O'Riley v. U.S. Bank, N.A.

Donald O’Riley created a trust with U.S. Bank, N.A. (defendant) as the trustee. Per the trust’s terms, when Donald died, the trust estate was divided into a marital trust and a nonmarital trust. As to the nonmarital trust, the trust agreement stated that U.S. Bank had absolute discretion to periodically distribute as much net income from trust assets to Donald’s wife, Arlene O’Riley, as deemed advisable to provide for her care, support, maintenance, and welfare. If any net income remained after paying Arlene as the preferred beneficiary, then U.S. Bank had absolute discretion to distribute as much of the remaining income to Donald’s sons, Terrance and Gerald O’Riley (plaintiffs) as deemed advisable to provide for their respective care, support, maintenance, education, and welfare. Arlene made annual requests for income, submitting records of her income and expenses to U.S. Bank as support. The expenses were consistent with the lifestyle that Arlene and Donald lived prior to Donald’s death. U.S. Bank distributed the trust’s net income to Arlene in accordance with her requests but refused most of Terrance’s requests for income and distributed only minimal amounts. Terrance and Gerald sued, alleging that U.S. Bank abused its discretionary authority by making unreasonable distributions that failed to balance the beneficiaries’ respective needs. The trial court held in U.S. Bank’s favor. Terrance and Gerald appealed to the Missouri Court of Appeals.