust is designated as irrevocable. This decision may influence future trust disputes, particularly those involving family members, as it underscores the importance of the settlor's intent and the specific language used in trust agreements.
Additionally, the ruling may set a precedent for similar cases in which the powers of trustees and settlors are contested. It reinforces the idea that trust provisions must be carefully examined to determine their meaning and enforceability.
What’s Next
The case may still be appealed, as Kenneth and Julie have sought permission to file an interlocutory appeal regarding the court's ruling. The outcome of this appeal could further clarify trust law in Utah and potentially lead to additional legal interpretations in similar cases.