Do trust equalization provisions require statutory advancement formalities? Winward v. Goodliffe Explained

In Winward v. Goodliffe, the Utah Court of Appeals addressed whether trust provisions requiring equal distribution of assets among beneficiaries must comply with statutory advancement requirements when accounting for lifetime transfers.

Background and Facts

Richard and Myrtle Winward executed trust agreements providing that all assets would be divided equally among their surviving children—Kenneth Winward and Geraldine Goodliffe—upon the surviving spouse’s death. The trust agreements specified that assets received by children “by means other than the express conditions of this instrument, such as through life insurance beneficiary arrangements, joint tenancy survivorship, or express advancements” would be taken into account when making equal division. The trial court determined that Winward received $630,443 in lifetime transfers from his parents and ordered him to pay Goodliffe over $500,000 to equalize distributions.

Key Legal Issues

Winward argued that because the trust used the term “advancements,” any lifetime transfers must meet the strict statutory requirements for advancements under Utah Code Section 75-2-109, which requires written declarations and applies only in intestate situations. He also challenged the admission of evidence regarding the transfers on relevance, authentication, foundation, and hearsay grounds.

Court’s Analysis and Holding

The Court of Appeals affirmed, holding that the trust’s equal-distribution provision was broad enough to encompass any asset transfers from the trustors to their children, regardless of whether they satisfied technical advancement requirements. The court noted that the trust language used “such as” to introduce examples, indicating the list was merely illustrative rather than exhaustive. The trial court had clarified it was not using “advancements” as a technical term of art but rather applying the trust’s broad language requiring accounting for “any asset” received from the trustors. Regarding evidentiary challenges, the court found that Winward had only preserved relevance objections, and the challenged documents were clearly relevant to determining what transfers occurred.

Practice Implications

This decision emphasizes the importance of precise trust language and proper preservation of evidentiary objections. Trust drafters should carefully consider whether equalization provisions should be limited to specific types of transfers or should broadly encompass all lifetime gifts. For litigators, the case demonstrates that general relevance objections will not preserve more specific evidentiary challenges regarding authentication, foundation, or hearsay for appeal—each ground must be specifically stated at trial.