In re Estate of Fournier
853-855 (2006)
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Rule of Law:
An oral trust for personal property is created when a settlor transfers property to a trustee with the clear intent to have the trustee hold it for a definite beneficiary, and the creation of this trust is established by clear and convincing evidence.
Facts:
- In 1998 or 1999, George Fournier asked a married couple who were his friends to hold money for him.
- Fournier delivered two boxes containing a total of $400,000 in cash to the couple's home.
- Fournier instructed the couple to hold the money in secret until his death and then deliver it to his sister, Faustina Fogarty.
- Fournier explained his reasoning was that Fogarty "needed it more" than his other sister, Juanita Flanigan, because Fogarty had a large family.
- Sometime later, Fournier told Flanigan and her daughter that the couple was holding money for him.
- In 2005, Fournier died.
- After learning of Fournier's death, the couple met with Fogarty and gave her the $400,000.
Procedural Posture:
- Faustina Fogarty petitioned the Aroostook County Probate Court (the trial court) for a declaratory judgment.
- The petition sought a ruling that her deceased brother, George Fournier, had created an oral trust for her benefit.
- Following a hearing, the Probate Court denied the petition, concluding that no trust had been created and the $400,000 was part of Fournier's estate.
- Fogarty appealed the Probate Court's decision to the Maine Supreme Judicial Court.
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Issue:
Does a person create a valid oral trust by transferring a large sum of cash to a third party with explicit verbal instructions to hold the cash until the person's death and then deliver it to a specific, named individual for her personal benefit?
Opinions:
Majority - Dana, J.
Yes. A valid oral trust is created when a settlor transfers property to a trustee with the explicit instruction to deliver it to a designated beneficiary upon the settlor's death, provided this intent is proven by clear and convincing evidence. The court found that the testimony of the couple who held the money provided overwhelming and uncontradicted evidence of Fournier's intent to create a trust for the exclusive, personal benefit of his sister, Faustina Fogarty. Fournier (the settlor) transferred property ($400,000) to the couple (the trustees) with a definite beneficiary (Fogarty) and a clear duty (to hold the money and deliver it upon his death). The probate court committed clear error in finding that Fournier intended for Fogarty to receive the money in her capacity as personal representative of his estate, as the evidence clearly indicated his intent for her to take it in her individual capacity because she 'needed it more.'
Analysis:
This decision reaffirms the validity of oral trusts for personal property under Maine law, emphasizing that the key element is the settlor's intent, which must be established by the high evidentiary standard of 'clear and convincing evidence.' The case underscores the critical role of trustee testimony in proving such intent. Furthermore, it serves as a strong example of an appellate court's willingness to overturn a trial court's factual findings when they are deemed 'clearly erroneous' and contradict overwhelming direct evidence, particularly regarding a transferor's donative intent.
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