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In re Sunray Holdings Trust

Supreme Court of South Dakota

December 11, 2013

In the Matter of SUNRAY HOLDINGS TRUST.

Considered on Briefs Nov. 4, 2013.

Page 272

Robert M. Ronayne, Thomas J. Cogley of Ronayne & Wein, LLP, Aberdeen, South Dakota, Attorneys for appellants Lee and Linda Shoup.

William M. Van Camp, Jr. of Olinger, Lovald, McCahren & Reimers, PC, Pierre, South Dakota, Attorneys for appellee Gregory Shoup.

Paul E. Bachand of Schmidt, Schroyer, Moreno, Lee & Bachand, PC, Pierre, South Dakota, Attorneys for appellee Larry Shoup.

ZINTER, Justice.

[¶ 1.] Lester and Harriet Shoup created an inter vivos trust. After their deaths, their only children, Gregory and Larry Shoup, moved to terminate the trust. They argued that the trust only provided for Lester and Harriet during their lives and there was no trust provision directing disposition of the remaining trust assets. Therefore, they contended that the trust had fulfilled its purpose. Lee and Linda Shoup, Gregory's children, objected. They

Page 273

argued that the trust had not fulfilled its purpose. They contended that two letters found with the original trust document instructed on the disposition of trust assets. Following a non-evidentiary hearing, the circuit court terminated the trust. We affirm.

Facts and Procedural History

[¶ 2.] Lester and Harriet had two children, Gregory and Larry. In 1993, without the assistance of a lawyer, Lester drafted a trust document titled, " Sunray Holdings." The trust named Lester and Harriet as the " Trustor." It named Lester, Harriet, Gregory, and Larry as " Co-Trustees."

[¶ 3.] Lester died in 2008, and Harriet died in 2012. After Harriet's death, Gregory opened a safe-deposit box rented by the trust. The safe-deposit box contained a manila envelope, which contained the original trust document and a smaller sealed envelope. The smaller envelope had the following handwritten note on the front: " Instructions for Sunray Holding Trust to be opened on death of grantors [sic] Lester Shoup & Harriet Shoup 4/22/94."

[¶ 4.] The smaller envelope contained a two-page handwritten letter (" 1994 letter" ) signed by Lester and Harriet. The letter instructed the trustees on a variety of matters, including compensation for Gregory for managing the trust and cash payments for Gregory, Larry, Lee, and Linda. The 1994 letter also indicated: " After eight years the trust can be divided if it is the best business decision at that time. Larry 1/3 Greg 1/3 Lee 1/6 and Linda 1/6."

[¶ 5.] The manila envelope also contained a one-page handwritten letter titled, " Sunray Holdings Trust Instructions 11/05/07" (" 2007 letter" ). The 2007 letter stated that the distribution of trust income should be as follows: " Greg 30%— Larry 30%[,] the remaining 30% will be divided between Linda and Lee." The 2007 letter also directed certain lump-sum payments and referred to Lee and Linda as " co-trustees." There were no signatures on the 2007 letter. The words " Signed by" were written at the bottom but were crossed out. The 2007 letter did not mention the ultimate disposition of trust property.

[¶ 6.] Gregory, as trustee, petitioned the circuit court to interpret, construe, and issue instructions directing the trustees on proper administration and distribution of the trust. Gregory also ...


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