## Facts

- Virginia Stinson Smith and her husband, John J. Smith, had a son, Charles Loraine Smith, who was mentally incompetent.
- Virginia entered into an inter vivos trust agreement naming Emily Phillips as trustee.
- The trust directed that the trustee should pay the trust’s net income to John and Charles, while giving the trustee sole discretion to decide the proportions and amounts paid to each.
- The trust further stated that if at any time a beneficiary was under a legal disability, the trustee could distribute trust income for that beneficiary’s “support, maintenance and welfare” in such amounts as the trustee determined were necessary.
- The trust also allowed the trustee to use trust income for the trustee’s own support and welfare.
- On termination of the trust, the trustee was to receive the residue of the trust property, giving Phillips a remainder interest that increased if income was not distributed to the beneficiaries.
- After Virginia’s death, Charles initially lived with Phillips, but other family members removed him from Phillips’s home due to concerns about his welfare.
- A Virginia court appointed Benton Pollok (later Jessie Carter) as guardian of Charles’s person and estate.
- After Charles was removed from her home, Phillips refused to make payments from the trust for Charles’s support, maintenance, or welfare, except for maintaining his medical-insurance policy.
- Pollok sought distributions to meet Charles’s ongoing needs; Phillips maintained that the trust gave her complete discretion and imposed no enforceable obligation to distribute.
- Pollok filed a declaratory judgment action in the Circuit Court of Kanawha County, seeking a declaration that the trust imposed a nondiscretionary duty on Phillips to disburse funds for Charles’s support.
- The circuit court ruled for Phillips, concluding she had no duty to make distributions beyond those she chose to make, and Pollok appealed.

## Issues

1. Whether a trustee granted “sole” or seemingly absolute discretion over trust income distributions nevertheless has a judicially enforceable duty to make distributions for the support, maintenance, and welfare of an incompetent beneficiary when the trust’s language and purpose indicate a support objective.
2. Whether a trustee who may benefit personally from withholding distributions (as a permissible income beneficiary and the remainder beneficiary) may treat the distribution power as unrestrained, or instead must exercise discretion within fiduciary limits consistent with the trust’s purpose.

## Decision

- The Supreme Court of Appeals of West Virginia reversed the circuit court’s judgment.
- The court held that the trustee did not have unrestrained discretion to refuse all support-related distributions to the incompetent beneficiary.
- Reading the trust as a whole, the court concluded the instrument reflected an intent to provide for the husband and incompetent son, and the trustee’s discretion concerned the amount and manner of payment—not whether distributions could be withheld to defeat the trust’s support function.
- The case was remanded for further proceedings consistent with the conclusion that reasonable distributions should be made for Charles’s support.

## Legal Principles

- A trust is interpreted to carry out the settlor’s intent as expressed in the instrument read as a whole.
- Broad discretionary language does not eliminate a trustee’s fiduciary duties; discretionary powers must be exercised in good faith and in line with the purposes of the trust.
- When a trust’s language indicates a support function for a beneficiary, a trustee’s discretion is commonly treated as discretion over timing, method, and amount, rather than permission to provide no support at all.
- Courts may review and control a trustee’s exercise of discretion where the trustee’s conduct defeats the trust’s purpose or amounts to an abuse of discretion.
- When the trustee holds a personal beneficial interest that can increase through nondistribution (including a remainder interest), the trustee’s refusal to distribute for another beneficiary’s support warrants careful judicial review for self-serving conduct inconsistent with fiduciary obligation.

## Conclusion

In Pollock v. Phillips, the West Virginia Supreme Court of Appeals rejected the view that a trustee with “sole discretion” had complete freedom to withhold all distributions for an incompetent beneficiary’s support. Considering the trust’s support purpose and the trustee’s personal financial stake in nondistribution, the court held the trustee’s discretion was limited by fiduciary duty and the trust’s objectives, reversed the declaratory judgment for the trustee, and sent the case back for proceedings requiring reasonable support distributions.


Pollock v. Phillips, 411 S.E.2d 242, 186 W.Va. 99 (1991)