## Facts

- A grandmother bought a $1,000 U.S. savings bond shortly after the plaintiff’s birth, registered in the names of the father and/or the plaintiff and/or the mother, intended to fund the plaintiff’s education.
- A family client later made a $500 gift for the plaintiff (and identical gifts for two siblings) by depositing $1,500 into a savings account titled in the father’s and the children’s names.
- The father later cashed the bond and closed the savings account, using the proceeds (including $1,000 from the account) to buy Commercial Bank stock.
- The stock was registered to the father as “custodian under the laws of Oregon” for the plaintiff (and similarly for the other children).
- The father testified the bond was to be used for the plaintiff’s educational needs and wrote a letter stating he held his children’s property “in trust.”
- The father did not maintain separate, detailed records for the plaintiff’s property or its income and presented only a summary of expenditures (e.g., ballet-related expenses) benefiting the plaintiff and, at times, other family members.
- The plaintiff sued in equity to compel an accounting, alleging the father held assets in trust for her benefit; the trial court dismissed, finding no trust and treating the stock as UGMA custodial property.

## Issues

1. Whether gifts intended for a child’s education can create a trust without use of the words “in trust.”
2. Whether a fiduciary can convert previously trust-held property into UGMA custodianship by later registering replacement assets as “custodian.”
3. Whether the father, if a trustee, bore the burden to account with adequate records and prove expenditures were proper trust disbursements.

## Decision

- The Oregon Supreme Court reversed the dismissal and remanded.
- The court held a trust existed as to the education-directed gifts despite the absence of formal trust language.
- The father’s later designation of himself as UGMA “custodian” when registering the bank stock did not alter his status or expand his authority over property already subject to a trust.
- Because the father was a trustee, he owed fiduciary duties to maintain records and provide an accounting consistent with trust law.

## Legal Principles

- No particular words are required to create a trust; a trust arises when property is transferred with intent that beneficial ownership vest in a third person.
- A trustee cannot unilaterally recharacterize trust property (including by changing title form) to increase discretion or reduce beneficiary protections.
- Trust fiduciaries must keep accurate records and provide a meaningful accounting; inadequate recordkeeping weighs against the fiduciary when challenged.

## Conclusion

The court recognized an enforceable trust for the plaintiff’s educational gifts based on donative intent and the father’s own acknowledgments, rejected the attempt to expand control by relabeling assets under UGMA, and required the father to account as a trustee.


Jimenez v. Lee, 547 P.2d 126 (Or. 1976)